{"id":22181,"date":"2020-08-30T15:55:27","date_gmt":"2020-08-30T19:55:27","guid":{"rendered":"https:\/\/capital10x.com\/old\/?p=22181"},"modified":"2020-11-26T09:43:27","modified_gmt":"2020-11-26T14:43:27","slug":"markets-and-metals-navigator-august-30th-2020","status":"publish","type":"post","link":"https:\/\/capital10x.com\/old\/markets-and-metals-navigator-august-30th-2020\/","title":{"rendered":"Markets and Metals Navigator (August 30th, 2020)"},"content":{"rendered":"

Stocks and Commodities Stay Well Bid!<\/h2>\n

Another strong week in the markets; with the S&P 500, Nasdaq, gold, silver and copper all posting strong gains. Investors are being pushed further and further out the risk curve, growth and preservation of value are paramount.<\/p>\n

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Real yields continue to be the main driver of returns in the stocks and commodities, this graph beautifully illustrates the relationship between U.S. 10-year real yields and the S&P 500.<\/p>\n

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The U.S. Federal Reserve Not Bothered About Inflation (Investors Should Be!)<\/h2>\n

At a speech in Jackson Hole this week, Federal Reserve Chair Jerome Powell stated the Fed would tolerate inflation above 2%, a new approach to setting U.S. monetary policy.<\/p>\n

This will ultimately keeping interest rates low for years to come, which will suppress real yields – a very accommodating environment for commodity pricing.<\/p>\n

We believe investors are just beginning to appreciate the fat tail risk of heightened inflation as a result of the Federal Reserve’s very accommodative monetary policy.<\/p>\n

An inflation protection basket (gold, silver & copper) is one of the tangible ways to protect against this inflation risk, we view the mining companies in each category as attractively valued in this inflationary backdrop.<\/p>\n

Ohio Police & Fire Pension Fund approves 5% Allocation in Gold<\/h2>\n

As reported in ZeroHedge<\/a>, the $16 billion Ohio Police & Fire Pension Fund has approved a 5% allocation to gold to “hedge against the risk of inflation”.<\/p>\n

Developed market pension funds are structurally underweight gold, in most instances the weighting in gold is zero.\u00a0 We believe that the Ohio Police & Fire Pension Fund and Berkshire Hathaway’s recent investments in gold are the beginning of an institutional sea change in asset allocation.<\/p>\n

We believe all inflation hedged assets and companies that mine those assets, namely: gold, silver and copper, will continue to gain significant incremental interest from large pension & endowment funds.\u00a0 A very bullish backdrop.<\/p>\n

U.K. Psychedelic Startup Compass Pathways to IPO on the Nasdaq<\/h2>\n

Compass Pathways is one of the most anticipated psychedelic companies to come to market, backed by tech billionaire Peter Thiel.\u00a0 The company is seeking to raise $100 million and will list on the Nasdaq under the symbol CMPS.<\/p>\n

Over the last 6 months the Canadian market has been saturated with a slew of very flimsy psychedelic companies coming to market with questionable business models and bloated share structures.\u00a0 \u00a0Compass Pathways offers investors the first glimpse at a company that has been well capitalized for years – a stark difference versus it’s Canadian listed peers.<\/p>\n

All Eyes on the US Cannabis ETF<\/h2>\n

As discussed in last week’s navigator, there is considerable interest in AdvisorShares listing of the first US ETF with dedicated exposure to the US cannabis market – ticker MSOS. We’re likely to see the ETF trading on September 2nd.<\/p>\n

As we’ve correctly highlighted in our August 2nd edition of the Navigator<\/a> – U.S. cannabis stocks have broken out!\u00a0 We’ve witnessed another strong week of performance, Trulieve and Curaleaf were up 11% and 9% respectively.\u00a0 Canadian peers continue to be lagging, with Canopy and Aurora up 5% and 4% respectively.<\/p>\n

We continue to view the U.S. landscape as structurally more attractive than Canada, the US ETF could be a very strong catalyst for continued outperformance.<\/p>\n

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The Jamaican Central Bank Gets It!<\/h2>\n

We’ll leave you on a high note, there is no other central bank in the world that can come close to Jamaica in terms of communication!<\/p>\n

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**Drumroll**
Ladies and Gentlemen; Kings and Queens… Presenting…the WORLD PREMIERE…of BOJ's long-awaited inflation-targeting dubplate for 2020, featuring Denyque and the low, stable and predictable inflation dancers! \ud83d\udd25 \ud83c\udf99\ufe0f \ud83e\udd41 \ud83c\udfb8 \ud83c\udfbc#BOJSpeaks<\/a>#InflationTargeting<\/a> pic.twitter.com\/7OMb4wEFsQ<\/a><\/p>\n

— Bank of Jamaica (@CentralBankJA) August 27, 2020<\/a><\/p><\/blockquote>\n