1. U.S. Treasury Is Trying Curve Control
The U.S. Treasury is trying curve control — trying to tame what’s happening with long-term bond yields as the budget deficit soars and the fiscal situation seems to be getting worse.
It started with $4 billion worth of interventions. Now, we are at $1 trillion.
Don’t forget: the bond market is huge. Also, U.S. bonds/Treasuries are in the global financial system’s pipelines.
This shouldn’t be overlooked.
So far, the intervention noise hasn’t done much to yields.
2. Gold Breaks Above the 200-Day Moving Average
Gold has comfortably crossed above its 200-day moving average. This could bring more buyers to the market.
Why is gold rising? It’s essentially a trade that tells us investors aren’t buying what the U.S. Treasury is trying to do.
Can gold go higher? Yes, possible. But $4,800 is resistance for now. A break above it could mean $5,000 gold very quickly.
Also, something to keep in mind: as the U.S. Treasury intervenes, it also increases the odds of something breaking. In case we have some sort of liquidity event, the initial reaction in gold tends to be bearish. But generally, that becomes a great time to look at the yellow precious metal.
3. The Stock Market Is Getting Crowded
Stock market performance is reliant on a few companies. It’s dangerous and shows a lot of concentration. hen you go into a crowded trade, in case of a panic exit, the pain can be really severe.
Investing for the long term? It might not be a bad idea to look at underperforming names. Good companies, still making money, with a solid track record of posting consistent results, but with the stock down 20–40% from its highs could be worth watching closely.
Don’t be shocked if the next few months (September and October) are painful. There’s too much going on, and no one seems to be talking about risks.
4. The U.S. and Canada Are in a Trade War
The U.S. and Canada are in a trade war.
Canada likely faces hardships initially in case the trade war continues and tariffs remain persistent.
The U.S. is just losing friends very quickly.
Reality: trade talks will likely resume eventually, and there will be a “deal.” But the fear of tariffs and a trade war is possibly worse than the tariffs and trade war themselves.
5. Bitcoin Is Calling No-Confidence
Bitcoin has seen a robust move to the upside. It’s also calling no-confidence on what the U.S. Treasury is doing, just like gold.
The Canadian dollar is falling against the U.S. dollar as trade talks collapse.
The Japanese yen still hasn’t dropped much. Yields on Japanese bonds continue to trend higher.
Oil is slipping a bit but remains elevated. Iran war risk hasn’t really disappeared.