Over the past 10 years, S&P 500 per share dividends at the fastest pace on record, expanding them at an average rate in excess of 10%, far in excess of GDP. Total U.S. corporate dividend payments have hit a new record high of 7% of GDP, double the long-term average, thanks to a number of…
The dollar’s ongoing weakness looks highly likely to drive a reversal in the outperformance of U.S. stocks relative to the rest of the world that has taken place since 2008. The continued outperformance of U.S. equities in the face of the dollar’s decline reflects two factors: the incredible outperformance in corporate fundamentals in local currency…
Gold’s rally has been driven by the U.S.’s increasingly loose monetary and fiscal policy mix, but the metal has become extremely overvalued relative to the broader commodity complex. Gold bulls are effectively betting that the surge in money supply will cause consumer and commodity prices to catch up with elevated gold prices while real yields continue…
Returns on a balanced portfolio of U.S. stocks and government bonds are likely to be negative over the next 10 years, underperforming those seen during the Great Depression. The housing bubble of 2007 and the 2000 tech bubble pale in comparison to the current policy-driven everything bubble. Based on the SP500’s payout-adjusted dividend yield, the…
With all currencies losing value relative to gold and silver, we believe the Japanese yen remains the least bad fiat currency option. While real interest rates continue to head lower in the U.S., they have remained in positive territory in Japan thanks to persistent expectations of price deflation. The current spread of Japanese over U.S.…
The prospects for a long-overdue reversal in U.S. value stocks relative to growth stocks are rising rapidly as the macroeconomic picture and valuation divergence point to significant value stock outperformance. While declining real yields have benefitted growth stocks in recent months, a reversal in the value-growth performance does not require a rise in real yields.…
Silver has broken conclusively through major technical resistance and looks set for a potentially parabolic rise higher as we saw following the break of the $20 level a decade ago. There are a number of similarities to the late 2010 period, with Fed easing in full swing, gold prices elevated, and the broad commodity complex…
The euro continues to follow the appreciatory path implied by the recovery in real yield spreads between Germany and the U.S. Together with the bullish shift in speculative sentiment, this suggests the currency is priced for ~15% appreciation over the next 3 months. With this in mind, we remain bullish on the Invesco CurrencyShares Euro Trust…
We are long the Invesco Currency Shares British Pound Sterling Trust ETF (FXB) in anticipation of potential double-digit gains over the next 12 months. Real interest rate spreads between the U.K. and the U.S. have moved dramatically in the U.K.’s favour over the past year which strongly suggests pound gains. We also expect inflation expectations…
After breaking above short-term down trendline resistance last week, silver looks set for run at key neckline resistance going back to 2014, above which would target the $20 level. The technical picture for silver chimes with the move higher we have seen across industrial metals prices, with copper prices trending particularly strongly, smashing above short-term…