Article Category: Gold

Matt’s Market Insights

This year is starting off just as last year did, with a flight to safety, a spike in volatility, and a whole lot of red across the board. Yesterday's 330 point decline in the Industrials came as oil saw renewed selling pressure and WTIC crossed below the $50 mark for the first time since early 2009. Oil remains the dominant theme, so we might as well start there.

Bulls and bears had been fighting it out at the $55 level until early last week when we saw that support line violated. As suggested in prior remarks, this was an ominous sign and combined with a bearish looking term structure in oil, made it appear likely further declines were on the horizon. Yesterday we saw oil decline nearly 5%, renewing worries about global growth, profits and employment in the energy sector, possible defaults on energy related bonds, and instability among oil producing nations.


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Posted in: Dividends Federal Reserve Gold Interest Rates Volatility

Matt’s Market Insights

Trading is quiet today with most major averages looking to close out the year near historical highs. We saw this same behavior last year as equities rallied to close off 2013, only to suffer nearly a 6% correction during the following January. We can see this play out in the chart of the S&P 500 below. The gray vertical line marks the turn of the last new year, and what appears to be a capitulation point for equities.


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Posted in: Corrections Dividends Economy Gold Inflation Oil

Matt’s Market Insights

2014 has been another year for the bulls. As you can probably guess, equities have provided the best total return at 15.3%. Bonds also had a solid year in the face of geopolitical turmoil and anticipation of Fed rate hikes. Total returns (include price gains and interest payments) stand at 4.6% for US Treasuries and 7.0% for corporate bonds. Gold staged a rally early in 2014 but has continued to trend lower; as of today it is down about 2% for the year.


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Posted in: Dividends Federal Reserve Gold Inflation Interest Rates

Matt’s Market Insights

GDP growth reaching 5% in Q3 raises lots of questions. Are things finally getting better? Is the economy reaching breakout speed? Is Fed tightening now on our doorstep? Is this the beginning of a sustained upward trend or the apex of our economy before we get dragged down by global conditions?

The chart below shows quarterly GDP growth since the financial crisis. After struggling near 2% annualized growth for many years, the last five quarters make it appear that the economy has shifted gears. This in the face of a sputtering global landscape. It's also rather remarkable that we are seeing growth without inflation ... truly a Goldilocks environment, but how long will it last?


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Posted in: Bonds Dollar Federal Reserve Gold Inflation Interest Rates

Matt’s Market Insights

The market's focus has momentarily shifted back to the Fed and the future path of short-term interest rates. The Fed will end their two-day meeting today and release a statement later this afternoon. In the meantime, we can speculate on their actions and the market's response by looking at some of the data released today.

The first thing to note is that the Consumer Price Index (CPI) fell by the largest amount since December of 2008. The headline figure declined by a seasonally adjusted 0.3%, while the "core" rate (excluding food and energy) rose by 0.1%. Over the last twelve months consumer prices have risen by an unadjusted 1.3%


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Posted in: Federal Reserve Gold Interest Rates Momentum Psychology Volatility

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