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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

03 September, 2020 | GraniteShares
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.

The 60/40 portfolio, a strategy of dividing assets between 60% large cap equities and 40% bonds, has long served as the de facto benchmark for risk adjusted returns. The sizable equity allocation allows for decent upside capture and long-term growth, while the fixed income pool dampens the volatility inherent to stock ownership.

Topic: Gold

Publication Type: Investment Cases

Is Your Portfolio Sharpe Enough? Improving a 60/40 with Gold

02 September, 2020 | GraniteShares
The 60/40 portfolio, a strategy of dividing assets between 60% large cap equities and 40% bonds, has long served as the de facto benchmark for risk adjusted returns. The sizable equity allocation allows for decent upside capture and long-term growth, while the fixed income pool dampens the volatility inherent to stock ownership.

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)

17 August, 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)

10 August, 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)

03 August, 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%.

Energy prices moved sharply lower last week with natural gas prices leading the decline.   Fears of a central bank-induced global recession were the primary driving force behind the decline, followed by a stronger U.S. dollar and reports of possible new Covid-related restrictions in Beijing.  Increased oil production in the U.S., reaching 12 million barrels/day (the highest since April 2020) and Russia claiming its oil exports will increase in 2022 may have also pressured prices lower.   Demand side factors prevailed despite sharply reduced Libyan production, the failure of OPEC+ to implement planned production increases and new sanctions on Iranian and Chinese firms that enable Iranian oil exports.   Natural gas prices plunged over 22%, falling 17% on Tuesday alone, after a Texas LNG facility extended the forecasted shut down period until later this year due to damage suffered in a fire the previous week.  

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending June 17, 2022)

21 June, 2022 | Jeff Klearman
Energy prices moved sharply lower last week with natural gas prices leading the decline.   Fears of a central bank-induced global recession were the primary driving force behind the decline, followed by a stronger U.S. dollar and reports of possible new Covid-related restrictions in Beijing.  Increased oil production in the U.S., reaching 12 million barrels/day (the highest since April 2020) and Russia claiming its oil exports will increase in 2022 may have also pressured prices lower.   Demand side factors prevailed despite sharply reduced Libyan production, the failure of OPEC+ to implement planned production increases and new sanctions on Iranian and Chinese firms that enable Iranian oil exports.   Natural gas prices plunged over 22%, falling 17% on Tuesday alone, after a Texas LNG facility extended the forecasted shut down period until later this year due to damage suffered in a fire the previous week.  

Almost unchanged through Thursday, spot gold prices rose 1 ¼ percent Friday following a higher-than-expected CPI release and a record low University of Michigan Consumer Sentiment reading.  Concerns of both continued elevated levels of inflation and of an aggressively tightening Fed pushing the U.S. economy into recession lent support to gold prices despite rising 10-year real yields and a stronger U.S. dollar.      

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending June 10, 2022)

13 June, 2022 | Jeff Klearman
Almost unchanged through Thursday, spot gold prices rose 1 ¼ percent Friday following a higher-than-expected CPI release and a record low University of Michigan Consumer Sentiment reading.  Concerns of both continued elevated levels of inflation and of an aggressively tightening Fed pushing the U.S. economy into recession lent support to gold prices despite rising 10-year real yields and a stronger U.S. dollar.      

Supported by the end of Shanghai Covid-related lockdowns, the EU formally agreeing to ban 90% of Russian oil by year’s end, much lower-than-expected inventory levels and economic reports indicating a strong economy, WTI crude oil prices increased north of 3% last week.  The increase came despite OPECs 50% increase of planned monthly production increases and despite a significant increase in U.S. oil production.   Gasoline and heating oil prices increased much more than WTI crude oil prices, driven higher by strong demand, historically low inventory levels and constrained refining capacity.   Gasoline and heating oil prices rose close to 9%. 

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending June 3, 2022)

06 June, 2022 | Jeff Klearman
Supported by the end of Shanghai Covid-related lockdowns, the EU formally agreeing to ban 90% of Russian oil by year’s end, much lower-than-expected inventory levels and economic reports indicating a strong economy, WTI crude oil prices increased north of 3% last week.  The increase came despite OPECs 50% increase of planned monthly production increases and despite a significant increase in U.S. oil production.   Gasoline and heating oil prices increased much more than WTI crude oil prices, driven higher by strong demand, historically low inventory levels and constrained refining capacity.   Gasoline and heating oil prices rose close to 9%. 

Spot gold prices moved higher last week supported by a weaker U.S. dollar, rising 10-year inflation expectations and falling 10-year real rates.  Up over 1% through Tuesday mainly on falling longer-term real rates and a weaker U.S. dollar, gold prices fell Wednesday and Thursday following the release of the FOMC minutes.  The minutes revealed no surprises, however, expressing the possibility the Fed will raise rates 50bps in the next two meetings in a desire to squelch inflation.   Spot gold prices moved slightly higher Friday to the end week up 0.4%.     

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending May 27, 2022)

31 May, 2022 | GraniteShares
Spot gold prices moved higher last week supported by a weaker U.S. dollar, rising 10-year inflation expectations and falling 10-year real rates.  Up over 1% through Tuesday mainly on falling longer-term real rates and a weaker U.S. dollar, gold prices fell Wednesday and Thursday following the release of the FOMC minutes.  The minutes revealed no surprises, however, expressing the possibility the Fed will raise rates 50bps in the next two meetings in a desire to squelch inflation.   Spot gold prices moved slightly higher Friday to the end week up 0.4%.     

Spot gold prices moved higher last week posting gains every single day but Tuesday.  Lower 10-year Treasury rates combined with a weaker U.S. dollar supported gold prices despite Fed Chairman Powell’s hawkish comments Tuesday.   Falling, volatile stock markets along with increased concerns of recession may have increased safe-haven demand for gold, providing support for gold prices as well.  While 10-year Treasury rates fell last week (down 14bps) all of the decline came from falling 10-year inflation expectations perhaps reflecting increased expectations of slower economic growth or recession.

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending May 20, 2022)

23 May, 2022 | Jeff Klearman
Spot gold prices moved higher last week posting gains every single day but Tuesday.  Lower 10-year Treasury rates combined with a weaker U.S. dollar supported gold prices despite Fed Chairman Powell’s hawkish comments Tuesday.   Falling, volatile stock markets along with increased concerns of recession may have increased safe-haven demand for gold, providing support for gold prices as well.  While 10-year Treasury rates fell last week (down 14bps) all of the decline came from falling 10-year inflation expectations perhaps reflecting increased expectations of slower economic growth or recession.

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

13 October, 2020 | GraniteShares
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.

Income is one of the most basic, yet important needs of any portfolio—the capacity to generate enduring cashflows to fund expenses. While searching for sustainable yield is never easy, over the last decade income investing become a most unpalatable cocktail — one part frustration and two parts despair (add bitters to taste).  These were the difficulties that pervaded income investing before COVID-19 struck, an economic shock that redoubled the income challenge to near unimaginable levels.

Topic: Income

Publication Type: Investment Cases

The Income Blueprint: Potential Strategies for Income Replacement with HIPS

10 September, 2020 | GraniteShares
Income is one of the most basic, yet important needs of any portfolio—the capacity to generate enduring cashflows to fund expenses. While searching for sustainable yield is never easy, over the last decade income investing become a most unpalatable cocktail — one part frustration and two parts despair (add bitters to taste).  These were the difficulties that pervaded income investing before COVID-19 struck, an economic shock that redoubled the income challenge to near unimaginable levels.

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

27 March, 2020 | GraniteShares
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?

27 March, 2020 | GraniteShares
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

27 March, 2020 | GraniteShares
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.

The speed and magnitude of technological disruption is relevant because current and future technologies will continue to create winners (i.e., the disruptors) and losers (i.e., the disruptees) among all companies across industries faster than the market may realize.

Topic: XOUT

Publication Type: Investment Cases

The Cost of Underestimating Technological Disruption

06 October, 2021 | GraniteShares
The speed and magnitude of technological disruption is relevant because current and future technologies will continue to create winners (i.e., the disruptors) and losers (i.e., the disruptees) among all companies across industries faster than the market may realize.

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?

17 August, 2020 | GraniteShares
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.

The response to novel coronavirus has emerged as one of the most economically disruptive events in human history. With the physical economy all but tossed asunder, COVID19 has aggressively intensified the drumbeat of digital disruption impacting all industries. A rapid bifurcation in the market is underway, between companies with adaptive ties to the virtual economy and those that are reduced to bailout dependency—no one is immune.

Topic: XOUT

Publication Type: Market Commentaries

An Economy Rebalanced: Q2 Top 10 Market Eliminations by the XOUT Strategy

14 August, 2020 | GraniteShares
The response to novel coronavirus has emerged as one of the most economically disruptive events in human history. With the physical economy all but tossed asunder, COVID19 has aggressively intensified the drumbeat of digital disruption impacting all industries. A rapid bifurcation in the market is underway, between companies with adaptive ties to the virtual economy and those that are reduced to bailout dependency—no one is immune.

The latest XOUT rebalance gives fresh insight into the pulse of disruption, and significantly, the players who are falling behind in the race to innovate effectively. Here we examine the 10 largest companies XOUT eliminates this quarter—the roughly $3 trillion in market cap vulnerable to secular decline. When yesterday’s titans can rapidly become today’s bankruptcies, the XOUT Index continually looks to identify potential market laggards, aiming to leave them out of the portfolio.

Topic: XOUT

Publication Type: Market Commentaries

See Ya Dimon, Hello Fink: Top 10 XOUT’s for Q1 2020

28 March, 2020 | GraniteShares
The latest XOUT rebalance gives fresh insight into the pulse of disruption, and significantly, the players who are falling behind in the race to innovate effectively. Here we examine the 10 largest companies XOUT eliminates this quarter—the roughly $3 trillion in market cap vulnerable to secular decline. When yesterday’s titans can rapidly become today’s bankruptcies, the XOUT Index continually looks to identify potential market laggards, aiming to leave them out of the portfolio.

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)

27 March, 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.

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

03 September, 2020 | GraniteShares
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.
The 60/40 portfolio, a strategy of dividing assets between 60% large cap equities and 40% bonds, has long served as the de facto benchmark for risk adjusted returns. The sizable equity allocation allows for decent upside capture and long-term growth, while the fixed income pool dampens the volatility inherent to stock ownership.

Topic: Gold

Publication Type: Investment Cases

Is Your Portfolio Sharpe Enough? Improving a 60/40 with Gold

02 September, 2020 | GraniteShares
The 60/40 portfolio, a strategy of dividing assets between 60% large cap equities and 40% bonds, has long served as the de facto benchmark for risk adjusted returns. The sizable equity allocation allows for decent upside capture and long-term growth, while the fixed income pool dampens the volatility inherent to stock ownership.
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)

17 August, 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)

10 August, 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)

03 August, 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%.

Energy prices moved sharply lower last week with natural gas prices leading the decline.   Fears of a central bank-induced global recession were the primary driving force behind the decline, followed by a stronger U.S. dollar and reports of possible new Covid-related restrictions in Beijing.  Increased oil production in the U.S., reaching 12 million barrels/day (the highest since April 2020) and Russia claiming its oil exports will increase in 2022 may have also pressured prices lower.   Demand side factors prevailed despite sharply reduced Libyan production, the failure of OPEC+ to implement planned production increases and new sanctions on Iranian and Chinese firms that enable Iranian oil exports.   Natural gas prices plunged over 22%, falling 17% on Tuesday alone, after a Texas LNG facility extended the forecasted shut down period until later this year due to damage suffered in a fire the previous week.  

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending June 17, 2022)

21 June, 2022 | Jeff Klearman
Energy prices moved sharply lower last week with natural gas prices leading the decline.   Fears of a central bank-induced global recession were the primary driving force behind the decline, followed by a stronger U.S. dollar and reports of possible new Covid-related restrictions in Beijing.  Increased oil production in the U.S., reaching 12 million barrels/day (the highest since April 2020) and Russia claiming its oil exports will increase in 2022 may have also pressured prices lower.   Demand side factors prevailed despite sharply reduced Libyan production, the failure of OPEC+ to implement planned production increases and new sanctions on Iranian and Chinese firms that enable Iranian oil exports.   Natural gas prices plunged over 22%, falling 17% on Tuesday alone, after a Texas LNG facility extended the forecasted shut down period until later this year due to damage suffered in a fire the previous week.  
Almost unchanged through Thursday, spot gold prices rose 1 ¼ percent Friday following a higher-than-expected CPI release and a record low University of Michigan Consumer Sentiment reading.  Concerns of both continued elevated levels of inflation and of an aggressively tightening Fed pushing the U.S. economy into recession lent support to gold prices despite rising 10-year real yields and a stronger U.S. dollar.      

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending June 10, 2022)

13 June, 2022 | Jeff Klearman
Almost unchanged through Thursday, spot gold prices rose 1 ¼ percent Friday following a higher-than-expected CPI release and a record low University of Michigan Consumer Sentiment reading.  Concerns of both continued elevated levels of inflation and of an aggressively tightening Fed pushing the U.S. economy into recession lent support to gold prices despite rising 10-year real yields and a stronger U.S. dollar.      
Supported by the end of Shanghai Covid-related lockdowns, the EU formally agreeing to ban 90% of Russian oil by year’s end, much lower-than-expected inventory levels and economic reports indicating a strong economy, WTI crude oil prices increased north of 3% last week.  The increase came despite OPECs 50% increase of planned monthly production increases and despite a significant increase in U.S. oil production.   Gasoline and heating oil prices increased much more than WTI crude oil prices, driven higher by strong demand, historically low inventory levels and constrained refining capacity.   Gasoline and heating oil prices rose close to 9%. 

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending June 3, 2022)

06 June, 2022 | Jeff Klearman
Supported by the end of Shanghai Covid-related lockdowns, the EU formally agreeing to ban 90% of Russian oil by year’s end, much lower-than-expected inventory levels and economic reports indicating a strong economy, WTI crude oil prices increased north of 3% last week.  The increase came despite OPECs 50% increase of planned monthly production increases and despite a significant increase in U.S. oil production.   Gasoline and heating oil prices increased much more than WTI crude oil prices, driven higher by strong demand, historically low inventory levels and constrained refining capacity.   Gasoline and heating oil prices rose close to 9%. 
Spot gold prices moved higher last week supported by a weaker U.S. dollar, rising 10-year inflation expectations and falling 10-year real rates.  Up over 1% through Tuesday mainly on falling longer-term real rates and a weaker U.S. dollar, gold prices fell Wednesday and Thursday following the release of the FOMC minutes.  The minutes revealed no surprises, however, expressing the possibility the Fed will raise rates 50bps in the next two meetings in a desire to squelch inflation.   Spot gold prices moved slightly higher Friday to the end week up 0.4%.     

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending May 27, 2022)

31 May, 2022 | GraniteShares
Spot gold prices moved higher last week supported by a weaker U.S. dollar, rising 10-year inflation expectations and falling 10-year real rates.  Up over 1% through Tuesday mainly on falling longer-term real rates and a weaker U.S. dollar, gold prices fell Wednesday and Thursday following the release of the FOMC minutes.  The minutes revealed no surprises, however, expressing the possibility the Fed will raise rates 50bps in the next two meetings in a desire to squelch inflation.   Spot gold prices moved slightly higher Friday to the end week up 0.4%.     
Spot gold prices moved higher last week posting gains every single day but Tuesday.  Lower 10-year Treasury rates combined with a weaker U.S. dollar supported gold prices despite Fed Chairman Powell’s hawkish comments Tuesday.   Falling, volatile stock markets along with increased concerns of recession may have increased safe-haven demand for gold, providing support for gold prices as well.  While 10-year Treasury rates fell last week (down 14bps) all of the decline came from falling 10-year inflation expectations perhaps reflecting increased expectations of slower economic growth or recession.

Topic: Commodities

Commoditized Wisdom: Metals & Markets Update (Week Ending May 20, 2022)

23 May, 2022 | Jeff Klearman
Spot gold prices moved higher last week posting gains every single day but Tuesday.  Lower 10-year Treasury rates combined with a weaker U.S. dollar supported gold prices despite Fed Chairman Powell’s hawkish comments Tuesday.   Falling, volatile stock markets along with increased concerns of recession may have increased safe-haven demand for gold, providing support for gold prices as well.  While 10-year Treasury rates fell last week (down 14bps) all of the decline came from falling 10-year inflation expectations perhaps reflecting increased expectations of slower economic growth or recession.

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

13 October, 2020 | GraniteShares
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.
Income is one of the most basic, yet important needs of any portfolio—the capacity to generate enduring cashflows to fund expenses. While searching for sustainable yield is never easy, over the last decade income investing become a most unpalatable cocktail — one part frustration and two parts despair (add bitters to taste).  These were the difficulties that pervaded income investing before COVID-19 struck, an economic shock that redoubled the income challenge to near unimaginable levels.

Topic: Income

Publication Type: Investment Cases

The Income Blueprint: Potential Strategies for Income Replacement with HIPS

10 September, 2020 | GraniteShares
Income is one of the most basic, yet important needs of any portfolio—the capacity to generate enduring cashflows to fund expenses. While searching for sustainable yield is never easy, over the last decade income investing become a most unpalatable cocktail — one part frustration and two parts despair (add bitters to taste).  These were the difficulties that pervaded income investing before COVID-19 struck, an economic shock that redoubled the income challenge to near unimaginable levels.
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

27 March, 2020 | GraniteShares
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?

27 March, 2020 | GraniteShares
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

27 March, 2020 | GraniteShares
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.

The speed and magnitude of technological disruption is relevant because current and future technologies will continue to create winners (i.e., the disruptors) and losers (i.e., the disruptees) among all companies across industries faster than the market may realize.

Topic: XOUT

Publication Type: Investment Cases

The Cost of Underestimating Technological Disruption

06 October, 2021 | GraniteShares
The speed and magnitude of technological disruption is relevant because current and future technologies will continue to create winners (i.e., the disruptors) and losers (i.e., the disruptees) among all companies across industries faster than the market may realize.
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?

17 August, 2020 | GraniteShares
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.
The response to novel coronavirus has emerged as one of the most economically disruptive events in human history. With the physical economy all but tossed asunder, COVID19 has aggressively intensified the drumbeat of digital disruption impacting all industries. A rapid bifurcation in the market is underway, between companies with adaptive ties to the virtual economy and those that are reduced to bailout dependency—no one is immune.

Topic: XOUT

Publication Type: Market Commentaries

An Economy Rebalanced: Q2 Top 10 Market Eliminations by the XOUT Strategy

14 August, 2020 | GraniteShares
The response to novel coronavirus has emerged as one of the most economically disruptive events in human history. With the physical economy all but tossed asunder, COVID19 has aggressively intensified the drumbeat of digital disruption impacting all industries. A rapid bifurcation in the market is underway, between companies with adaptive ties to the virtual economy and those that are reduced to bailout dependency—no one is immune.
The latest XOUT rebalance gives fresh insight into the pulse of disruption, and significantly, the players who are falling behind in the race to innovate effectively. Here we examine the 10 largest companies XOUT eliminates this quarter—the roughly $3 trillion in market cap vulnerable to secular decline. When yesterday’s titans can rapidly become today’s bankruptcies, the XOUT Index continually looks to identify potential market laggards, aiming to leave them out of the portfolio.

Topic: XOUT

Publication Type: Market Commentaries

See Ya Dimon, Hello Fink: Top 10 XOUT’s for Q1 2020

28 March, 2020 | GraniteShares
The latest XOUT rebalance gives fresh insight into the pulse of disruption, and significantly, the players who are falling behind in the race to innovate effectively. Here we examine the 10 largest companies XOUT eliminates this quarter—the roughly $3 trillion in market cap vulnerable to secular decline. When yesterday’s titans can rapidly become today’s bankruptcies, the XOUT Index continually looks to identify potential market laggards, aiming to leave them out of the portfolio.
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)

27 March, 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.