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They Best of What They Said and I Read Week Ending 5/20/2018

Short excerpts from articles I found interesting.

I may not agree with the author and the following material is not intended as investment advice.

Barron’s  – May 19, 2018 – Stocks Season Over, Stocks Quietly Subside – Vito J. Racanelli

“…Admittedly, there was a dearth of market-moving economic data releases. But not even an uptick in political rhetoric from North Korea was enough to push the market out of tight daily trading ranges. A rise in 10-year Treasury yields to as high as 3.12%, at one point from below 3% last week, was the main bearish impetus for equity traders. The yield settled at 3.07%.”

 “…The Dow Jones Industrial Average dropped 116 points, or 0.5%, to 24,715.09. The Standard & Poor’s 500 index also lost 0.5%, or 15 points, to 2712.97…The Nasdaq Composite gave up 0.7% to finish at 7354.34.…Despite increasing concerns about interest rates, small- capitalization stocks, as measured by the Russell 2000 index, hit a record last week, at 1626.63. Some bulls take that to be a harbinger of better things to come from large-caps…”

U.S. Global Investors – May 18, 2018 – Investor Alert – by Frank Holmes

“…The same money went to finance bitcoin awareness billboards outside the Omaha office of Warren Buffett, who recently bashed the cryptocurrency, calling it “rat poison squared.”  “Warren,” the billboards read, “You said you were wrong about Google and Amazon. Maybe you’re wrong about Bitcoin?”

“…Credit Agricole strategists Valentin Marinov and Manuel Oliveri wrote in a note this week that the dollar’s recent rally has “pressured gold to levels where it is a worthwhile investment” with limited downside risk, reports Bloomberg. The gold-silver ratio shows that an ounce of gold can buy you 79 ounces of silver, compared to the average of 63 ounces since 1994, which indicates that silver is poised for a rebound. Silver could rise at a faster rate than gold due to stronger industrial demand and the Chinese middle class boosting demand for silver jewelry, writes Bloomberg Intelligence analyst Eily Ong.”

“…Goldcorp Chairman Ian Telfer predicts that the world has reached peak gold supply and mine production will continue to fall, reports Seeking Alpha. Telfer said, “Are we not looking for it? Are we bad at finding it? Or have we found it all? My answer is we found it all. At $1,300/ounce gold, we found it all.” Shrinking gold supply could be positive for the bullion price, while it could be negative for the larger gold mining companies.”

“…In a study published this week, a blockchain specialist with PwC makes the case that the electricity needed to mine bitcoin is already at epic proportions and expected to climb higher. Alex de Vries estimates that the global bitcoin network currently consumes at least 2.55 gigawatts of energy, or nearly as much as Ireland does. In the future, that figure could reach at least 7.67 gigawatts, putting it on par with the entire country of Austria. The study, appearing in the journal Joule, could attract additional negative attention to the cryptocurrency space.”

“…Crude oil is set for the longest run of weekly gains in seven years as concern over supply disruptions from the Middle East to Venezuela grows and a global glut dissipates. Renewed U.S. sanctions on Iran and shrinking supplies from Venezuela have buoyed crude’s recent rally. The International Energy Agency said OPEC and its allies have finally eliminated a global surplus, adding to the bullish signs.”

The Economist – May 12, 2018 – The World This Week

“Zimbabwe, which has suffered from a crippling liquidity crisis in financial markets because of a shortage of foreign currency, is now at risk of suffering an acute liquidity crisis in its alcohol market.  Delta, its biggest brewer, is running out of ingredients because it cannot get dollars to pay for imports; it may have to cut beer supplies.” 

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