{"id":22492,"date":"2020-11-01T15:59:29","date_gmt":"2020-11-01T20:59:29","guid":{"rendered":"https:\/\/capital10x.com\/old\/?p=22492"},"modified":"2020-11-26T09:41:49","modified_gmt":"2020-11-26T14:41:49","slug":"markets-metals-navigator-november-1st-2020","status":"publish","type":"post","link":"https:\/\/capital10x.com\/old\/markets-metals-navigator-november-1st-2020\/","title":{"rendered":"Markets & Metals Navigator (November 1st, 2020)"},"content":{"rendered":"

Markets Get Skittish Ahead of U.S. Election, Bitcoin Keeps Trucking<\/h2>\n

U.S. stocks had their worst week since March, the market digested a spike in coronavirus cases, stimulus off the table and the potential of a contested election.<\/p>\n

The S&P 500 and Nasdaq fell 5.6% and -5.5% respectively; while Bitcoin kept its momentum after its massive run last week, rising 5% last week.<\/p>\n

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No sector was immune to the “risk-off” selloff; even the work-from-home darlings, Zoom (NASD:ZM) and Peloton (NASD:PTON), sold off significantly. Year-to-date Zoom and Peloton have been consistent outperformers when COVID cases spike, however this week was an abirritation to that trend.<\/p>\n

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Value have Never Been This Out of Favor: Mining Stocks are the Best Positioned Catch-Up Trade<\/h2>\n

The FT published an interesting historical chart going back to 1826 looking at the drawdown of value stocks relative to expensive stocks; we are currently in the midst of the worst draw in history with a cumulative loss of -65%.<\/p>\n

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As we highlighted in last week’s Navigator<\/a>, commodities are in deep value territory – we believe that metals are far better positioned than energy.<\/p>\n

The Canadian mining sector (TSX:XMA) has out performed the S&P 500 and the Canadian energy sector (TSX:XEG) by 20% and 77% respectively year-to-date.<\/p>\n

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There is much lost ground to be made up by commodities relative to the S&P 500 over the last decade.\u00a0 The Canadian materials sector is down 19% over the period, while the energy sector is down 77%.<\/p>\n

We view green metals as the sweet spot for the commodity upswing trade: copper, lithium, cobalt and vanadium.<\/p>\n

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Is Chinese Copper Stockpiling Setting the Market up for a Squeeze?<\/h2>\n