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Commentary,

An Economy Rebalanced: Q2 Top 10 Market Eliminations by the XOUT Strategy

While cutting losers has always been investing best practice, COVID19 lends a renewed imperative to this endeavor. The unpopular, yet unequivocal, reality is that not every company will survive this maelstrom—entire swaths of the economy will be subject to irretrievable impairment. This problem may the chief focus of the XOUT index, as owning potentially clear stock market losers is a luxury investors may no longer afford.

Commentary,

GraniteShares’ XOUT Named Best New Smart Beta ETF by ETF.com

GraniteShares ETFs is pleased to announce that its latest fund launch XOUT won the Best New Smart Beta ETF Award from ETF.com! We are thrilled to receive this distinguished industry recognition for XOUT, which flips the investment paradigm by seeking to exclude losers from the portfolio as opposed to trying to pick winners. Since XOUT launch 10/7/19 through 3/31/20, the XOUT Index outperformed the market by 5.1% by using this indexed methodology.

Commentary,

Hey Hey, Powell Jay, How Many Rates Did You Cut Today?

The hurricane cone of market uncertainty radically expanded from where it had stood only moments early at Tuesday 9:59 am, with the emergency cuts raising previous obscure possibilities to the forefront. Examining the fallout provides an empirical illustration of gold’s role in the portfolio during market stress, illuminating not only surprises but outright oddities emanating from the market tumult.

Commentary,

Your 60/40 May Be Broken: But Not for the Reasons You May Think…

The mathematical reality is that the venerable 60/40 was a sub-optimal investment in 2019—simply adding gold, and in any quantity, would have immediately improved portfolio efficiency. Even during a historic year for bonds, substituting gold for fixed income exposure in 2019, in any amount, automatically constructed a superior 60/40 portfolio. While sacrilegious to the extreme, these insights merely combine the 70 year old lessons of Modern Portfolio Theory with gold’s ability to buffet market volatility.

Commentary,

Commodities and Precious Metals Update (Week ending July 10, 2020)

A see-saw week for U.S. stock markets as investors struggled with optimism over economic recovery versus growing concerns over increasing Covid-19 cases. Coming off the July 4th holiday week, a surging Chinese stock market and stronger-than-expected PMI and ISM services index numbers, the S&P 500 Index increased 1.6% on Monday only to see most of those gains reversed on Tuesday after the Trump administration called for a much-smaller-than-talked-about additional stimulus package and U.S. Federal Reserve officials voiced concerns that a resurgence of coronavirus cases could derail economic recovery. The S&P 500 Index rose about 0.6% on Wednesday on no real news only to see those gains more than reversed on a larger-than-expected jobless claims report and continued concerns surrounding increasing Covid-19 cases. Data suggesting Gilead’s remdesivir may help reduce Covid-19 mortalities helped move the S&P 500 Index over 1% higher on Friday. At week’s end the S&P 500 Index increased 1.8% to close at 3,184.04, the Nasdaq Composite Index rose 4.0% to 10,617.44, the 10-year U.S. interest rate fell 3 bps to 64bps and the U.S. dollar (as measured by the U.S. Dollar index – DXY) weakened 0.7%.

Commentary,

Commodities and Precious Metals Update (Week ending July 2, 2020)

Monday’s and Tuesday’s much-stronger-than-expected pending home sales and consumer confidence numbers combined with Boeing’s successful 737 Max test flight propelled the S&P 500 and the Nasdaq Composite Index to their best quartly performance since 1998 and 2001, respectively. Better-than-expected PMI and ISM manufacturing index releases on Wednesday and a much-stronger than-expected payroll report on Thursday pushed U.S. stock markets higher the remainder of the holiday-shortened week, though gains were muted because of growing concerns surrounding increasing COVID-19 cases. At week’s end the S&P 500 Index increased 4.0% to 3,130.01, the Nasdaq Composite Index increased 4.6% to 10,207.63, the 10-year U.S. Treasury rate increased 2bps to 0.67% and the U.S. dollar (as measured by the DXY Index) weakened 0.4%.

Commentary,

Commodities and Precious Metals Update (Week ending June 26, 2020)

Better-than-expected economic reports and continued optimism regarding a V-shaped economic recovery pushed S&P 500 Index 1.1% higher through Tuesday and helped the Nasdaq Composite Index reach new record closing levels. Reports of increasing Covid-19 cases, Trump administration threats of EU import tariffs and the IMF’s updated and significantly lower global economic growth forecast calling for a contraction of nearly 5% caught the market’s attention on Wednesday pushing the S&P 500 Index down 2.6%. Though a portion of those losses were reversed on Thursday as banks stocks rallied on news bank regulators would be relaxing certain capital restrictions, record daily increases in Covid-19 cases and reports that Florida and Texas would be rolling back some easing measures on Friday increased concerns regarding the strength and speed of the recovery of US and global economies pushing the S&P 500 Index down another 2.4%. At week’s end the S&P 500 Index fell 2.9% to 3,009.05, the 10-year U.S. Treasury rate decreased 5bps to 0.65% and the U.S. dollar (as measured by the DXY Index) weakened slightly, falling 0.1%.

Commentary,

Commodities and Precious Metals Update (Week ending June 19, 2020)

Garnering support from the U.S. Federal Reserve Bank’s widening of its corporate buyback program to include individual bonds and much-stronger-than-expected retail sales and and industrial production reports, the S&P 500 increased almost 3% through Tuesday. Fed Chairman Jerome Powell’s testimony in front of the Senate and House on Tuesday and Wednesday imploring congress to continue its fiscal stimulus efforts as well as increased fears of a coronavirus second wave (exacerbated by the W.H.O’s proclamation that the coronavirus has entered a new and dangerous phase) pushed the S&P 500 lower the remainder of week. At week’s end the S&P 500 Index increased 1.9% to 3,097.74, the 10-year U.S. Treasury rate was unchanged at 0.70% and the U.S. dollar (as measured by the DXY Index) strengthened 0.3%.

Commentary,

Commodities and Precious Metals Update (Week ending June 12, 2020)

Momentum from the previous Friday’s much-stronger-than-expected employment report pushed the S&P 500 Index 1.2% higher on Monday and into the black for the year and moved the Nasdaq Composite Index to a record all-time high. Anxiety surrounding the 2-Day FOMC meeting moved U.S. stock markets lower on Tuesday and Fed Chairman Powell’s comments on Wednesday – voicing deep uncertainty about the strength and timing of the recovery of the U.S. economy – pushed the S&P 500 Index off its Monday’s highs to unchanged for the week. U.S. stock markets plummeted Thursday on continued follow through from Powell’s comments as well as increased concerns of a coronavirus second wave only to see some of those losses recouped on Friday on no real news. 10-year Treasury rates steadily moved lower last week, fading with increased concerns of the timing and strength of economic recovery in the U.S. At week’s end the S&P 500 Index fell 4.8% to 3,041.31, the 10-year U.S. Treasury rate decreased 20bps to 0.70% and the U.S. dollar (as measured by the DXY Index) strengthened 0.2%.

Commentary,

Commodities and Precious Metals Update (Week ending June 5, 2020)

Overcoming concerns brought about by violent protests, fears of a second coronovirus wave and increasing U.S.-China tensions, U.S. stock markets marched higher last week, only pausing momentarily on Thursday, supported by growing optimism of a faster-than-expected economic recovery due to easing lockdown restrictions at home and abroad. An unexpected 2.5 million increase in non-farm payrolls (expectations were for a loss of about 8 million jobs) was the proverbial icing on the cake, pushing U.S. stock markets 2%-3% higher on Friday. Throughout the week the 10-year U.S. Treasury rate climbed higher as well, moving with increasing expectations of stronger, faster U.S. economic growth while the U.S. dollar weakened significantly mainly as result of lessening coronavirus concerns decreasing demand for U.S. dollars. At week’s end the S&P 500 Index increased 4.9% to 3,193.93, the 10-year U.S. Treasury rate rose 24bps to 0.90% and the U.S. dollar (as measured by the DXY Index) weakened 1.4%.

Commentary,

Commodities and Precious Metals Update (Week ending May 29, 2020)

Buoyed by increasing hopes regarding a coronavirus vaccine and increasing expectations of economic recovery spurred by easing lockdown restrictions, the S&P 500 Index increased 2.7% through Wednesday. Concerns surrounding U.S.-China tensions, inflamed by China’s Hong Kong security restrictions, pushed the S&P 500 Index off Wednesday’s high on Thursday only to see those losses recouped on Friday after President Trump’s announcement of measures against China were less harsh and encompassing than originally feared. Markets all but ignored weak economic reports last week, including an almost 14% decline in consumer spending reported Friday, with investors focusing instead on increased hopes and expectations of economic recovery. Jerome Powell, speaking Friday, said the fundamentals of the U.S. economy remain strong but with the coronavirus posing risks to growth and said the U.S. Federal Reserve Bank continues to use its tools to support the economy. At week’s end the S&P 500 Index increased 3.0% to 3,044.31, the 10-year U.S. Treasury rate was unchanged at 0.66% and the U.S. dollar (as measured by the DXY Index) weakened 1.6%.

Commentary,

GraniteShares Surpasses $1 Billion in AUM Amid Market Uncertainty

GraniteShares, a new kind of exchange-traded fund (ETF) company, has accumulated over $1 billion in assets under management (AUM) in just three years. GraniteShares’ recent growth has been fueled by its flagship gold ETF, BAR, which has swelled to over $917 million in AUM as investors seek safe-haven assets amid coronavirus-inflicted market volatility.

Commentary,

Commodities and Precious Metals Update (Week ending May 22, 2020)

Up over 3% Monday on positive news regarding Moderna’s development of a coronavirus vaccine, the S&P 500 Index zigzagged the rest of the week finishing very close to Monday’s level. Initial optimism over Moderna’s progress was partially offset by doubts and questions over the value of the initial results on Tuesday, pushing the S%P 500 Index about 1% lower on the day. Continued easing of restrictions throughout the U.S. with increasing expectations of stronger economic growth moved the S&P 500 Index higher by almost 2% on Wednesday only to see some of those gains reversed on Thursday with the weekly jobless claims report showing initial claims of 2.4 million. The S&P 500 Index closed the week up 3.2% at 2,955.46, the 10-year U.S. Treasury rate rose 1bp to 0.66% and the U.S. dollar (as measured by the DXY Index) gave up last weeks gains, weakening 0.6%.

Commentary,

Commodities and Precious Metals Update (Week ending May 15, 2020)

U.S. Federal Reserve Bank Chairman Powell’s “highly uncertain” economic outlook comments, larger-than-expected declines in both CPI and PPI and emerging concerns regarding reopening “too soon” pushed the S&P 500 Index almost 4% lower through Wednesday. Despite worse-than-expected jobless claims and a record decline in retail sales and industrial production, stronger-than-expected financial sector earnings reports helped moved the S&P 500 Index off its lows on Thursday and Friday. At week’s end the S&P 500 Index fell 2.3% to 2,853.70, the 10-year U.S. Treasury rate fell 4bps to 0.65% and the U.S. dollar (as measured by the DXY Index) strengthened 0.6%.