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00:00 Speaker A
We got to start with the ho-hum action in stocks and you can see that was a very choppy chart that we had in the Dow. So, what am I saying here? Stocks shrug, but gold surges. So, let’s go back and take a look at a few more charts. In fact, just to highlight this again, I haven’t seen a Feb announcement day this choppy, this quiet in some time. That’s just the Dow. You can see it closed barely in the green up 12 percentage points.
00:30 Speaker A
There’s the Nasdaq, there’s the S&P 500. But let’s go to gold. and that was just on a tear. Even for gold standards, it was uh gold standard. It was up uh almost 6% and I went back and according to some measures and depends on how you slice and dice and put put together the futures contracts, but haven’t seen a move like this since March 19th of 2009. You know what was happening back then? Very beginning, just a few days into QE1.
01:00 Speaker A
And that just kind of tells you the strength of the move here. Let’s check out the year to date and you can see it’s up 25%. In fact, only a few days ago, it was uh it was up quite a bit lower. Let me just go to the 10 day because I think it’ll only cross the 5,000 mark. Yeah, that was last week somewhere in there. So it is just on a tear. and it’s not just gold, of course, it’s silver too. That’s is uh if it’s not a record high today, it’s very close.
01:30 Speaker A
But also in the upper left, PA equals F, that’s palladium. And if we go to the year-to-date totals on all of these, you can see silver up 65%, platinum up 26, and gold just behind, uh palladium up 25 as well. And the upper left though, that’s 99%, that’s natural gas. Natural gas prices for February delivery have more than doubled this year, but that’s kind of an outlier because of the weather.
01:54 Speaker B
So beyond the here and now my friend, you’re looking farther out to 2026. You’re wondering, what are some potential pain points I got to have on my radar? You would say what?
02:07 Speaker A
Yes, I was just asking that very same question to Steve Steve Sosnik. He’s the chief strategist at Interactive Brokers. And this is for an episode of Stocks and Translation, a podcast that comes out Tuesday morning. But here’s what he had to say about one of these headwinds this year.
02:30 Speaker C
It’s a mid-term election year. We’ve had two down years in the last 10. Care to guess when they were? You mentioned one of them, 2018, the other one was 2022. What do they have in common? Mid-term election years. We had obviously a big, you know, sort of bear market moves in 2020, obviously. And again, last year with with liberation day, but uh in terms of lasting down years, those were the two.
03:07 Speaker A
And he had a he had quite a list there. Not just midterm elections, also the market is pricing in a number of Fed rate cuts, probably going to get a disappointment on that front. Uh new Fed chair, a lot of times when we have a new Fed chair, they are tested early. in 2018, Fed chair Powell came in, right away he was tested with Volmageddon in February, look that one up and also a near bear market in December of that year when he mentioned autopilot with respect to uh what was that? quantitative tightening.
03:41 Speaker A
Also, a weaker dollar and we’re going to get into the dollar in a second. That can be inflationary. So, you know, kind of goes both ways there. But also we are in the fourth year of this bull market. That’s another one. AI spending concentration risk and then rates. Uh we might actually have longer-term rates shooting up and that would be a headwind for stocks as we’ve seen in the past as well.
03:59 Speaker B
You mentioned the dollar, let’s hit that.
04:01 Speaker A
All right. Uh dollar, is it a false breakdown? I’m going to show you the price action in the US dollar index, the so-called Dixie as it happened recently and just take me a minute here to get it up. Basically, basically what’s happened is we have broken a long-term trading range and uh we have shot right back up into the prior trading range. So, let me put a three-year chart so we can see what’s going on here. Here we go. So, we got this big trading range and then we were down here and then we kind of shot below that.
04:35 Speaker A
But let me show you the five-day view. We actually came up a little bit today. So, in the long term, I’m going to put a five-year chart here. We might be setting up for a potential false breakdown, which is something we’ve seen in the dollar a lot, but as you can see, the trend is down here. And so if we don’t get an immediate pop above 27, I’m thinking we’re probably going to see more some more dollar weakness.
05:01 Speaker A
The immediate uh consequence of that, it’s bullish for stocks, but longer term if inflation picks up, then that becomes bearish for stocks.
05:13 Speaker B
All right, thank you, buddy. Appreciate it.