BullMarketRun.com

1. Gold has traded between $1,301 and $1,310 so far today…as of 7:00 am Pacific, bullion is up $1 an ounce at $1,307…the Federal Reserve is expected to hold interest rates steady today, shave the number of hikes projected for the rest of the year, and release long-awaited details of a plan to end the monthly reduction of its massive balance sheet…how much of this dovishness is already “baked” into the market we’ll soon find out as markets react to the news later today and through the rest of the week…Silver is off slightly at $15.32…Copper is up a penny at $2.94…Nickel has jumped 7 cents to $5.98 while Zinc is a penny higher at $1.31…Crude Oil has retreated 19 cents a barrel to $58.84 while the U.S. Dollar Index is up slightly at 96.45…China will strive to achieve its economic development targets for 2019, state television said today, quoting the cabinet after a meeting chaired by Premier Li Keqiang…the government says it’ll speed up tax and fee cuts and push reforms to help shore up confidence and protect jobs…the European Union has fined Alphabet’s Google $1.7 billion (U.S.) for abusing the dominance of its search engine to block competitors in the niche market of selling text ads on the search results that appear on 3rd party websites…today’s decision is the last among 3 sets of formal charges that the European Commission, the bloc’s antitrust regulator, has so far filed against the tech giant, drawing to a close at least one part of a nearly decade-long investigation…

2. The biggest trading volume in Copper call options on record signals supply troubles brewing in the market…a spread trade worth $6.5 million was posted early Monday morning on Comex in New York in a bet that the price of the metal used in wires and pipes will surge past $3.05 in a few months…“It’s a pretty aggressive bullish bet,” stated Tai Wong, head of base and precious metals derivatives trading at BMO Capital Markets…the wager was likely fueled by “expectations that supply will become tight”…Copper production will trail consumption by 116,000 metric tons this year, a 2nd straight deficit, Citigroup analysts wrote in a report in December, while Antofagasta CEO Iván Arriagada said yesterday that the Copper deficit could run as high as 300,000 metric tons this year…investors looking ahead several months should do well on high quality juniors with strong Copper exposure, and Northwest B.C. would be a great first place to look…

3. Oil prices are likely to turn higher on news just out that U.S. stockpiles of Crude refined fuels plunged last week…Crude inventories fell by 9.6 million barrels in the last week, the Energy Administration confirmed this morning in its weekly update, vs. analysts’ expectations for an increase of 309,000 barrels…the draw was the largest since July 2018…gasoline stocks, meanwhile, fell by 4.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.4 million barrel drop…distillate stockpiles also fell much more than expected…Crude futures, hitting new 4-month highs, have drawn support this week from ongoing supply cuts led by producer club OPEC and U.S. sanctions against Iran and Venezuela…Crude prices have risen by almost a third this year but are still not at levels that would be considered inflationary for the global economy…

4. Investors now put a 75% probability on the likelihood the Fed won’t raise its overnight benchmark interest rate, or federal funds rate, any more this year, according to CME Group’s FedWatch tool…the fed funds rate is currently set in a range of 2.25% to 2.50%…new quarterly economic and rate projections to be released with the latest Fed policy statement at 11:00 am Pacific will show how closely policymakers align with that view…the Fed’s December projection called for 2 hikes this year, but that is widely expected to be cut to a single increase at the conclusion of the 2-day policy meeting later this morning…it would take a downward move by 7 policymakers to bring the median expected number of hikes to zero for the year, a full half-percentage point change that has happened only once since the Fed began making its “dot plot” of projections public in 2012…the more intense focus among investors may be on the balance sheet, and the Fed’s plans to stop reducing its holdings of Treasury bonds and mortgage-backed securities each month by as much as $50 billion…details of that plan are also expected to be released today, providing investors with a sense of how much longer the drawdown will continue, and what will likely be left in the Fed’s portfolio of assets when it stops…

5. Yesterday’s Canadian federal budget was yet another disappointment – many billions of dollars in new spending targeted at the Liberals’ favorite groups, in an attempt to win votes, but not even the promise of a comprehensive review of Canada’s aging tax code or other measures to boost the country’s competitiveness…nothing of course for the resource sector…not that Trudeau’s assurances mean anything – a pipeline was supposed to be built and of course there was that promise of a balanced budget by 2019, but now we have a pipeline fiasco and a $20 billion budget hole with no end in sight to deficit spending that’s doing nothing to improve the economy…annualized growth of 0.4% in Q4 vs. 2.6% in the United States…the numbers don’t lie…day by day, month by month, Canada’s competitiveness vs. the United States and other countries continues to wane, yet many Canadians seem perfectly content with that…liberals assume that bigger government means better government and a stronger economy when the opposite is actually true…since 2015, real GDP growth in Canada has averaged 1.9%, less than in the previous 4 years (during balanced budgets)…slower growth during the Trudeau years, like the Obama era in the U.S., has occurred despite much larger doses of both monetary and fiscal stimulus…on top of the federal government’s large and sustained budget deficits, the Bank of Canada lowered interest rates and presided over a devaluation of the loonie…one lasting effect of Canada’s increasing dollops of stimulus was a surge in housing prices in Vancouver and Toronto, which required a tightening of mortgage regulations to curb possible housing market bubbles…

6. The Dow has slid 122 points after the first 30 minutes of trading…FedEx (FDX, NYSE) shares fell more than 5% after the company warned that “slowing international macroeconomic conditions and weaker global trade growth trends continue, as see in the year-over-year decline in our FedEx Express international revenue”…in Toronto, the TSX has lost 54 points while the Venture is unchanged at 636 after hitting a new 2019 high yesterday of 638…the Index is working through a band of resistance between the 620’s and the mid-660’s…once that is cleared, a major acceleration to the upside is likely…astute investors are positioning now for a very buoyant summer which will likely start early…the Venture’s 100-day moving average (SMA), in decline for a year, has flattened out at 600 and is preparing to reverse higher early in Q2, a sure sign that this market is going to heat up in a major way…

7. 48North Cannabis (NRTH, TSX-V), which is bouncing back strongly as predicted after dipping as low as $1.19 late last week, has been added to the Horizons Marijuana Life Sciences ETF…“The addition of 48North to the HMMJ signals market validation of the company’s strong position in the Canadian cannabis industry,” stated 48North co-CEO Alison Gordon.  “48North’s inclusion, along with a select group of its peers, is a proof-point that the company is being watched closely by the investment community.  Investors are taking note of the disruptive potential that, pending Health Canada’s approval, 48North’s significant outdoor cultivation will have on the industry as a whole”…in addition to the HMMJ, 48North is also listed on the Horizons Emerging Marijuana Growers Index ETF (HMJR, TSX), a select group of primarily North American publicly-listed companies involved in the cultivation, production and/or distribution of marijuana…HMMJ is an index (or passively managed) ETF, which seeks to replicate, to the extent possible, the performance of the North American Marijuana Index, net of expenses…this index is designed to provide exposure to the performance of a basket of North American publicly listed life sciences companies with significant business activities in the marijuana industry…the North American Marijuana Index selects from a current universe of companies that have operations that may include one or more of biopharmaceuticals, medical manufacturing, distribution, bio-products and other ancillary businesses related to the marijuana industry…

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