Author: Andrew Packer

Cryptocurrencies

The Compound: Only One Factor Drives Bitcoin Prices and This Is It

Posted on by Andrew Packer

Cryptocurrency prices have largely bounced around over the past few months. The crypto market set an all-time high earlier in the year. More recently, assets such as gold and stocks have taken the lead.

That’s in spite of a slew of good news. Crypto ETFs have launched, including 11 bitcoin ETFs and several Ethereum ETFs. Investors have more and easier access to crypto than ever before. But other factors will push prices higher.

Cryptocurrencies are incredibly volatile. When price soar, investors love the asset. When prices drop, they hate it. In a sideways market, investors tend to get frustrated and move on to faster-moving assets.

Today, with crypto trading sideways, the digital asset space looks much like gold after its early year run. A further breakout is likely.

Part of that is that investors continue to accumulate cryptocurrencies such as bitcoin. Long-term holders look at it as a store of value. And bitcoin’s halving has reduced new supply. Right now, demand for bitcoin exceeds the latest daily new issuance.

Over time, that should be bullish for prices. And could lead to a massive price move higher for bitcoin over the next 12-18 months. But in a short-term period, the price will remain volatile both up and down.

Given the strong demand for bitcoin, and rising investor demand, this key factor driving prices should push them higher.

 

To watch the full interview, click here.

 

Commodities

VanEck: Miners’ Margins Grow as Gold Soars to Fresh Highs

Posted on by Andrew Packer

Gold prices have set new all-time highs. Since it first soared higher in April, the metal consolidated around $2,350. In August, gold started to trend higher again, breaking over $2,500 per ounce for the first time.

Gold’s price looks set to rally further. Investors remain concerned about inflation, which may trend higher as interest rates come down. And commodities in general appear to be in a bullish uptrend, which can last for years.

Add in the current geopolitical risk right now, and gold looks attractive. Central banks remain robust buyers of the metal. Those big buys can help keep prices trending higher thanks to the strong demand.

When gold prices rise, the prices of gold-related investments tend to also perform at least as well as gold, if not better.

That includes gold mining stocks. Since a company’s costs are relatively unchanged over a quarter, a boost in gold prices tend to move directly to a company’s bottom line.

That can mean higher profit margins. So far, for the second quarter of 2024, gold miners have beaten earnings estimates about 80% of the time.

Investors can buy individual gold mining stocks such as global giant Barrick Gold (GOLD).

Or, investors can take a wider approach with a diversified gold miners ETF, such as the VanEck Gold Miners ETF (GDX), which owns a basket of leading gold stocks.

 

To view the full analysis on gold’s move higher, click here.

Stock market strategies

A Wealth of Common Sense: Talk Your Book: Quality Growth Investing

Posted on by Andrew Packer

Investing comes in all types and flavors. However, most styles tend to get grouped as either value or growth. Right now, the market loves growth, especially given the prospective returns of AI stocks.

However, value stocks can also lead to great returns for patient investors over time. That said, there are ways to blend the two ideas together. Ideally, that can mean getting the best of both, high growth at a reasonable value.

One way is to look at a company that’s growing in terms of the quality of its growth. That gets into a company’s earnings, and how those earnings are made. Rising revenues and cash flows matter more than the one-time sale of a division.

A company that makes inconsistent moves or spends tremendous sums on new endeavors may be a poor one. Meta Platforms (META) which is a massive cash generator with its social media sites, fits the bill. Meta’s push into the metaverse moved away from growing quality earnings.

A company that focuses on quality can also see growth under any market conditions. Factors such as inflation or rising interest rates should have little impact on the business itself. A company that needs low interest rates to succeed likely has not done so.

 

To listen to the full podcast, click here.

Stock market

FX Evolution: This Has Only Happened 8 Times in 30 Years

Posted on by Andrew Packer

Markets continue to roar back from their early August selloff. Investors who bought the dip are faring well. Those who expect another big selloff have been disappointed so far.

In the meantime, the S&P 500 and Nasdaq hit an 8-day winning streak. And both indices gained more than 5% over that period. That’s a huge move. It’s also one that suggests the rebound has ended.

Going forward, the market will likely continue its long-term uptrend. But it will take on a slower and more cautious approach.

This market shift higher may have some believing that there will be no recession anytime soon. However, the economic data that helped the market sell off in the first place does show that markets are slowing.

Meanwhile, global liquidity remains on the rise. And it’s set to rise further as interest rates decline, there is still some more upside over the next year.

With markets still looking bullish, investors can still stay long this market. And over the next year, investors can look to get increasingly defensive. That includes sectors such as utilities and gold.

Thanks to the AI boom and rising demand for electric power, utilities offer both safety, income, and some medium-term growth over the next few years. Gold can hold up with a bullish market, and the metal still has more room to run over $2,500.

 

To view the full data behind the market’s latest move, click here.

Economy

Game of Trades: This is a Textbook Bear Trap

Posted on by Andrew Packer

In just two weeks, the stock market has gone from being overly fearful to closing in once again on all-time highs. The volatility index topped 65, a level last seen around the Covid crash. That index is now back to its normal range near 15.

Meanwhile, investor data shows that as the market neared a 10% pullback level, investors got increasingly bearish. In hindsight, the market move now looks like little more than a classic bear trap.

A bear trap is simply a market downdraft. It makes investors bearish, leading to a selloff. But the trap is sprung and prices shoot higher.

Those who held steady did fine. Those who bought into the market and ignored the fear made out like bandits.

For investors, it’s essential to know what separates a normal pullback and bear trap from a major selloff.

For starters, investors can look towards economic conditions. While conditions have weakened, it’s also weakening to the point where central banks will start cutting interest rates. With rates at their highest level in 15 years, the start of rate cuts could be bullish.

Meanwhile, the U.S. Treasury curve remains inverted, after briefly flirting with un-inversion. It’s only after the curve un-inverts that investors should be thinking about a recession in the near future. When a recession looks likely, markets will start to move lower and price that in.

 

To watch the full analysis, click here.

 

Cryptocurrencies

TFTC: Why the Next 12 Months Will Be HUGE For Bitcoin

Posted on by Andrew Packer

Many assets have hit new all-time highs this year. That includes the stock market, gold, and bitcoin. Right now, stocks and bitcoin are off their highs. However, trends are on track for those assets to move higher.

As that happens, several factors could help boost the price of bitcoin even further. It could end the year at the six-figure mark. Over the next 12 months, the price could jump even more.

That’s because bitcoin has become an institutional asset. The rise of bitcoin-related ETFs earlier this year attracts capital to bitcoin. And those assets can now be parked in tax-deferred accounts such as a 401(k) or an IRA.

Meanwhile, U.S. debt continues to soar. With a deficit of over $35 trillion debt levels have been soaring.

Plus, Treasury yields on bonds are set to decline as interest rates decline. That offers investors a lower prospective return, especially if inflation jumps higher again.

And that’s in the United States alone. Other countries face similar, if not worse, challenges for investors in so-called safe assets.

These trends look attractive for bitcoin. As does the prospect for any market dislocation or fear. Investors can still invest in bitcoin at a reasonable discount to its recent highs ahead of its next move higher.

 

For a full review of how bitcoin could have a huge move over the next year, click here.

Income investing

Dividend Growth Investor: Six Dividend Growth Stocks Raising Dividends Last Week

Posted on by Andrew Packer

Market volatility remains elevated. That trend may continue over the next few months, likely lasting through the election. That means that growth stocks could see some big swings. But many of those swings will be lower.

An alternative to growth stocks that may play well in the months ahead are dividend-paying stocks. These are companies that have extra cash flow that can be passed on to investors. And over time, a great company can pay growing dividends.

There are hundreds of companies that pay an increasing dividend over time. As these companies report earnings, they also announce dividend increases.

For instance, freight and logistics company C.H. Robinson Worldwide (CHRW) has raised its quarterly dividend by a penny. Shares pay a 2.5% dividend, but C.H. Robinson has paid an increased dividend in each of the last 26 years.

Financial services company Primerica (PRI) has now raised its dividend for the 14th consecutive year. Today, Primerica pays just a 1.4% dividend. However, the last decade, the payout has increased at an average annualized rate of 19.5%.

In financial markets, dividend growth stocks are a small group. Current dividend yields may not be high. Dividend growth may prove slow. But investors who stick with dividend growth stocks over time can build a powerful income stream that continues to grow.

 

To see the full list of recent dividend increases, click here.

Commodities

Rebel Capitalist: Copper and Gold Are Both Signaling This…

Posted on by Andrew Packer

Gold prices continue to trend higher. The metal recently topped $2,500 for the first time ever. The metal is having a strong year. But gold prices can also reflect some of the health of the underlying economy.

Gold’s move higher suggests that investors remain concerned about inflation. Gold tends to hold its own against inflation over time. It tends to fare best when inflation unexpectedly pops higher.

Meanwhile, other commodities continue to perk up. That could be a sign of a longer-term bull market in the commodity sector. Such a bull market will take years to play out, but could be highly rewarding.

Besides gold, copper is showing some signs of long-term strength. The metal has been in high demand. However, China has recently pulled back on its massive copper buys. That’s created a big price drop.

Despite a small selloff in July, along with the selloff in markets, copper is on track to trend higher.

More importantly, the ratio of copper prices relative to gold indicate a stronger value here.

Investors interested in the metal can wait for the price of copper to stop declining. Copper is a widely-traded commodity. But copper mining stocks may offer investors better valuations. And copper mining stocks can also provide the income of dividend payments.

 

To watch the full video, click here.

Stock market

FX Evolution: You Won’t Believe How Similar These Markets Are

Posted on by Andrew Packer

The market’s recent selloff has had several comparisons to the Crash of 1987. The one-day, 22% decline in the Dow reshaped how markets operate. The recent market selloff was far smaller. But it does have a number of similarities.

For starters, both markets were up considerably for the year. Markets were already having an above-average year going into the recent turbulence. And will still likely end the year in the green, as in 1987.

However, it could also be a sign of market weakness. In 2024, the Magnificent Seven stocks continued to drive the overall market higher. There’s been some sign of market breadth improving in recent weeks. But a shift to smaller companies could still lead to an overall market decline.

Meanwhile, economic data is coming in about where investors expect. The labor market continues to weaken. That will make it appropriate for the Federal Reserve to start cutting interest rates later this year.

For now, markets may have a bit more volatility in the coming weeks. The Crash of 1987 took nearly three weeks of sideways trading before stocks started to trend higher.

And once markets did start to trend higher, it took months for markets to get back into the swing of a full bull run. That could happen again, so investors have a few more months of likely sideways trading.

 

To see the full comparison of different markets, click here.

Stock market strategies

Elliott Wave Options: Beware This Downside Zig-Zag!

Posted on by Andrew Packer

Markets have caught a bit of a break from their selloff that kicked off August. And economic data, such as cooling inflation, have helped bring market volatility lower. However, while markets have started moving higher, the trend may not last.

That’s because markets don’t tend to sell off all at once over the span of a few days. The recent selloff looks like an exception to that notion, at least for now.

However, it’s possible that markets are facing a longer, multi-month decline. That will mean that there will be some sharp rallies along the way.

Right now, investors are focused on the spike on the market volatility index. However, stocks can trend lower without another big spike. With volatility still at elevated levels, investors should remain cautious.

Given how the markets are trading, investors may want to consider the possibility of a further downtrend. That would fit in with the seasonal weakness we see in markets in September and October.

For long-term investors, patience is the name of the game. There may be a chance to buy in again near the recent market lows.

And investors can still buy into some strong sectors of the market.

That includes utility stocks, which offer steady and reliable income. And it includes gold stocks. Gold prices are holding up well amid this recent market volatility.

 

To view the full technical analysis, click here.