Monday, stocks rose in Asia 0.5%, closed little changed in Europe and the U.S. on low volume. The VXO dropped 10% to close at 13.02. Precious metals rose 1% and their miners gained twice that amount.
Tuesday, stocks gained 0.4% in Asia, 1% in Europe, and 0.7% in the U.S. on light volume. The 10-Year U.S. Treasury bond rate rose 2% to close at 2.07. Precious metals and their miners fell 1%. IBM closed above 150.
Wednesday, stocks closed unchanged in Europe but gained 0.3% in Asia and the U.S. on light volume. The S&P 500 Index and the NASDAQ logged more record closing highs. Precious metals and their miners rose 1%. Congress voted to kick the can down the road for two more years by voting to not enforce the debt ceiling. Boris Johnson replaced Theresa May a prime minister of Great Britain.
Thursday, stocks in Asia closed unchanged. In Europe and the U.S. they fell 0.5% on light volume. The VXO rose 6% to close at 12.93. Precious metals fell 1% and their miners lost three times that amount. Friday, stocks fell 0.8% in Asia, but rose 0.4% and 0.5% in Europe and the U.S. respectively on light volume. The S&P 500 Index and NASDAQ again posted record closing highs.
Finally, here’s a nugget of experience on picking gold vs. stocks from John Hussman’s most recent commentary:
- Stocks do best when valuations are low and interest rates are falling.
- Stocks do worst when valuations are high and interest rates are rising.
- Gold does best when valuations are low (gold to stock index ratio is low) and interest rates are rising.
- Gold does worst when valuations are high and interest rates are falling.
The first two statements go along with Charles J. Givens’ formula:
- When interest rates are low, stocks will grow.
- When interest rates are high, stocks will die.