Western investor sentiment towards gold is at an all-time low, while we have literally been witnessing a  for the past two years.ETF outflows persist, particularly in Europe, while India and China step up .Why are the Chinese and Indians buying physical gold, while financial institutions in Western countries are reducing their exposure to the precious metal? What are the reasons behind this diametrically opposed behavior? The cryptocurrency rush in the West appears to be one of the main reasons for the disinterest in gold. Defensive investments, which traditionally gravitated towards the golden metal, are now turning to bitcoin and other crypto-currencies.This phenomenon mainly concerns younger investors, notably Generation Z, for whom traditional investing, such as active management and hedge funds, is a thing of the past. Today, they favor high-potential strategies with asymmetrical risk (limited loss, exponential gains).These young investors reject old standards such as oil, commodities and the contemporary art of the 1990s and 2000s. They value memes and digital culture.In just a few days, the capitalization of Fartcoin, nicknamed “the fart currency”, reached $800 million. This cryptocurrency is based on the slogan “hot air rises”, suggesting that its price is destined to soar.The fact that one memecoin, born of a simple joke between “degenerates”, exceeds the valuation of over 40% of listed companies in the USA shows the scale of the phenomenon. Generation Z in developed countries is taking advantage of the prevailing fiscal and monetary indiscipline, as well as the abundance of liquidity, to speculate on unregulated markets. Meanwhile, the […]

Image Source:   FedEx () has announced a significant strategic move by deciding to . This decision is expected to enhance the company’s focus on its core operations while addressing existing challenges within the shipping industry.The separation is projected to conclude within 18 months, marking a pivotal shift for the shipping giant. Analysts have long considered the freight division undervalued, and this move could unlock substantial value for the company. The spinoff is also anticipated to positively influence the broader less-than-truckload (LTL) market, potentially reshaping competitive dynamics.  Potential Impact of Freight Spinoff on FedEx’s Market PositionFollowing the spinoff announcement, FedEx shares surged by 8%, resulting in a $5 billion increase in the company’s market capitalization. Analysts have projected that FedEx Freight could be valued between $30 billion and $35 billion, indicating a significant upside potential.The company plans to bolster its dedicated salesforce by adding over 300 specialists, aiming to capitalize on the anticipated growth and market opportunities.Despite facing a $500 million loss from its largest customer, the USPS, FedEx’s stock has outperformed its primary competitor, UPS, which has seen a 22% decline this year. FedEx’s annual stock performance has shown a 9.1% increase, although it still underperforms compared to the .  FedEx Stock BriefFedEx’s stock price has demonstrated notable movement following the spinoff announcement. As of December 20, 2024, the  was $275.88, reflecting a slight recovery from recent declines. The stock had previously closed at $273.16, with fluctuations throughout December ranging from a high of $277.43 to a low of $273.16.The company’s shares have […]

The US Dollar hits another two-year high in Asian trading on Friday but retreats afterwards. Besides the US PCE inflation release, Quadruple Witching – the simultaneous expiration of four types of derivative contracts – will take place.  The US Dollar Index (DXY) reached 108.55 before facing some profit-taking.  The US Dollar (USD) retreats slightly on Friday, with the DXY Index trading at around 108.20 after eking out another fresh two-year high of 108.55 during the Asian-Pacific trading session. The move was supported by rising US Treasury yields, widening the rate-differential gap with other countries. This means more support for the US Dollar because it becomes more valuable to invest in and get a nice return on your deposit.Friday will be the last chance for traders to move any positions they might have with volatility set to spark up. That comes because of the so-called Quadruple Witching, which takes place four times per year – each third Friday of March, June, September, and December. During Quadruple Witching, four types of financial contracts expire simultaneously:  index futures, stock index options, stock options, and single-stock futures. All these need to be rolled over, unwinded and settled, leading to a significant increase in trading volumes and sometimes volatility surrounding the main assets.The  is gearing up for the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index for November. Expectations are for no significant upticks in the monthly figures. After the Fed’s warning on sticky inflation, any upside surprise could make markets doubt further over […]

It’s that time of year when Wall Street polishes up its crystal balls and predicts next year’s market returns. Since Wall Street never predicts a down year, these forecasts are often wrong and sometimes very wrong. For example, on December 7th, 2021, we wrote an article about the predictions for 2022. “There is one thing about Goldman Sachs that is always consistent; they are ‘bullish.’ Of course, given that the market is positive more often than negative, it ‘pays’ to be bullish when your company sells products to hungry investors. It is important to remember that Goldman Sachs was wrong when it was most important, particularly in 2000 and 2008. However, in keeping with its traditional bullishness, Goldman’s chief equity strategist David Kostin forecasted the S&P 500 will climb by 9% to 5100 at year-end 2022. As he notes, such will “reflect a prospective total return of 10% including dividends.” The problem, of course, is that the S&P 500 did NOT end the year at 5100.(Click on image to enlarge)Then, in 2022, Wall Street suggested that 2023 would be a meager return of just 3.9%.Of course, reality turned out to be markedly different.(Click on image to enlarge)It was the same in 2023 for 2024 as analysts wildly underestimated the valuation expansion, which sent the index up nearly 30% for the year.(Click on image to enlarge)However, while analysts repeatedly fail at the guessing game, Wall Street’s annual tradition is always of higher returns. To borrow a quote: “(Market) Predictions Are Difficult…Especially When They Are About The Future” […]

The Yen trims some losses following higher than expected inflation levels in Japan. The hot inflation figures have increased hopes of a BoJ hike in January. Technically, the pair is correcting lower, after having reached strongly overbought levels. The Yen is picking up from five-month lows on Friday, supported by a somewhat softer US Dollar and hot Japanese inflation figures. The Dollar has pulled back from levels right below 158.00 and is testing support at the previous  56.60 resistance area.Japanese data released on Thursday showed that inflation accelerated to a 2.9% yearly rate in November from 2.3% in October. Likewise, the core inflation increased 2.7% year-on-year, beating expectations of a 2.6% increment. These figures keep hopes of a January hike alive and provide some support to an ailing Yen. BoJ-Yen divergence has crushed the JPY The Bank of Japan kept rates unchanged on Thursday and conditioned a further rate hike to the evolution of next spring’s wage negotiations. Investors, who were expecting clearer signs of a January hike, were disappointed and the Yen tumbled against its main rivals.One day earlier, the  cut interest rates but signalled a slower easing path for next year. The hawkish stance sent the US Dollar and US Treasury yields surging. USD/JPY Technical analysis The  is correcting lower, after rallying about 2.6% earlier , reaching overbought levels on most timeframes.The broader trend, however, remains positive, with bears contained above the previous top, at 156.60 and the next support level at 155.85 ahead of 154.45. Resistances are 158.00 and 158.80. […]

Image Source:   November retail sales exceeded expectations as purchases continued to improve after a surprisingly weak September. Data indicates that private consumption, which hit a soft patch in 3Q24, improved again, remaining the main driver of economic growth in 2024. We see upside risk to our forecast of economic growth of 2.7% this year.Retail sales of goods jumped by 3.1% year-on-year, surpassing the market forecast of 1.2% and our forecast of 1.0% as well as the increase of 1.3% in October. Seasonally adjusted data points to 1.0% month-on-month growth following a 5.6% MoM expansion in the previous month. In annual terms, the highest rise was reported in the sales of motor vehicles (+28.1% YoY). Demand for cars was robust throughout 2024 but started gaining momentum in 4Q24 ahead of new, more restrictive European emission standards coming into force in 2025. Buoyant growth was also reported in the “other” sales category (+14.8YoY), pharmaceutical sales (+7.2%YoY) and fuel sales (+4.1% YoY). However, sharp declines were still seen in clothing and footwear (-14.7% YoY), which suggests that some households are still postponing less urgent purchases.Sales of motor vehicles gain momentum in late 2024Retail sales of goods (real), %YoYSource: GUS.Following a surprisingly weak September, and some recovery in October, sales continued to rebound and in seasonally adjusted terms were close to August’s level in November. The data indicates that private consumption has rebounded and should be stronger in 4Q24 after a disappointingly soft 3Q24 (+0.3% YoY). This is particularly important given the sluggish fixed investment […]