“It’s tremendously bullish to see gold break out of this pattern, which has been really keeping gold range bound for the last four and a half, five months.” – 01:13
Mark Newton, Managing Director of Fundstrat Global Advisors, joins Remy Blaire at the New York Stock Exchange to discuss to discuss the current state of the U.S. stock market and the broader economic landscape. As they dive into midweek trading, they observe mixed results among major U.S. stock averages, influenced by ongoing trade uncertainties and global bond movements.
Remy highlights the significant surge in gold prices, which have reached new all-time highs, while silver also shows impressive gains. Mark explains that this bullish trend is largely driven by expectations of interest rate cuts from the Federal Reserve, alongside concerns about the fiscal situation both domestically and globally. He notes that gold has broken out of a range-bound pattern that has persisted for several months, projecting that gold could hit $3,800 and silver could reach the mid-40s.
The discussion shifts to year-to-date performance, with gold up approximately 30% and silver nearing 40%. Mark emphasizes the importance of real interest rates and the lack of significant inflation as key factors influencing these precious metals. He also discusses the industrial demand for silver, particularly from China, which imports more silver ore than any other country.
As they analyze the technology sector, Remy and Mark observe a divergence in performance, with Apple showing impressive gains while other tech stocks, like Salesforce, have struggled. Mark points out that this trend is noteworthy and suggests that investors should remain vigilant. Despite some concerns about a potential market correction, he expresses optimism about the overall market trajectory, especially as they approach a historically challenging month for Wall Street in October.
The conversation also touches on the bond market, where recent price action has been influenced by comments from the European Central Bank and historical trends in September. Mark believes that U.S. Treasury yields are likely to continue falling, which could signal a weakening economy in the coming weeks. He discusses the implications of global central bank policies and the potential downward pressure on the U.S. dollar and Treasury yields.
In the closing moments of the segment, Remy and Mark reflect on the importance of understanding interest rate differentials and their impact on the dollar. Mark concludes with a cautious yet optimistic outlook, suggesting that while there may be challenges ahead, the current trends remain intact, and there are opportunities for investors.