InvestMacro

The Energy Report

Source: Streetwise Reports   07/07/2020

Sunrun Inc. shares traded 25% higher and reached a new 52-week high after the company reported that it has signed a definitive agreement to acquire Vivint Solar in an all-stock merger deal.

Residential solar, battery storage and energy services company Sunrun Inc. (RUN:NASDAQ) and full-service residential solar provider a Vivint Solar Inc. (VSLR:NYSE) yesterday evening announced that “the companies have entered into a definitive agreement under which Sunrun will acquire Vivint Solar in an all-stock transaction, pursuant to which each share of Vivint Solar common stock will be exchanged for 0.55 shares of Sunrun common stock, representing a combined Enterprise Value of $9.2 billion based on the closing price of Sunrun’s shares on July 6, 2020.”

The firms stated that after the transaction is completed, Vivint Solar and Sunrun shareholders will own approximately 36% and 64% respectively of the fully diluted shares of the combined company. The report pointed out that “the exchange ratio implies a 10% premium for Vivint Solar shares based on closing prices on July 6, 2020, and a 15% premium to the exchange ratio implied by the three month volume weighted average price of Vivint Solar and Sunrun shares.”

Sunrun’s CEO and co-founder Lynn Jurich commented, “Americans want clean and resilient energy. Vivint Solar adds an important and high-quality sales channel that enables our combined company to reach more households and raise awareness about the benefits of home solar and batteries…This transaction will increase our scale and grow our energy services network to help replace centralized, polluting power plants and accelerate the transition to a 100% clean energy future. We admire Vivint Solar and its employees, and look forward to working together as we integrate the two companies.”

Vivint Solar’s CEO David Bywater remarked, “Vivint Solar and Sunrun have long shared a common goal of bringing clean, affordable, resilient energy to homeowners. Joining forces with Sunrun will allow us to reach a broader set of customers and accelerate the pace of clean energy adoption and grid modernization. We believe this transaction will create value for our customers, our shareholders, and our partners.”

After the merger is finalized, the combined entity will have a combined customer base of around 500,000 customers with over 3 gigawatts of solar assets on the balance sheet. The companies stated that residential solar has reached only about 3% penetration in the U.S. so the opportunity for future growth is still quite large. Sunrun also expects to benefit from significant cost synergies from the merger, which it estimates to total $90 million annually.

Under the terms of the definitive transaction agreement, each share of Vivint Solar common stock issued and outstanding immediately prior to the effective time of the merger will be converted automatically into the right to receive 0.55 shares of Sunrun common stock.

The report indicated that the Vivint acquisition by Solar has already been unanimously approved by the boards of directors of both companies and is expected to be completed during Q4/20 subject to subject to approval by Vivint Solar and Sunrun stockholders, regulatory approvals and other customary closing conditions.

Sunrun is headquartered in San Francisco and states that its Brightbox home battery solution offers affordable and reliable energy and that it has the capability to manage and share stored solar energy from the batteries providing benefits to households, utilities and the electric grid.

Vivint Solar is a full-service residential solar provider based in Lehi, Utah. The company designs, installs and finances solar energy systems for homeowners and offers related monitoring and maintenance services. In addition, the firm indicated that it offers solar plus storage systems with LG Chem home batteries and electric vehicle chargers with ChargePoint Home.

Sunrun began the day with a market capitalization of around $2.6 billion with approximately 120.3 million shares outstanding and a short interest of about 15.2%. RUN shares opened 12% higher today at $23.95 (+$2.61, +12.23%) over yesterday’s $21.34 closing price and reached a new 52-week high price this morning of $27.59. The stock has traded today between $23.46 to $27.59 per share and is currently trading at $26.80 (+$5.46, +25.68%).

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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: RUN:NASDAQ,
)

By The Gold Report

Source: Bob Moriarty for Streetwise Reports   07/07/2020

Bob Moriarty of 321gold explains why he has invested in this company.

In the past few weeks the resource markets have begun to show investors what they can expect when the market understands the meaning of the hyperinflation headed our way. While I believe the DSI and rampant speculation are giving a signal for a correction soon, I can’t predict if it will be a small burp or a serious drop.

I can predict the general market led by the Nasdaq. Think of a falling safe. The overall markets are more insane than I have ever seen or read of.

The US has painted itself into a corner by overstating the virus cases by hundreds of percent. Now Europe has put the EU off limits to incoming Americans. Welcome to the new world brought to you by the gang of fools.

It simply is not possible for a country with 5% of the world’s population to have 25% of the world’s virus cases. The CDC even admits the tests will show positive for any flu or prior cold. How wonderful. Now the government is lying about absolutely everything.

Investors are starting to understand the real meaning of pouring stacks of hundred dollars bills onto a bonfire. While the thought of free money certainly dances through our heads like that of the sugar plum fairy through the mind of a five year old, there is no free lunch. The money came from somewhere and has to be paid back either through taxes, default or good old fashioned hyperinflation.

I’m in the hyperinflation camp. That is more a function of citizens losing faith in their government than a purely monetary event. I don’t care if you are a die hard Red or a die hard Blue, it should be clear to anyone with eyes and at least half a brain that the US is led by a gang of fools. While I am deeply offended by the constant “ME, ME, ME, ME” coming from the president as he practices his opera notes, when I watch the presumed Democratic candidate, Joe Biden announce, “I am going to defeat Joe Biden” I feel certain he is 100% correct.

Sigh!!

Own some gold and silver and maybe a resource company or two. You can’t print gold and there is no counter-party risk.

Three weeks ago the IR guy for West Red Lake Gold Mines Inc. (RLG:CSE; RLGMF:OTCBB) contacted me and pitched me on the company. It was compelling. They are a 62% owner of a joint venture in the Red Lake District with significant drill results. My comment to the West Red Lake guy was that they needed to start telling their story. With intercepts last year of 14.18 g/t Au over 7.8 meters and 12.14 g/t Au over 13.5 meters and others almost as nice, their biggest problem was visibility.

I also was convinced enough that they had a good story that I went out and bought some shares at $0.08 a month ago. The price of the shares went up and down as lots of companies do but volume increased. Then the shares doubled in the last eight days. I realized then that I was a genius. Actually a lot of other stocks have woken up in the last month and doubled so maybe I’m not that big a genius.

Investors should look at the presentation. At blocks greater than a 1-gram cutoff, the actually inferred resource is 1.352 million ounces at an average grade of 4.48 grams. RLG would own 62% of that or 838,000 ounces. The outstanding drill results from last year in the NT Zone are not figured into the 43-101 so West Red Lake is sitting on more gold than the numbers show.

West Red Lake recently completed a private placement and has just started a planned 3000-meter drill program for this year. The NT Zone is the primary focus. There will be a flow of news starting in about six weeks and continuing for months.

West Red Lake Gold has about 20 million warrants expiring over time exercisable at $0.10. With the shares solidly in the money people selling shares to exercise warrants will both provide great liquidity and $2 million in cash for more follow up exploration.

RLG isn’t as good a deal as it was a couple of weeks ago but probably it’s a lot better deal than what prices will be when hyperinflation hits. This is a time to get prepared for the disaster we know is coming.

To the extent that everyone that owns shares is somewhat biased, I am biased so you should do your own due diligence. West Red Lake Gold is an advertiser. Do your own due diligence

West Red Lake Gold Mines
RLG-C $0.17 (Jul 07, 2020)
RLGMF OTCBB 163.8 million shares
West Red Lake website

Bob Moriarty
President: 321gold
Archives
321gold

Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.

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Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: West Red Lake Gold Mines. West Red Lake Gold Mines is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: RLG:CSE,
)

The Energy Report

Source: Streetwise Reports   07/07/2020

The investment thesis for Ørsted A/S is presented in a Pareto Securities report.

In a July 2 research note, analyst Tom Erik Kristiansen reported that Pareto Securities initiated coverage on Ørsted A/S (ORSTED:NDAQ; DNNGY:OTCMKTS), “the world’s largest offshore wind operator” with a Buy rating and a DKK900 per share target price. Ørsted’s current share price is DKK803 in comparison.

Kristiansen made a case for why this Denmark-headquartered firm makes for a solid investment.

One, the renewable energy firm, which develops, constructs, owns and operates offshore wind farms, leads the industry. With its 24 producing assets and an existing pipeline, it holds 30% of the market share.

Ørsted is on track to grow 15% per year, to 15 gigawatts (15 GW) by 2025, and is ahead of schedule in that regard. Already, the company met its 15 GW by 2025 offshore goal but is about 3 GW shy of reaching its 5 GW onshore target.

Expected growth “is expected to be highly profitable” and the outlook “warrants higher pricing” for Ørsted, Kristiansen purported. The company guided to a 10% return on capital employed between 2019 and 2025 and 80%-plus of EBITDA between 2020 and 2040.

Further, those projections are protected by “fixed price contracts with government in developed markets or large corporations as counterparties,” which alone can support the current share price over time, noted Kristiansen and speaks to Ørsted’s compelling business model.

Also positive for the company, Kristiansen pointed out, is that the offshore wind market is expected to grow this decade at a compound annual growth rate of about 20%. Even with increased competition and saturation of certain markets in the future, Ørsted should realize additional value because of its strong development track record and experience.

Pareto estimates that each gigawatt that Ørsted adds will increase its valuation by more than DKK15 per share and that valuation could reach DK1000 per share over the next couple of years. As for 2021, it is forecast to be “a massive year for tender activity,” added Kristiansen.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: ORSTED:NDAQ; DNNGY:OTCMKTS,
)

By The Gold Report

Source: Streetwise Reports   07/07/2020

A Haywood Securities report notes the moves by GoldMining “demonstrates an intention to seek to unlock further value from GOLD’s unique portfolio.”

In a June 24 research note, Haywood Securities analyst Colin Healey reported that GoldMining Inc. (GOLD:TSX; GLDLF:OTCQX) will create net smelter returns royalties (NSRs) between 0.5% and 2% on 14 of its gold projects and hold them in its newly formed, wholly owned subsidiary, Gold Royalty Co.

“GoldMining is taking the first step in positioning its portfolio for increased visibility to investors of royalty streaming companies which tend to trade at a substantial premiums to the respective net asset values [average of 1.7x net asset value),” Healey commented.

Now, existing and investors can get exposure to the new company, which should generate demand for the stock and, thus, put positive price pressure on it. Haywood recommends buying GoldMining to “take advantage of the unwarranted market discount and new catalyst.”

As for a breakdown of the 14 NSRs, there are two at 2%, 11 at 1% and one at 0.5%. They all are on projects at various stages, most with an established contemporary resource but no economic study. Defined gold resources of all of the projects amount to about 25.2 million ounces.

“Establishing the NSRs upfront, prior to negotiating any specific transaction on a specific asset, allows GoldMining to set the baseline for basis and unified terms of the NSRs,” Healey highlighted.

The Vancouver-based junior resource firm also benefits from keeping the royalties in a wholly owned subsidiary, according to Healey. One, it creates a future catalyst in the form of a spin out of Gold Royalty Co. Two, GoldMining maintains control in the event of negotiations with another entity interested in acquiring one or more of its assets. Three, the company continues to have exposure to future discoveries and resource growth at its projects.

Haywood has a Buy rating and a CA$4.25 per share target price on GoldMining, a high bar Healey noted because his firm believes that “management could execute and unlock additional value in the stock.” Haywood considers the GoldMining team, with its creativity and capital markets experience, to be one of GoldMining’s “core strengths.”

“We think this move demonstrates an intention to seek to unlock further value from GOLD’s unique portfolio and investors will be rewarded in a flat or rising gold price environment,” the analyst concluded.

GoldMining’s shares are trading today at about CA$1.68 each.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: GoldMining Inc. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Haywood Securities, GoldMining Inc, June 24, 2020

Analyst Certification: I, Colin Healey, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures

The following Important Disclosures apply for GoldMining Inc.: N/A

Research policy available here.

( Companies Mentioned: GOLD:TSX; GLDLF:OTCQX,
)

By Lukman Otunuga, Research Analyst, ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By IFCMarkets

US dollar bearish bets declined to $13.89 billion from $16.93 against the major currencies during the one week period, according to the report of the Commodity Futures Trading Commission (CFTC) covering data up to June 30 and released on Monday July 6. The change in net short dollar bets was mainly the result of significant increase in Pound bearish bets and decrease in bullish bets on yen and euro as German import prices recovery was slower than anticipated in May. The Pound, Canadian and Australian dollars maintained net short positions against the dollar. The bearish dollar bets fell as US Census Bureau reported durable goods orders rose above expected 15.8% over month in May and consumer spending climbed to a record 8.2% after tumbling in April. Chicago Fed President Charles Evans’ comment the US economy may require more monetary stimulus didn’t result in increase in dollar bearish bets.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

By CentralBankNews.info

The central bank of Mauritius left its benchmark interest rate steady, saying the two rate cuts earlier this year are still working their way through the economy, which is expected to shrink 12.5 percent this year, and the current monetary policy stance is deemed appropriate.
The Bank of Mauritius (BOM) left its key repo rate (KRR) at 1.85 percent after cutting it by a total of 150 basis points following cuts in March and April.
The Indian Ocean island has been hit hard by the plunge in global tourism since the outbreak of the Covid-19 pandemic, along with its export-reliant manufacturing industry, and the central bank expects household consumption and private investment to remain subdued this year.
“The global economic landscape remains fraught with uncertainty as countries continue to experience the adverse affects of the COVID-19 pandemic,” BOM said.
The central bank forecast the island’s economy will contract by 12.5 percent this year and then rebound and expand  some 7.0 percent in 2021.
In late May the bank’s governor, Harvesh Seegolam, who took over in late February, said he expected the economy to contract between 7.5 percent and 15 percent this year, revising down the bank’s March forecast for growth of 2.6 percent to 2.8 percent.
In the first quarter of this year, Mauritius’ gross domestic product contracted 2.0 percent year-on-year and 3.6 percent quarter-on-quarter.
Inflation in June eased to 1.7 percent from 2.8 percent in May and BOM forecast inflation of around 2.5 percent this year and about 2.0 percent in 2021, barring exogenous shocks.
After falling in March, the Mauritian rupee has been relatively stable since mid-April and was trading around 40 to the U.S. dollar today, down 9 percent this year.

The Bank of Mauritius issued the following statement:

By ForexNewsNow

Financial markets in the post-Soviet space improved drastically. With the development of technology and the Internet, a lot of people started trading various instruments from stocks to crypto. Actually the former is considered to be the most popular instrument in most of those countries, but gold and crypto are also rampant. In this article, we will talk about them.

Crypto

Estonia, as well as Russia, are at the forefront of crypto innovations in the post-Soviet space. Also, Belarus became the first country in the space to launch a cryptocurrency exchange.

The exchange accepts Bitcoin and Ethereum, as well as fiat money and a lot of people started trading.

Tokenized assets for raw materials, stocks, indices linked to the base market value of traditional financial assets are also traded on the exchange. It is possible to make money using Visa and Mastercard bank cards issued by any banks, including foreign ones.

Crypto is a very popular instrument in Russia and Estonia as well. As trading is evolving gradually, people use Bitcoin and Ethereum for the most part to earn some money. Other countries are still emerging, however, crypto has not gained a foothold there yet.

Stocks

Stocks have become a very popular option among post-Soviet citizens. The trend is very visible in Russia and Ukraine, but interestingly Georgia has turned a country in recent years, where investors and people turn to stock trading. When an ordinary citizen wants to get information on how to buy stocks in Georgia the material is available on various websites on national banks. Because of this, many found the material useful, thus it became a driver to start trading stocks, which in general was not characteristic until 2010.

The choice in favor of trading stocks on the stock exchange in post-Soviet countries is due to several reasons. In part, they are psychological, as they provide the investor with tangible guarantees of return on investment. But there are objective factors. For example, all securities have liquidity due to material wealth: real estate of the enterprise, its raw materials and inventories.

The following is also attractive: The stock price does not depend directly on the value of currencies, raw materials (trading due to the lack of correlation is less dependent on interventions on currency pairs). Also, a crisis in a country or in a global market may not affect individual companies. Furthermore, investments in the assets of large companies are easier to predict than changes in the cryptocurrency market, precious metals.

Gold

And we have come to the final instrument, which is gold. Residents from post-Soviet countries pay particular attention to gold trading in financial markets. However, it could be regarded as the most complicated form of trading.

Gold trading on Forex and in the post-Soviet space is highly complex because accurate information on this market is practically not publicly available – no one can say how much gold is on the gold market, where it is located, how much is offered for sale, etc. In trading this instrument, traders rely on a number of indirect factors that accurately affect the market for this asset.

First, gold is considered a safe asset and this determines the demand for it. In times of crisis or in times of uncertainty in markets, demand for gold is growing – it is considered a safe haven for cash, which will at least preserve, and at a maximum, increase capital after the situation stabilizes.

Citizens from the post-Soviet know a very simple concept. The traditional rule that is followed in the gold trade is that, in unfavourable periods for the economy, the demand for gold grows, and in an atmosphere of dynamic growth, interest in gold decreases, since there are more opportunities to invest profitably.

Another rule of thumb is that gold can protect against inflation, which is why precious metals are also in high demand in the period of high values. This rule implies the importance of monitoring the policies of central banks – the super-soft monetary policy raises inflationary expectations in the market, which means it can serve as an indicator for timely investments in gold.

Finally, the dynamics of the US dollar is in itself considered an indicator of demand for gold – the dollar exchange rate and the price of this metal, as a rule, are inversely related, largely due to the fact that the lion’s share of world gold trading occurs for dollars on US exchanges and their allies.

By ForexNewsNow

By Elliott Wave International

Let’s (again) delve into the connection between the stock market and news

The stock market is a fractal — i.e., a self-repeating form at all degrees of trend. Meaning, without the time or price labels, you can’t tell if you’re looking at a 2-minute chart or at a monthly one.

What’s more, stock market trends unfold in repetitive and recognizable price patterns.

What’s more, these patterns — Elliott wave pattens — emerge regardless of the news.

Yes, there may be very brief reactions to news, but then the main trend continues. That’s because the larger stock market trends aren’t driven by the news, they are driven by market participants’ bias, bullish or bearish. What we call, market psychology.

That’s why you often see headlines with the word “despite” in them — like, “Stocks rally despite U.S. unemployment at the highest level since the Great Depression,” or “Stocks fall despite stronger-than-expected consumer confidence report.” That word, “despite,” tells you everything you need to know.

Review Part I and Figures 1 through 5 in Chapter 12 of Robert Prechter’s 2017 book, The Socionomic Theory of Finance, and you’ll see evidence that the market is not priced according to external conditions.

And, here’s what the book says about those brief reactions:

Evidence for even temporary emotional reactions in markets is surprisingly suspect. All market observers have seen futures prices gyrate more intensely for a few seconds or minutes before and/or after an announcement perceived as major news. However, ensuing market movement may be totally opposite to the tenor of such news, even when it is a total surprise.

This quote came to mind when, on June 29, this sobering news appeared on a major financial website (CNBC):

Nearly half the U.S. population is without a job, showing how far the labor recovery has to go

The employment-population ratio — the number of employed people as a percentage of the U.S. adult population — plunged to 52.8% in May, meaning 47.2% of Americans are jobless.

Interestingly, on that very day, the DJIA closed up 580 points.

Plus, as you know, the stock market has bounced back substantially since the March lows, despite a historic slew of negative news.

Indeed, the June Elliott Wave Theorist, a monthly publication which has offered subscribers analysis of financial markets and cultural trends since 1979, showed this chart and said:

The first reports of economic contraction came out in March and continued through May. … Stock prices not only rose for seven weeks but also jumped higher on nearly every report of a rise in unemployment claims. A particularly big up day occurred when statistics suggested an increase in employment, but analysts quickly recognized that the numbers were untrustworthy due to restrictions in data collection deriving from the pandemic. No matter; stocks went up the next day, too.

In fact, you can also see that the stock market rose more than it fell when Covid-19 dominated the headlines! It also rose on the day of the first protests — and continued to climb for two weeks, despite the vandalism, looting and clashes between protestors and police not seen in decades.

The real driver of the stock market’s trend is investor psychology, which Elliott waves reflect.

As the book, Elliott Wave Principle: Key to Market Behavior, notes:

The Wave Principle is governed by man’s social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.

Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own.

Learn about this “law” of the market.

You can do so by reading the online version of Elliott Wave Principle: Key to Market Behavior, which is available to you free when you join Club EWI. Membership is also free.

Club EWI is the world’s largest Elliott wave educational community and members get free access to a wealth of resources on investing and trading.

Click on this link to get started: Elliott Wave Principle: Key to Market Behavior — read it for free.

By Orbex

Rates Remain At Record Lows

At its July meeting this week, the Reserve Bank of Australia refrained from adjusting its monetary policy. This was in line with broad market expectations. Rates now remain at record lows of 0.25%.

The RBA statement issued with the decision was broadly optimistic. However, RBA governor Lowe was clear regarding the downside risks to both the domestic and global economies from the ongoing COVID-19 pandemic.

In the statement, the RBA noted:

“Globally, conditions in financial markets have improved. Volatility has declined and there have been large raisings of both debt and equity. The prices of many assets have risen substantially despite the high level of uncertainty about the economic outlook. Bond yields remain at historically low levels”.

“Biggest Contraction Since the 1930s”

Despite noting calmer conditions, Lowe was keen to stress the severity of the current situation, saying:

“The Australian economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s. Since March, an unprecedented 800,000 people have lost their jobs, with many others retaining their job only because of government and other support programs.”

Again, however, even this message was fairly optimistic. He went to say:

“Conditions have, however, stabilised recently and the downturn has been less severe than earlier expected. While total hours worked in Australia continued to decline in May, the decline was considerably smaller than in April and less than previously thought likely. There has also been a pick-up in retail spending in response to the decline in infections and the easing of restrictions in most of the country.”

RBA Prepared to Ease Further

While the statement noted the recent pickup in activity, however, the outlook “remains highly uncertain.” Lowe was nonetheless keen to reassure markets, saying:

“The Bank is prepared to scale-up its bond purchases again and will do whatever is necessary to ensure bond markets remain functional and to achieve the yield target for 3-year AGS. The yield target will remain in place until progress is being made towards the goals for full employment and inflation.”

Second Wave Fears Rising in Australia

Uncertainty concerning the recovery in Australia has taken on greater focus in recent days. Traders are now reacting to news of fresh lockdowns there.

Cities such as Victoria and Melbourne have been placed back into lockdown amidst a fresh outbreak of cases. There are also fears that the spread could reach Sydney.

With this in mind, travel in and out of Sydney has been reduced as the government battles to prevent a second wave of the virus from taking hold.

AUDUSD Holds Above Broken Bearish Trend Line

The recent rally in AUDUSD has seen price breaking above the .6684 level which now becomes support. The rally has so far been capped by resistance at the .7025 level.

The retest of the trend line has so far held as support, keeping focus on a further grind higher in the near term. The .7333 level is the next resistance to watch.

Only a move back below the .6684 level, which would bring price back under the bearish trend line, will alter this view.

By Orbex