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GraniteShares

Research

The current economic tumult recatalyzes the classic, three-fold case for gold, namely asset stability, diversification and vulnerability of the dollar in the new Fed paradigm. This investment case explores the critical dynamics that have propelled gold to new record highs above $2,000/oz, and how the asset's unique status combining characteristics of a commodity and a currency lend gold unique value as the global economy attempts a reset from the COVID-19 tumult.

Topic: Gold

Publication Type: Investment Cases

Investment Case for Gold as The Yellow Metal Charts New Record Highs

September 03, 2020 | Ryan Giannotto, CFA, Director of Research
The current economic tumult recatalyzes the classic, three-fold case for gold, namely asset stability, diversification and vulnerability of the dollar in the new Fed paradigm. This investment case explores the critical dynamics that have propelled gold to new record highs above $2,000/oz, and how the asset's unique status combining characteristics of a commodity and a currency lend gold unique value as the global economy attempts a reset from the COVID-19 tumult.

A somewhat choppy week for U.S. stock markets with the S&P 500 Index striving for but not reaching record highs on Wednesday. Despite stronger-than-expected U.S. economic reports (including lower-than-expected weekly jobless claims, strong retail sales and industrial production reports) and a falling number of new Covid-19 cases and deaths, U.S. stock markets struggled to move higher last week.  Concerns surrounding the legality of President Trump’s  executive orders combined with still-stalled congressional coronavirus-related stimulus negotiations and, perhaps, higher-than-expected PPI, CPI and wage inflation numbers may have limited stock market gains.  The 10-year U.S. Treasury rate moved higher all through the week, reacting to corporate and government supply pressures, higher-than-expected inflation numbers and strong U.S. economic reports. At week’s end the S&P 500 Index increased 0.6% to 3,372.85, the Nasdaq Composite index increased 0.1% to 11,019.30, the 10-year U.S. interest rate increased 14 bps to 71 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.4%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending August 14 , 2020)

August 17, 2020 | Jeff Klearman
A somewhat choppy week for U.S. stock markets with the S&P 500 Index striving for but not reaching record highs on Wednesday. Despite stronger-than-expected U.S. economic reports (including lower-than-expected weekly jobless claims, strong retail sales and industrial production reports) and a falling number of new Covid-19 cases and deaths, U.S. stock markets struggled to move higher last week.  Concerns surrounding the legality of President Trump’s  executive orders combined with still-stalled congressional coronavirus-related stimulus negotiations and, perhaps, higher-than-expected PPI, CPI and wage inflation numbers may have limited stock market gains.  The 10-year U.S. Treasury rate moved higher all through the week, reacting to corporate and government supply pressures, higher-than-expected inflation numbers and strong U.S. economic reports. At week’s end the S&P 500 Index increased 0.6% to 3,372.85, the Nasdaq Composite index increased 0.1% to 11,019.30, the 10-year U.S. interest rate increased 14 bps to 71 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.4%.

Against a backdrop of better-than-expected economic reports and earning results and indications new Covid-19 cases may be falling, U.S. stock markets all moved higher again last week despite concerns over increased U.S.-China frictions and stalled congressional progess on additional coronavirus relief funds. Better-than-expected factory orders and ISM manufacturing and non-manufacturing index numbers combined with lower-than-expected weekly jobless claims and a stronger-than-expected payroll report helped move U.S. equity markets higher. Earning results reported last week were predominantly positive also helping move equity markets higher. Early-in-the-week optimism that congress would reach agreement on additional coronavirus-related relief funds faded as the week ended with no progress, but was slightly ameliorated with the Trump administration announcing the President may take executive action to extend existing programs. Both the U.S. dollar and the 10-year U.S. Treasury rate moved off their lows reached earlier in the week on stronger-than-expected economic reports and signs the number of new Covid-19 cases may be decreasing. At week’s end the S&P 500 Index and Nasdaq Composite index each increased 2.5% to 3,351.28 and 11,010.98, respectively. the 10-year U.S. interest rate increased 4 bps to 57 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) was unchanged.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending August 7 , 2020)

August 10, 2020 | Jeff Klearman
Against a backdrop of better-than-expected economic reports and earning results and indications new Covid-19 cases may be falling, U.S. stock markets all moved higher again last week despite concerns over increased U.S.-China frictions and stalled congressional progess on additional coronavirus relief funds. Better-than-expected factory orders and ISM manufacturing and non-manufacturing index numbers combined with lower-than-expected weekly jobless claims and a stronger-than-expected payroll report helped move U.S. equity markets higher. Earning results reported last week were predominantly positive also helping move equity markets higher. Early-in-the-week optimism that congress would reach agreement on additional coronavirus-related relief funds faded as the week ended with no progress, but was slightly ameliorated with the Trump administration announcing the President may take executive action to extend existing programs. Both the U.S. dollar and the 10-year U.S. Treasury rate moved off their lows reached earlier in the week on stronger-than-expected economic reports and signs the number of new Covid-19 cases may be decreasing. At week’s end the S&P 500 Index and Nasdaq Composite index each increased 2.5% to 3,351.28 and 11,010.98, respectively. the 10-year U.S. interest rate increased 4 bps to 57 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) was unchanged.

All three major U.S. stock indexes ended higher (moving in a zig-zag fashion), the U.S. dollar continued to weaken and the 10-year U.S Treasury rate fell last week as investors digested earnings and economic reports, FOMC statements, growing Covid-19 cases and congressional stimulus bill progress.   Earnings reports, though generally mixed, provided strong support for U.S. stock markets with four major technology companies reporting better-than-expected results after the market on Thursday.  Apple results were particularly strong, pushing the share price of Apple over 10% higher on Friday and raising its market capitalization to over $1.8 trillion. Comments by Fed Chairman Jerome Powell following the end of a 2-day FOMC meeting on Wednesday reaffirmed the Fed’s commitment to maintain aggressive monetary policy to support maximum employment and price stability.  Chairman Powell also said the U.S. economy faces a long road to recovery, that the virus will determine the path of that recovery and emphasized the importance of fiscal policy to support the economy.   Economic reports last week were also mixed with pending home sales, consumer spending and durable goods orders reports all better-than-expected while weekly jobless claims were slightly higher than expected.  The first estimate of 2nd  quarter GDP, released Thursday, posted its all-time greatest quarterly contraction of 32.7%, though this was slightly better than expectations.  Markets also focused on Friday’s expiration of supplemental unemployment benefits and congressional negotiations to extend them and implement a phase 4 coronavirus stimulus package.  At week’s end the S&P 500 Index increased 1.7% to 3,271.12, the Nasdaq Composite Index rose 3.7% to 10,745.27, the 10-year U.S. interest rate fell 6 bps to 53bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened another 1.2%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending July 31, 2020)

August 03, 2020 | Jeff Klearman
All three major U.S. stock indexes ended higher (moving in a zig-zag fashion), the U.S. dollar continued to weaken and the 10-year U.S Treasury rate fell last week as investors digested earnings and economic reports, FOMC statements, growing Covid-19 cases and congressional stimulus bill progress.   Earnings reports, though generally mixed, provided strong support for U.S. stock markets with four major technology companies reporting better-than-expected results after the market on Thursday.  Apple results were particularly strong, pushing the share price of Apple over 10% higher on Friday and raising its market capitalization to over $1.8 trillion. Comments by Fed Chairman Jerome Powell following the end of a 2-day FOMC meeting on Wednesday reaffirmed the Fed’s commitment to maintain aggressive monetary policy to support maximum employment and price stability.  Chairman Powell also said the U.S. economy faces a long road to recovery, that the virus will determine the path of that recovery and emphasized the importance of fiscal policy to support the economy.   Economic reports last week were also mixed with pending home sales, consumer spending and durable goods orders reports all better-than-expected while weekly jobless claims were slightly higher than expected.  The first estimate of 2nd  quarter GDP, released Thursday, posted its all-time greatest quarterly contraction of 32.7%, though this was slightly better than expectations.  Markets also focused on Friday’s expiration of supplemental unemployment benefits and congressional negotiations to extend them and implement a phase 4 coronavirus stimulus package.  At week’s end the S&P 500 Index increased 1.7% to 3,271.12, the Nasdaq Composite Index rose 3.7% to 10,745.27, the 10-year U.S. interest rate fell 6 bps to 53bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened another 1.2%.

Riding on the previous week’s momentum, U.S. stock markets moved higher on Monday with the Nasdaq Composite Index reaching another record high. Increased investor optimism spurred by the EU’s passage of an $860 billion coronavirus recovery fund, increased hopes of a phase 4 U.S. coronavirus stimulus package and positive developments regarding a Covid-19 vaccine helped move the S&P 500 Index higher through Wednesday. Despite a strong Microsoft earnings report after the close on Wednesday, both the S&P 500 and the Nasdaq Composite Index moved lower on Thursday with the Nasdaq Composite Index falling over 2%. A larger-than-hoped-for jobless claims number, new U.S-China frictions resulting in the closing of the China consulate in Houston, rising Covid-19 cases and the rotation out of tech into cyclical stocks all contributed to Thursday’s as well as Friday’s U.S. stock market declines. The U.S. dollar (as measured by the U.S. Dollar Index – DXY) weakened significantly over the week, pressured lower by increased concerns over the growing number of U.S. Covid-19 cases, uncertainty regarding a phase 4 coronavirus stimulus package and expectations EU GDP growth will significantly outpace U.S. GDP growth over the next year. At week’s end the S&P 500 Index decreased 0.3% to 3,215.63, the Nasdaq Composite Index fell 1.3% to 10,363.18, the 10-year U.S. interest rate fell 4 bps to 59bps and the U.S. dollar (as measured by the U.S. Dollar index - DXY) weakened 1.7%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending July 24, 2020)

July 27, 2020 | Jeff Klearman
Riding on the previous week’s momentum, U.S. stock markets moved higher on Monday with the Nasdaq Composite Index reaching another record high. Increased investor optimism spurred by the EU’s passage of an $860 billion coronavirus recovery fund, increased hopes of a phase 4 U.S. coronavirus stimulus package and positive developments regarding a Covid-19 vaccine helped move the S&P 500 Index higher through Wednesday. Despite a strong Microsoft earnings report after the close on Wednesday, both the S&P 500 and the Nasdaq Composite Index moved lower on Thursday with the Nasdaq Composite Index falling over 2%. A larger-than-hoped-for jobless claims number, new U.S-China frictions resulting in the closing of the China consulate in Houston, rising Covid-19 cases and the rotation out of tech into cyclical stocks all contributed to Thursday’s as well as Friday’s U.S. stock market declines. The U.S. dollar (as measured by the U.S. Dollar Index – DXY) weakened significantly over the week, pressured lower by increased concerns over the growing number of U.S. Covid-19 cases, uncertainty regarding a phase 4 coronavirus stimulus package and expectations EU GDP growth will significantly outpace U.S. GDP growth over the next year. At week’s end the S&P 500 Index decreased 0.3% to 3,215.63, the Nasdaq Composite Index fell 1.3% to 10,363.18, the 10-year U.S. interest rate fell 4 bps to 59bps and the U.S. dollar (as measured by the U.S. Dollar index - DXY) weakened 1.7%.

Though base metal price changes were mixed last week, all base metal prices fell between 3% and 4% Friday as the U.S. dollar strengthened and amid increasing concerns of the effect of rising interest rates.    Copper prices, up almost 5% through Thursday (and at 10-year highs) on expectations of post-pandemic economic growth and on concerns of supply shortages, fell 4% on Friday.  Nickel prices, up just under a percent through Wednesday, ended the week down over 5%, possibly also affected by Elon Musk’s Thursday’s tweet saying Tesla would be switching some cars to iron-based batteries away from nickel-based.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (February 26, 2021)

March 01, 2021 | Jeff Klearman
Though base metal price changes were mixed last week, all base metal prices fell between 3% and 4% Friday as the U.S. dollar strengthened and amid increasing concerns of the effect of rising interest rates.    Copper prices, up almost 5% through Thursday (and at 10-year highs) on expectations of post-pandemic economic growth and on concerns of supply shortages, fell 4% on Friday.  Nickel prices, up just under a percent through Wednesday, ended the week down over 5%, possibly also affected by Elon Musk’s Thursday’s tweet saying Tesla would be switching some cars to iron-based batteries away from nickel-based.

Oil prices moved higher again last week with WTI and Brent crude oil prices reaching levels not seen in over a year.   Brent crude oil prices broke $60/barrel last week while WTI crude oil prices closed the week just below at $59/barrel (both May futures prices).  Oil prices continue to be supported by continued larger-than-expected drawdowns in U.S and OECD inventory levels, strong Chinese demand,  OPEC+ production restraint and increased expectations of passage of the $1.9 trillion U.S. stimulus package.   Both WTI and Brent crude oil futures contracts continue to trade in backwardation indicating investor concern regarding possible supply shortages relative to prospective demand.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (February 12, 2021)

February 16, 2021 | Jeff Klearman
Oil prices moved higher again last week with WTI and Brent crude oil prices reaching levels not seen in over a year.   Brent crude oil prices broke $60/barrel last week while WTI crude oil prices closed the week just below at $59/barrel (both May futures prices).  Oil prices continue to be supported by continued larger-than-expected drawdowns in U.S and OECD inventory levels, strong Chinese demand,  OPEC+ production restraint and increased expectations of passage of the $1.9 trillion U.S. stimulus package.   Both WTI and Brent crude oil futures contracts continue to trade in backwardation indicating investor concern regarding possible supply shortages relative to prospective demand.

Oil prices moved sharply higher last week supported by continued drawdowns in inventory levels, OPEC+ production restraint and increased expectations of passage of the $1.9 trillion U.S. stimulus package.   Both WTI and Brent crude oil futures contracts are trading in backwardation indicating investor concern regarding possible supply shortages relative to prospective demand.  Oil prices last week rose to levels not seen in more than a year.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (February 5, 2021)

February 08, 2021 | Jeff Klearman
Oil prices moved sharply higher last week supported by continued drawdowns in inventory levels, OPEC+ production restraint and increased expectations of passage of the $1.9 trillion U.S. stimulus package.   Both WTI and Brent crude oil futures contracts are trading in backwardation indicating investor concern regarding possible supply shortages relative to prospective demand.  Oil prices last week rose to levels not seen in more than a year.

Grain prices moved sharply higher last week, reversing most of the previous week’s losses.   Historically large corn sales to China l (as well as to  Japan) were the primary reason for the increase in corn prices last week.  Soybean prices also continue to be supported by stronger-than-expected exports to China as well as by concerns rain in Brazil will hamper soybean harvests.  Wheat prices moved higher over Russian export restrictions and on concerns Argentina may restrict exports as well.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (January 29, 2021)

February 01, 2021 | Jeff Klearman
Grain prices moved sharply higher last week, reversing most of the previous week’s losses.   Historically large corn sales to China l (as well as to  Japan) were the primary reason for the increase in corn prices last week.  Soybean prices also continue to be supported by stronger-than-expected exports to China as well as by concerns rain in Brazil will hamper soybean harvests.  Wheat prices moved higher over Russian export restrictions and on concerns Argentina may restrict exports as well.

Grain prices moved significantly lower last week, reversing most of the gains recorded the previous week.    Favorable rainfall in South America was primarily the trigger for the steep selloff in corn and soybean prices, with increased corn and soybean plantings in South America adding to supply expectations and helping to offset low global stock levels and forecasted harvest yields.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (January 22, 2021)

January 25, 2021 | Jeff Klearman
Grain prices moved significantly lower last week, reversing most of the gains recorded the previous week.    Favorable rainfall in South America was primarily the trigger for the steep selloff in corn and soybean prices, with increased corn and soybean plantings in South America adding to supply expectations and helping to offset low global stock levels and forecasted harvest yields.

The unfortunate reality is that a deep chasm stands between investor income requirements and what conventional strategies can now yield. Alternative Income may help bridge the divide.

Topic: Income

Publication Type: Investment Cases

The Income Blueprint: Potential Strategy for Income Replacement with HIPS

October 13, 2020 | Ryan Giannotto, CFA, Director of Research
The unfortunate reality is that a deep chasm stands between investor income requirements and what conventional strategies can now yield. Alternative Income may help bridge the divide.

Mental accounting is a truly defining feature of the human condition. Find out how much of your income is mental, and how it may prevent you from acheiving your true income goals.

Topic: Alternative Income

Publication Type: Investment Cases

How Much of Your Income is Mental? Overcoming Human Fallacies in Investing

March 27, 2020 | Ryan Giannotto, CFA, Director of Research
Mental accounting is a truly defining feature of the human condition. Find out how much of your income is mental, and how it may prevent you from acheiving your true income goals.

If you thought achieving income yields was difficult, life will only get harder—the Fed that giveth can taketh away. Just as investors were getting accustomed to the taste of at least modestly non-zero rates, expectations have shifted swiftly.

Topic: Alternative Income

Publication Type: Investment Cases

Help! What Happened to My Income?

March 27, 2020 | Ryan Giannotto, CFA, Director of Research
If you thought achieving income yields was difficult, life will only get harder—the Fed that giveth can taketh away. Just as investors were getting accustomed to the taste of at least modestly non-zero rates, expectations have shifted swiftly.

While generating sustainable yield for income investing has never been an easy task, the latest shockwaves to reverberate through interest rate markets have only compounded this challenge. The core of this problem for investors, whether retirees, long-term savers, or anyone looking to diversify their returns, is they are probably looking for yield in all the wrong places.

Topic: Income

Publication Type: Investment Cases

Looking for Yield in All the Wrong Places: 7% Income and How to Get it in Today’s Market

March 27, 2020 | Ryan Giannotto, CFA, Director of Research
While generating sustainable yield for income investing has never been an easy task, the latest shockwaves to reverberate through interest rate markets have only compounded this challenge. The core of this problem for investors, whether retirees, long-term savers, or anyone looking to diversify their returns, is they are probably looking for yield in all the wrong places.

GraniteShares, a disruptive exchange-traded fund (ETF) company, debuted a revised methodology for the index underlying the GraniteShares HIPS US High Income ETF (NYSE Arca: HIPS), a high alternative income-focused fund that invests in a diversified basket of pass-through securities.

Topic: Income

Publication Type: Viewpoints

GraniteShares Revises Index Methodology for HIPS US High Income ETF (HIPS)

March 27, 2020 | GraniteShares
GraniteShares, a disruptive exchange-traded fund (ETF) company, debuted a revised methodology for the index underlying the GraniteShares HIPS US High Income ETF (NYSE Arca: HIPS), a high alternative income-focused fund that invests in a diversified basket of pass-through securities.

When no company or industry is immune from disruptive challenge, perhaps never has the number of potential losers been so plentiful, nor the disparity between winners and losers been so vast. Rather than succumb to conventional wisdom, perhaps the only thing more important than what you put IN your portfolio is what you XOUT.

Topic: XOUT

Publication Type: Investment Cases

How Many Losers Are in the S&P 500?

August 17, 2020 | Ryan Giannotto, CFA, Director of Research
When no company or industry is immune from disruptive challenge, perhaps never has the number of potential losers been so plentiful, nor the disparity between winners and losers been so vast. Rather than succumb to conventional wisdom, perhaps the only thing more important than what you put IN your portfolio is what you XOUT.

XOUT’s methodology counters traditional investment strategies. Rather than trying to pick a select few winners, XOUT flips the investment paradigm by seeking to avoid losers that are failing to adapt amid today’s environment of unprecedented technological change.

Topic: Precious Metals , XOUT

Publication Type: Viewpoints

GraniteShares Launches XOUT U.S. Large Cap ETF (XOUT)

March 27, 2020 | GraniteShares
XOUT’s methodology counters traditional investment strategies. Rather than trying to pick a select few winners, XOUT flips the investment paradigm by seeking to avoid losers that are failing to adapt amid today’s environment of unprecedented technological change.

GraniteShares is an independent, fully funded ETF company headquartered in New York City. GraniteShares’ ETF suite includes one of the lowest-cost physical gold ETFs (BAR), a broad-based commodity ETF (COMB), an ETF that seeks to exclude U.S. large cap companies most likely to suffer from technological disruption over the long term (XOUT), a high alternative income-focused fund that invests in pass-through securities (HIPS) and the lowest-cost* physical platinum ETF (PLTM). GraniteShares has experienced robust growth in 2019, recently surpassing $700 million in total assets under management.

Topic: Precious Metals , Commodity Baskets , Income , XOUT

Publication Type: Investment Cases

GraniteShares Announces Change in ETF Lineup

March 27, 2020 | GraniteShares
GraniteShares is an independent, fully funded ETF company headquartered in New York City. GraniteShares’ ETF suite includes one of the lowest-cost physical gold ETFs (BAR), a broad-based commodity ETF (COMB), an ETF that seeks to exclude U.S. large cap companies most likely to suffer from technological disruption over the long term (XOUT), a high alternative income-focused fund that invests in pass-through securities (HIPS) and the lowest-cost* physical platinum ETF (PLTM). GraniteShares has experienced robust growth in 2019, recently surpassing $700 million in total assets under management.

The current economic tumult recatalyzes the classic, three-fold case for gold, namely asset stability, diversification and vulnerability of the dollar in the new Fed paradigm. This investment case explores the critical dynamics that have propelled gold to new record highs above $2,000/oz, and how the asset's unique status combining characteristics of a commodity and a currency lend gold unique value as the global economy attempts a reset from the COVID-19 tumult.

Topic: Gold

Publication Type: Investment Cases

Investment Case for Gold as The Yellow Metal Charts New Record Highs

September 03, 2020 | Ryan Giannotto, CFA, Director of Research
The current economic tumult recatalyzes the classic, three-fold case for gold, namely asset stability, diversification and vulnerability of the dollar in the new Fed paradigm. This investment case explores the critical dynamics that have propelled gold to new record highs above $2,000/oz, and how the asset's unique status combining characteristics of a commodity and a currency lend gold unique value as the global economy attempts a reset from the COVID-19 tumult.
A somewhat choppy week for U.S. stock markets with the S&P 500 Index striving for but not reaching record highs on Wednesday. Despite stronger-than-expected U.S. economic reports (including lower-than-expected weekly jobless claims, strong retail sales and industrial production reports) and a falling number of new Covid-19 cases and deaths, U.S. stock markets struggled to move higher last week.  Concerns surrounding the legality of President Trump’s  executive orders combined with still-stalled congressional coronavirus-related stimulus negotiations and, perhaps, higher-than-expected PPI, CPI and wage inflation numbers may have limited stock market gains.  The 10-year U.S. Treasury rate moved higher all through the week, reacting to corporate and government supply pressures, higher-than-expected inflation numbers and strong U.S. economic reports. At week’s end the S&P 500 Index increased 0.6% to 3,372.85, the Nasdaq Composite index increased 0.1% to 11,019.30, the 10-year U.S. interest rate increased 14 bps to 71 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.4%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending August 14 , 2020)

August 17, 2020 | Jeff Klearman
A somewhat choppy week for U.S. stock markets with the S&P 500 Index striving for but not reaching record highs on Wednesday. Despite stronger-than-expected U.S. economic reports (including lower-than-expected weekly jobless claims, strong retail sales and industrial production reports) and a falling number of new Covid-19 cases and deaths, U.S. stock markets struggled to move higher last week.  Concerns surrounding the legality of President Trump’s  executive orders combined with still-stalled congressional coronavirus-related stimulus negotiations and, perhaps, higher-than-expected PPI, CPI and wage inflation numbers may have limited stock market gains.  The 10-year U.S. Treasury rate moved higher all through the week, reacting to corporate and government supply pressures, higher-than-expected inflation numbers and strong U.S. economic reports. At week’s end the S&P 500 Index increased 0.6% to 3,372.85, the Nasdaq Composite index increased 0.1% to 11,019.30, the 10-year U.S. interest rate increased 14 bps to 71 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.4%.
Against a backdrop of better-than-expected economic reports and earning results and indications new Covid-19 cases may be falling, U.S. stock markets all moved higher again last week despite concerns over increased U.S.-China frictions and stalled congressional progess on additional coronavirus relief funds. Better-than-expected factory orders and ISM manufacturing and non-manufacturing index numbers combined with lower-than-expected weekly jobless claims and a stronger-than-expected payroll report helped move U.S. equity markets higher. Earning results reported last week were predominantly positive also helping move equity markets higher. Early-in-the-week optimism that congress would reach agreement on additional coronavirus-related relief funds faded as the week ended with no progress, but was slightly ameliorated with the Trump administration announcing the President may take executive action to extend existing programs. Both the U.S. dollar and the 10-year U.S. Treasury rate moved off their lows reached earlier in the week on stronger-than-expected economic reports and signs the number of new Covid-19 cases may be decreasing. At week’s end the S&P 500 Index and Nasdaq Composite index each increased 2.5% to 3,351.28 and 11,010.98, respectively. the 10-year U.S. interest rate increased 4 bps to 57 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) was unchanged.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending August 7 , 2020)

August 10, 2020 | Jeff Klearman
Against a backdrop of better-than-expected economic reports and earning results and indications new Covid-19 cases may be falling, U.S. stock markets all moved higher again last week despite concerns over increased U.S.-China frictions and stalled congressional progess on additional coronavirus relief funds. Better-than-expected factory orders and ISM manufacturing and non-manufacturing index numbers combined with lower-than-expected weekly jobless claims and a stronger-than-expected payroll report helped move U.S. equity markets higher. Earning results reported last week were predominantly positive also helping move equity markets higher. Early-in-the-week optimism that congress would reach agreement on additional coronavirus-related relief funds faded as the week ended with no progress, but was slightly ameliorated with the Trump administration announcing the President may take executive action to extend existing programs. Both the U.S. dollar and the 10-year U.S. Treasury rate moved off their lows reached earlier in the week on stronger-than-expected economic reports and signs the number of new Covid-19 cases may be decreasing. At week’s end the S&P 500 Index and Nasdaq Composite index each increased 2.5% to 3,351.28 and 11,010.98, respectively. the 10-year U.S. interest rate increased 4 bps to 57 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) was unchanged.
All three major U.S. stock indexes ended higher (moving in a zig-zag fashion), the U.S. dollar continued to weaken and the 10-year U.S Treasury rate fell last week as investors digested earnings and economic reports, FOMC statements, growing Covid-19 cases and congressional stimulus bill progress.   Earnings reports, though generally mixed, provided strong support for U.S. stock markets with four major technology companies reporting better-than-expected results after the market on Thursday.  Apple results were particularly strong, pushing the share price of Apple over 10% higher on Friday and raising its market capitalization to over $1.8 trillion. Comments by Fed Chairman Jerome Powell following the end of a 2-day FOMC meeting on Wednesday reaffirmed the Fed’s commitment to maintain aggressive monetary policy to support maximum employment and price stability.  Chairman Powell also said the U.S. economy faces a long road to recovery, that the virus will determine the path of that recovery and emphasized the importance of fiscal policy to support the economy.   Economic reports last week were also mixed with pending home sales, consumer spending and durable goods orders reports all better-than-expected while weekly jobless claims were slightly higher than expected.  The first estimate of 2nd  quarter GDP, released Thursday, posted its all-time greatest quarterly contraction of 32.7%, though this was slightly better than expectations.  Markets also focused on Friday’s expiration of supplemental unemployment benefits and congressional negotiations to extend them and implement a phase 4 coronavirus stimulus package.  At week’s end the S&P 500 Index increased 1.7% to 3,271.12, the Nasdaq Composite Index rose 3.7% to 10,745.27, the 10-year U.S. interest rate fell 6 bps to 53bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened another 1.2%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending July 31, 2020)

August 03, 2020 | Jeff Klearman
All three major U.S. stock indexes ended higher (moving in a zig-zag fashion), the U.S. dollar continued to weaken and the 10-year U.S Treasury rate fell last week as investors digested earnings and economic reports, FOMC statements, growing Covid-19 cases and congressional stimulus bill progress.   Earnings reports, though generally mixed, provided strong support for U.S. stock markets with four major technology companies reporting better-than-expected results after the market on Thursday.  Apple results were particularly strong, pushing the share price of Apple over 10% higher on Friday and raising its market capitalization to over $1.8 trillion. Comments by Fed Chairman Jerome Powell following the end of a 2-day FOMC meeting on Wednesday reaffirmed the Fed’s commitment to maintain aggressive monetary policy to support maximum employment and price stability.  Chairman Powell also said the U.S. economy faces a long road to recovery, that the virus will determine the path of that recovery and emphasized the importance of fiscal policy to support the economy.   Economic reports last week were also mixed with pending home sales, consumer spending and durable goods orders reports all better-than-expected while weekly jobless claims were slightly higher than expected.  The first estimate of 2nd  quarter GDP, released Thursday, posted its all-time greatest quarterly contraction of 32.7%, though this was slightly better than expectations.  Markets also focused on Friday’s expiration of supplemental unemployment benefits and congressional negotiations to extend them and implement a phase 4 coronavirus stimulus package.  At week’s end the S&P 500 Index increased 1.7% to 3,271.12, the Nasdaq Composite Index rose 3.7% to 10,745.27, the 10-year U.S. interest rate fell 6 bps to 53bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened another 1.2%.
Riding on the previous week’s momentum, U.S. stock markets moved higher on Monday with the Nasdaq Composite Index reaching another record high. Increased investor optimism spurred by the EU’s passage of an $860 billion coronavirus recovery fund, increased hopes of a phase 4 U.S. coronavirus stimulus package and positive developments regarding a Covid-19 vaccine helped move the S&P 500 Index higher through Wednesday. Despite a strong Microsoft earnings report after the close on Wednesday, both the S&P 500 and the Nasdaq Composite Index moved lower on Thursday with the Nasdaq Composite Index falling over 2%. A larger-than-hoped-for jobless claims number, new U.S-China frictions resulting in the closing of the China consulate in Houston, rising Covid-19 cases and the rotation out of tech into cyclical stocks all contributed to Thursday’s as well as Friday’s U.S. stock market declines. The U.S. dollar (as measured by the U.S. Dollar Index – DXY) weakened significantly over the week, pressured lower by increased concerns over the growing number of U.S. Covid-19 cases, uncertainty regarding a phase 4 coronavirus stimulus package and expectations EU GDP growth will significantly outpace U.S. GDP growth over the next year. At week’s end the S&P 500 Index decreased 0.3% to 3,215.63, the Nasdaq Composite Index fell 1.3% to 10,363.18, the 10-year U.S. interest rate fell 4 bps to 59bps and the U.S. dollar (as measured by the U.S. Dollar index - DXY) weakened 1.7%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending July 24, 2020)

July 27, 2020 | Jeff Klearman
Riding on the previous week’s momentum, U.S. stock markets moved higher on Monday with the Nasdaq Composite Index reaching another record high. Increased investor optimism spurred by the EU’s passage of an $860 billion coronavirus recovery fund, increased hopes of a phase 4 U.S. coronavirus stimulus package and positive developments regarding a Covid-19 vaccine helped move the S&P 500 Index higher through Wednesday. Despite a strong Microsoft earnings report after the close on Wednesday, both the S&P 500 and the Nasdaq Composite Index moved lower on Thursday with the Nasdaq Composite Index falling over 2%. A larger-than-hoped-for jobless claims number, new U.S-China frictions resulting in the closing of the China consulate in Houston, rising Covid-19 cases and the rotation out of tech into cyclical stocks all contributed to Thursday’s as well as Friday’s U.S. stock market declines. The U.S. dollar (as measured by the U.S. Dollar Index – DXY) weakened significantly over the week, pressured lower by increased concerns over the growing number of U.S. Covid-19 cases, uncertainty regarding a phase 4 coronavirus stimulus package and expectations EU GDP growth will significantly outpace U.S. GDP growth over the next year. At week’s end the S&P 500 Index decreased 0.3% to 3,215.63, the Nasdaq Composite Index fell 1.3% to 10,363.18, the 10-year U.S. interest rate fell 4 bps to 59bps and the U.S. dollar (as measured by the U.S. Dollar index - DXY) weakened 1.7%.

Though base metal price changes were mixed last week, all base metal prices fell between 3% and 4% Friday as the U.S. dollar strengthened and amid increasing concerns of the effect of rising interest rates.    Copper prices, up almost 5% through Thursday (and at 10-year highs) on expectations of post-pandemic economic growth and on concerns of supply shortages, fell 4% on Friday.  Nickel prices, up just under a percent through Wednesday, ended the week down over 5%, possibly also affected by Elon Musk’s Thursday’s tweet saying Tesla would be switching some cars to iron-based batteries away from nickel-based.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (February 26, 2021)

March 01, 2021 | Jeff Klearman
Though base metal price changes were mixed last week, all base metal prices fell between 3% and 4% Friday as the U.S. dollar strengthened and amid increasing concerns of the effect of rising interest rates.    Copper prices, up almost 5% through Thursday (and at 10-year highs) on expectations of post-pandemic economic growth and on concerns of supply shortages, fell 4% on Friday.  Nickel prices, up just under a percent through Wednesday, ended the week down over 5%, possibly also affected by Elon Musk’s Thursday’s tweet saying Tesla would be switching some cars to iron-based batteries away from nickel-based.
Oil prices moved higher again last week with WTI and Brent crude oil prices reaching levels not seen in over a year.   Brent crude oil prices broke $60/barrel last week while WTI crude oil prices closed the week just below at $59/barrel (both May futures prices).  Oil prices continue to be supported by continued larger-than-expected drawdowns in U.S and OECD inventory levels, strong Chinese demand,  OPEC+ production restraint and increased expectations of passage of the $1.9 trillion U.S. stimulus package.   Both WTI and Brent crude oil futures contracts continue to trade in backwardation indicating investor concern regarding possible supply shortages relative to prospective demand.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (February 12, 2021)

February 16, 2021 | Jeff Klearman
Oil prices moved higher again last week with WTI and Brent crude oil prices reaching levels not seen in over a year.   Brent crude oil prices broke $60/barrel last week while WTI crude oil prices closed the week just below at $59/barrel (both May futures prices).  Oil prices continue to be supported by continued larger-than-expected drawdowns in U.S and OECD inventory levels, strong Chinese demand,  OPEC+ production restraint and increased expectations of passage of the $1.9 trillion U.S. stimulus package.   Both WTI and Brent crude oil futures contracts continue to trade in backwardation indicating investor concern regarding possible supply shortages relative to prospective demand.
Oil prices moved sharply higher last week supported by continued drawdowns in inventory levels, OPEC+ production restraint and increased expectations of passage of the $1.9 trillion U.S. stimulus package.   Both WTI and Brent crude oil futures contracts are trading in backwardation indicating investor concern regarding possible supply shortages relative to prospective demand.  Oil prices last week rose to levels not seen in more than a year.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (February 5, 2021)

February 08, 2021 | Jeff Klearman
Oil prices moved sharply higher last week supported by continued drawdowns in inventory levels, OPEC+ production restraint and increased expectations of passage of the $1.9 trillion U.S. stimulus package.   Both WTI and Brent crude oil futures contracts are trading in backwardation indicating investor concern regarding possible supply shortages relative to prospective demand.  Oil prices last week rose to levels not seen in more than a year.
Grain prices moved sharply higher last week, reversing most of the previous week’s losses.   Historically large corn sales to China l (as well as to  Japan) were the primary reason for the increase in corn prices last week.  Soybean prices also continue to be supported by stronger-than-expected exports to China as well as by concerns rain in Brazil will hamper soybean harvests.  Wheat prices moved higher over Russian export restrictions and on concerns Argentina may restrict exports as well.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (January 29, 2021)

February 01, 2021 | Jeff Klearman
Grain prices moved sharply higher last week, reversing most of the previous week’s losses.   Historically large corn sales to China l (as well as to  Japan) were the primary reason for the increase in corn prices last week.  Soybean prices also continue to be supported by stronger-than-expected exports to China as well as by concerns rain in Brazil will hamper soybean harvests.  Wheat prices moved higher over Russian export restrictions and on concerns Argentina may restrict exports as well.
Grain prices moved significantly lower last week, reversing most of the gains recorded the previous week.    Favorable rainfall in South America was primarily the trigger for the steep selloff in corn and soybean prices, with increased corn and soybean plantings in South America adding to supply expectations and helping to offset low global stock levels and forecasted harvest yields.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (January 22, 2021)

January 25, 2021 | Jeff Klearman
Grain prices moved significantly lower last week, reversing most of the gains recorded the previous week.    Favorable rainfall in South America was primarily the trigger for the steep selloff in corn and soybean prices, with increased corn and soybean plantings in South America adding to supply expectations and helping to offset low global stock levels and forecasted harvest yields.

The unfortunate reality is that a deep chasm stands between investor income requirements and what conventional strategies can now yield. Alternative Income may help bridge the divide.

Topic: Income

Publication Type: Investment Cases

The Income Blueprint: Potential Strategy for Income Replacement with HIPS

October 13, 2020 | Ryan Giannotto, CFA, Director of Research
The unfortunate reality is that a deep chasm stands between investor income requirements and what conventional strategies can now yield. Alternative Income may help bridge the divide.
Mental accounting is a truly defining feature of the human condition. Find out how much of your income is mental, and how it may prevent you from acheiving your true income goals.

Topic: Alternative Income

Publication Type: Investment Cases

How Much of Your Income is Mental? Overcoming Human Fallacies in Investing

March 27, 2020 | Ryan Giannotto, CFA, Director of Research
Mental accounting is a truly defining feature of the human condition. Find out how much of your income is mental, and how it may prevent you from acheiving your true income goals.
If you thought achieving income yields was difficult, life will only get harder—the Fed that giveth can taketh away. Just as investors were getting accustomed to the taste of at least modestly non-zero rates, expectations have shifted swiftly.

Topic: Alternative Income

Publication Type: Investment Cases

Help! What Happened to My Income?

March 27, 2020 | Ryan Giannotto, CFA, Director of Research
If you thought achieving income yields was difficult, life will only get harder—the Fed that giveth can taketh away. Just as investors were getting accustomed to the taste of at least modestly non-zero rates, expectations have shifted swiftly.
While generating sustainable yield for income investing has never been an easy task, the latest shockwaves to reverberate through interest rate markets have only compounded this challenge. The core of this problem for investors, whether retirees, long-term savers, or anyone looking to diversify their returns, is they are probably looking for yield in all the wrong places.

Topic: Income

Publication Type: Investment Cases

Looking for Yield in All the Wrong Places: 7% Income and How to Get it in Today’s Market

March 27, 2020 | Ryan Giannotto, CFA, Director of Research
While generating sustainable yield for income investing has never been an easy task, the latest shockwaves to reverberate through interest rate markets have only compounded this challenge. The core of this problem for investors, whether retirees, long-term savers, or anyone looking to diversify their returns, is they are probably looking for yield in all the wrong places.
GraniteShares, a disruptive exchange-traded fund (ETF) company, debuted a revised methodology for the index underlying the GraniteShares HIPS US High Income ETF (NYSE Arca: HIPS), a high alternative income-focused fund that invests in a diversified basket of pass-through securities.

Topic: Income

Publication Type: Viewpoints

GraniteShares Revises Index Methodology for HIPS US High Income ETF (HIPS)

March 27, 2020 | GraniteShares
GraniteShares, a disruptive exchange-traded fund (ETF) company, debuted a revised methodology for the index underlying the GraniteShares HIPS US High Income ETF (NYSE Arca: HIPS), a high alternative income-focused fund that invests in a diversified basket of pass-through securities.

When no company or industry is immune from disruptive challenge, perhaps never has the number of potential losers been so plentiful, nor the disparity between winners and losers been so vast. Rather than succumb to conventional wisdom, perhaps the only thing more important than what you put IN your portfolio is what you XOUT.

Topic: XOUT

Publication Type: Investment Cases

How Many Losers Are in the S&P 500?

August 17, 2020 | Ryan Giannotto, CFA, Director of Research
When no company or industry is immune from disruptive challenge, perhaps never has the number of potential losers been so plentiful, nor the disparity between winners and losers been so vast. Rather than succumb to conventional wisdom, perhaps the only thing more important than what you put IN your portfolio is what you XOUT.
XOUT’s methodology counters traditional investment strategies. Rather than trying to pick a select few winners, XOUT flips the investment paradigm by seeking to avoid losers that are failing to adapt amid today’s environment of unprecedented technological change.

Topic: Precious Metals , XOUT

Publication Type: Viewpoints

GraniteShares Launches XOUT U.S. Large Cap ETF (XOUT)

March 27, 2020 | GraniteShares
XOUT’s methodology counters traditional investment strategies. Rather than trying to pick a select few winners, XOUT flips the investment paradigm by seeking to avoid losers that are failing to adapt amid today’s environment of unprecedented technological change.
GraniteShares is an independent, fully funded ETF company headquartered in New York City. GraniteShares’ ETF suite includes one of the lowest-cost physical gold ETFs (BAR), a broad-based commodity ETF (COMB), an ETF that seeks to exclude U.S. large cap companies most likely to suffer from technological disruption over the long term (XOUT), a high alternative income-focused fund that invests in pass-through securities (HIPS) and the lowest-cost* physical platinum ETF (PLTM). GraniteShares has experienced robust growth in 2019, recently surpassing $700 million in total assets under management.

Topic: Precious Metals , Commodity Baskets , Income , XOUT

Publication Type: Investment Cases

GraniteShares Announces Change in ETF Lineup

March 27, 2020 | GraniteShares
GraniteShares is an independent, fully funded ETF company headquartered in New York City. GraniteShares’ ETF suite includes one of the lowest-cost physical gold ETFs (BAR), a broad-based commodity ETF (COMB), an ETF that seeks to exclude U.S. large cap companies most likely to suffer from technological disruption over the long term (XOUT), a high alternative income-focused fund that invests in pass-through securities (HIPS) and the lowest-cost* physical platinum ETF (PLTM). GraniteShares has experienced robust growth in 2019, recently surpassing $700 million in total assets under management.

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