{"id":22375,"date":"2020-10-18T20:53:32","date_gmt":"2020-10-19T00:53:32","guid":{"rendered":"https:\/\/capital10x.com\/old\/?p=22375"},"modified":"2020-11-26T09:42:12","modified_gmt":"2020-11-26T14:42:12","slug":"markets-metals-navigator-october-18th-2020","status":"publish","type":"post","link":"https:\/\/capital10x.com\/old\/markets-metals-navigator-october-18th-2020\/","title":{"rendered":"Markets &#038; Metals Navigator (October 18th, 2020)"},"content":{"rendered":"<h2>COVID-19 Vaccine Setback and a Surge in Cases Lifts Tech Stocks<\/h2>\n<p>The Nasdaq has kept charging along this week driven by &#8216;work from home&#8217; thematic, the index finished up 3% for the week, while the S&amp;P 500 was flat.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22376\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_chart.png\" alt=\"\" width=\"2000\" height=\"1349\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_chart.png 1518w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_chart-300x202.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_chart-1024x691.png 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_chart-768x518.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_chart-1536x1036.png 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_chart-696x469.png 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_chart-1392x939.png 1392w\" sizes=\"auto, (max-width: 2000px) 100vw, 2000px\" \/><\/p>\n<p>The bellwether for &#8216;work from home&#8217;, Zoom Communications (NASD:ZM), was up 13.5% last week and is up a monstrous 721% year-to-date. Zoom&#8217;s forward price-to-sales ratio currently stands at 66x, nearly ten-fold higher than the Nasdaq at 7.6x.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22377\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_ZM_CRWD_PTON_CLOU_chart.png\" alt=\"\" width=\"2000\" height=\"1269\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_ZM_CRWD_PTON_CLOU_chart.png 1614w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_ZM_CRWD_PTON_CLOU_chart-300x190.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_ZM_CRWD_PTON_CLOU_chart-1024x650.png 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_ZM_CRWD_PTON_CLOU_chart-768x487.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_ZM_CRWD_PTON_CLOU_chart-1536x975.png 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_ZM_CRWD_PTON_CLOU_chart-696x442.png 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/^SPX_NDAQ_GLD_SLV_ZM_CRWD_PTON_CLOU_chart-1392x883.png 1392w\" sizes=\"auto, (max-width: 2000px) 100vw, 2000px\" \/><\/p>\n<p>The &#8216;work from home&#8217; investment thematic performance has been highly correlated with coronavirus cases. We&#8217;re currently seeing a second wave of infections in North America and Europe (see chart below).<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22378\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/infection-rates.jpg\" alt=\"\" width=\"1296\" height=\"786\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/infection-rates.jpg 1296w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/infection-rates-300x182.jpg 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/infection-rates-1024x621.jpg 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/infection-rates-768x466.jpg 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/infection-rates-696x422.jpg 696w\" sizes=\"auto, (max-width: 1296px) 100vw, 1296px\" \/><\/p>\n<p>Adding to negative coronavirus sentiment, <a href=\"https:\/\/capital10x.com\/old\/johnson-johnson-pushes-the-pause-button-on-its-covid-19-clinical-trial\/\">Johnson &amp; Johnson pushed the pause button on its COVID-19<\/a> clinical trials last week.<\/p>\n<p>This backdrop is very favorable for the telehealth and COVID-19 testing sectors. We&#8217;ll be highlighting stock specific opportunities in the coming week.<\/p>\n<h2>Everybody Wants a Piece of the Free Money<\/h2>\n<p>One of the most fascinating charts we came across this week is the parabolic spike in American business applications.<\/p>\n<p>What this indicates is that many individuals created businesses in the U.S. so that they can apply for Paycheck Protection Program (PPP) Loans from the government, which are forgivable.<\/p>\n<p>This type of activity presents a strong tailwind for inflation.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22379\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/small-business-formation.jpg\" alt=\"\" width=\"923\" height=\"501\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/small-business-formation.jpg 923w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/small-business-formation-300x163.jpg 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/small-business-formation-768x417.jpg 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/small-business-formation-696x378.jpg 696w\" sizes=\"auto, (max-width: 923px) 100vw, 923px\" \/><\/p>\n<h2>Sierra Metals: Record Quarterly Production with a Ramp Up to Full Capacity<\/h2>\n<p>Sierra Metals (NYSE:SMTS, TSX:SMT) <a href=\"https:\/\/capital10x.com\/old\/sierra-metals-smts-q3-2020-production-results\/\">delivered stellar Q3 2020 production results<\/a> as the company ramps up to full capacity.<\/p>\n<p>Despite the challenging operational backdrop of 2020 with the headwinds of COVID-19, Sierra Metals was able to quickly restart operations and deliver record quarterly production of 35.2 million pounds of copper equivalent production \u2013 an increase of +9% year-over-year.<\/p>\n<p>The company continues to ramp up operations to full capacity during a period of structurally strong commodity pricing due to record government money printing.<\/p>\n<p>We believe there are very few companies that offer this level of production growth with a quality underlying asset mix.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22363\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/sierra-earnings-Q3-2020-1.png\" alt=\"\" width=\"800\" height=\"1137\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/sierra-earnings-Q3-2020-1.png 800w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/sierra-earnings-Q3-2020-1-211x300.png 211w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/sierra-earnings-Q3-2020-1-720x1024.png 720w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/sierra-earnings-Q3-2020-1-768x1092.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/sierra-earnings-Q3-2020-1-696x989.png 696w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><\/p>\n<h2>Commodities Offer Safety in a World Awash with Negative Yielding Debt<\/h2>\n<p>The world\u2019s stockpile of negative-yielding debt has soared to over $16 trillion, just $800 billion shy of its all-time high.<\/p>\n<p>The higher this stockpile climbs the greater the risk of hyper inflation; hard commodities like gold, silver, copper and environmental industrial metals provide a tangible safe haven for investors.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22382\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/negative-yielding-debt.jpg\" alt=\"\" width=\"2324\" height=\"1320\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/negative-yielding-debt.jpg 1803w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/negative-yielding-debt-300x170.jpg 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/negative-yielding-debt-1024x582.jpg 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/negative-yielding-debt-768x436.jpg 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/negative-yielding-debt-1536x872.jpg 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/negative-yielding-debt-2048x1163.jpg 2048w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/negative-yielding-debt-696x395.jpg 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/negative-yielding-debt-1392x791.jpg 1392w\" sizes=\"auto, (max-width: 2324px) 100vw, 2324px\" \/><\/p>\n<h2>The Gold Bar Can&#8217;t Pay You Dividends, Gold Equities Can!<\/h2>\n<p>Kirkland Lake <a href=\"https:\/\/capital10x.com\/old\/kirkland-lake-q3-2020-production\/\">announced solid Q3 operational results<\/a>, however it was the dividend increase that got the attention of investors.<\/p>\n<p>The company increased the quarterly dividend by 50%, from $0.125\/share to $0.1875\/share.\u00a0 This increase follows a doubling of the dividend in Q1 2020, see KL\u2019s quarterly dividend history in the chart below.<\/p>\n<p>Gold companies returning capital to shareholder is one of the greatest sweeteners management teams can offer investors vs. their primary competitor &#8211; the gold bar, which carries no yield.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22329\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/KL_chart.png\" alt=\"\" width=\"1755\" height=\"1024\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/KL_chart.png 1755w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/KL_chart-300x175.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/KL_chart-1024x598.png 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/KL_chart-768x448.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/KL_chart-1536x896.png 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/KL_chart-696x406.png 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/KL_chart-1392x812.png 1392w\" sizes=\"auto, (max-width: 1755px) 100vw, 1755px\" \/><\/p>\n<h2>U.S. Pot Stocks are Beginning to Price in a Biden Victory, Is there Still Room to Move Higher?<\/h2>\n<div style=\"width: 696px;\" class=\"wp-video\"><video class=\"wp-video-shortcode\" id=\"video-22375-1\" width=\"696\" height=\"392\" poster=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/2020-10-15-Cannabis-Twitter-feature.jpg\" preload=\"metadata\" controls=\"controls\"><source type=\"video\/mp4\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/2020-10-15-Cannabis-Twitter-1.mp4?_=1\" \/><a href=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/2020-10-15-Cannabis-Twitter-1.mp4\">https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/2020-10-15-Cannabis-Twitter-1.mp4<\/a><\/video><\/div>\n<p>Over the last month U.S. cannabis stocks have tripled the return of the S&amp;P 500 as they begin to price in the likelihood of a Biden victory.<\/p>\n<p>We ask the question, Is there a margin of safety for U.S. cannabis stocks if there&#8217;s a surprise Biden loss?<\/p>\n<p>We believe the answer is yes, for two key reasons:<\/p>\n<ol>\n<li>U.S. cannabis stocks have revenue growth in-line or better than the high flying cloud technology stocks.<\/li>\n<\/ol>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22356\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-YoY.png\" alt=\"\" width=\"800\" height=\"370\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-YoY.png 800w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-YoY-300x139.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-YoY-768x355.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-YoY-696x322.png 696w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><\/p>\n<p>2. Valuations are much lower for U.S. cannabis stocks versus the high growth tech stocks.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22355\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-P-S.png\" alt=\"\" width=\"800\" height=\"370\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-P-S.png 800w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-P-S-300x139.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-P-S-768x355.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/10\/tech-vs-cannabis-P-S-696x322.png 696w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A weekly review of the most important news impacting the metals and global stock markets. This week: COVID-19 lifts Tech, Sierra Metals, Negative Yielding Debt, U.S. Cannabis Stocks.<\/p>\n","protected":false},"author":7,"featured_media":15918,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1755,59],"tags":[76,104,1598,272,1726,846,848,1267,1727],"class_list":{"0":"post-22375","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-growth_navigator","8":"category-metals","9":"tag-copper","10":"tag-gold","11":"tag-kirkland-lake","12":"tag-kl","13":"tag-negative-yields","14":"tag-sierra-metals","15":"tag-silver","16":"tag-smts","17":"tag-us-cannabis-stocks"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Markets &amp; Metals Navigator (October 18th, 2020) | Capital 10X<\/title>\n<meta name=\"description\" content=\"A weekly review of the most important news impacting the metals and global stock markets. 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