It is difficult to find an asset in more than one roll than in silver.
On Tuesday, silver for delivery in September SI00,
It rose nearly 7%, the highest settlement since March 2014, and 83% above its March lows. Silver also rose in the early hours of Wednesday.
“The precious metal appears to have been caught in the perfect storm,” says Jeroen Blokland, senior portfolio manager at Robeco Asset Management.
Much of what is driving silver is also driving gold: aggressive monetary policy financing of fiscal spending, which limits the ability to increase bond yields. That’s sending lower inflation-adjusted, or real, returns, which tends to drive precious metals.
Also, silver is still cheap relative to GC00 gold,
by historical measures.
But the latest catalyst could be the European Union’s 750 billion euro recovery fund, which not only allocated 30% of spending on environmental initiatives, but said that the financing of other projects should be in line with the climate agreement. from Paris. Furthermore, the possibility for the EU to issue so-called green bonds can create a safe asset, providing benchmark security for private sector green bond issuance.
“However, the catalyst for the recent rally appears to be the fact that the world is aiming for a ‘green’ recovery, with a significant part of the stimulus assigned to environmentally friendly measures,” says Blokland. “Since silver has a wide range of industrial uses, including electronics and solar panels, the demand for this metal should also increase from this angle. We remain overweight commodities as prospects for industrial and precious metals look bright. ”
The buzz
The wave of profit continues, with the market focusing on two after the close: software giant Microsoft MSFT,
and manufacturer of electric vehicles Tesla TSLA,
whose shares have more than doubled since Chief Executive Elon Musk said the share price was too high.
Musk qualified Tuesday for a $ 2.1 billion payday, as Tesla’s six-month average market capitalization for the first time has reached $ 150 billion.
The latest salvo in tensions between the United States and China came when the United States ordered the closure of the Chinese Consulate General in Houston. You can see a video of documents that are burning. China’s foreign ministry says it “strongly condemned” the measure and warned of retaliation.
United States President Donald Trump warned that the pandemic “would get worse before it got better” in his first report since April. The seven-day moving average of new cases has fallen in 19 states in the past three days, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Existing home sales data for June is expected to confirm the boom in property market activity.
The market
After Tuesday’s session, when the DJIA Industrial DIA was shipped,
top and the Nasdaq Composite COMP,
to the downside, US stock futures again mixed, with Dow YM00 futures,
lower futures and Nasdaq-100 NQ00,
higher.
The USDCNH dollar,
It rose above key level 7 against the Chinese yuan after the announcement of the closure of the Houston consulate.
CL.1 oil futures,
it fell.
The graphic
Jonathan Golub, chief strategist at Credit Suisse, says there is much to worry about: an increase in COVID-19 cases, a strained relationship with the world’s number two economy, growing deficits and the possibility of higher taxes, but not the market concentration. Sure, Apple AAPL,
Microsoft, Amazon AMZN,
GOOG Alphabet,
and Facebook FB,
They represent 22% of the S&P 500’s market capitalization, up from 18% of the top five in March 2000. But they are also offering faster relative growth and trading at a much lower multiple, he says.
Random readings
Trump asked the U.S. ambassador to the United Kingdom to run the British Open golf tournament at the Trump Turnberry complex in Scotland, according to the New York Times.
A large earthquake shook Alaska, triggering a tsunami warning.
Take a look at this comet, before it disappears for another 6,800 years.
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