KITCO/Neils Christensen

Fed’s Powell sends gold price on rollercoaster ride, dismisses idea of negative rates

“June gold futures rallied to session highs as Powell started to speak during a webinar hosted by the Peterson Institute for International Economics. He reiterating his call that the central bank would continue to do whatever it took to support the U.S. economy that has been devastated by the COVID-19 pandemic.

Powell also went back and forth on his outlook for the U.S. economy. He noted that the U.S. economy was in a good position at the start of the year and the virus is the cause of the unprecedented downturn.

He added that although the Federal Reserve and the federal government have taken historic measures to support the economy, more may be needed. He also said that the virus has created an environment of significant uncertainty.”

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MARKETWATCH/Steve Goldstein

Why Stanley Druckenmiller says the risk-reward of investing in stocks has never been worse

“The famed former hedge-fund manager, who with George Soros famously broke the Bank of England by shorting the pound in 1992, says “the risk-reward for equity is maybe as bad as I’ve seen it in my career.”

The S&P 500 SPX, -0.29% has climbed 28% from the lows of March, even in the face of data showing the economy, at best, plateauing after a severe downturn.

Speaking at a webinar run by The Economic Club of New York on Tuesday night, the chairman and chief executive of Duquesne Family Office says it is just not true that it is profitable to be on the side of the Federal Reserve, which has cut interest rates to nearly zero, swelled its balance sheet and initiated several emergency lending programs. He thinks stocks are at high multiples given the uncertainty of the current environment and looming bankruptcies.

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CNBC/Fred Imbert and Maggie Fitzgerald

Dow drops more than 100 points as Powell sees ‘significant downside risks’

coronavirus comeback chart“The Dow Jones Industrial Average and S&P 500 fell on Wednesday as investors pored through downbeat remarks from the top-ranking Federal Reserve official amid jitters about reopening the economy.

The 30-stock Dow dropped 150 points, or 0.6%. The S&P 500 traded 0.4% lower while the Nasdaq Composite climbed 0.4%.

“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks,” Fed Chairman Jerome Powell said in prepared remarks for a webcast event with the Peterson Institute for International Economics, noting that more needs to be done to sustain the economy. Powell added, however, the economy should see a substantial recovery once the coronavirus is under control.”

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FX EMPIRE/Arkadiusz Sieroń

Will Job Market from Hell Support Gold?

Initial jobless claims“This mammoth increase in the unemployment rate was driven by the giant losses in the nonfarm payrolls. The coronavirus destroyed 20.5 million American jobs in April, an unprecedented monthly change. The number of destroyed jobs has been the largest since the 1939.

Importantly, the real situation in the US labor market is even darker than the Employment Report suggests. Why? First, although the Great Lockdown is gradually unwinding, investors should remember that in the establishment survey, “workers who are paid by their employer for all or any part of the pay period including the 12th of the month are counted as employed, even if they were not actually at their jobs.” It means that the current report does not count workers who lost their jobs after April 12 nor people on temporary layoff. As the BLS admits itself, if millions of Americans who have been furloughed and expect to return to their jobs are counted as unemployed, the unemployment rate would have been almost 5 percentage points higher.”

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