Fox Business/Jonathan Garber
Biden’s ‘green stimulus’ would send silver soaring to $50: Bank of America
Already surging silver prices could get a big boost if former Vice President Joe Biden wins the 2020 election and pieces of the Green New Deal are put into action, according to strategists at Bank of America.
Biden has championed portions of the climate plan, which calls for the U.S. to reach net-zero carbon emissions by 2050.
A switch to more renewable sources of energy – including solar – would have to be a big part of the plan, and silver is a key ingredient in solar panels.
“Investors help, but industrial demand ultimately moves the needle” for silver prices, wrote a team of Bank of America strategists led by Michael Widmer.
Silver has already surged 51% this year to $26.87 an ounce as investors flocked to the precious metal as an alternative store of value during the COVID-19 pandemic. An increase in industrial applications of silver, however, would catapult prices even higher.
Annual silver demand, which is currently 2,285 tonnes, could increase by 87 percent to 4,272 tonnes over the next 15 years if the U.S. power sector alone accelerated its de-carbonization efforts, according to the strategists.
After $2,000 gold price, $4,000 is next; Frank Holmes doubles down on call
The fiscal and monetary conditions have never been stronger for gold prices, and while the yellow metal already broke records this week by hitting $2,000 an ounce, Frank Holmes, CEO of U.S. Global Investors, doubled down on his $4,000 an ounce by the end of this bull cycle call.
Price corrections can happen along the way, Holmes said, but gold investors should buy on the dip. Every time you have a secular bull market, there are many 10% corrections. So you can easily get a 10% correction in stocks, if you get a 3% correction in bullion,” Holmes told Kitco News. “It’s just recognizing that that ratio of 3-1 is important, and if you have the stomach to weather it.”
On the economy, Holmes expects inflation to rise, but rates to stay low, creating a negative real rate environment.
“The greater the negative real interest rates, the greater the price of gold,” Holmes noted.
‘Clueless’ investors just keep driving this ‘stupidly bullish’ stock market higher, CNBC’s Jim Cramer says
‘Sometimes the market rallies and it makes perfect sense. Then there are days like today, when I can’t take how stupidly bullish this market can be.’
That’s CNBC “Mad Money” host Jim Cramer shaking his head at ‘clueless’ investors who ignored multiple warning signs to buy up stocks during Tuesday’s bullish trading action.
“Never underestimate the power of enthusiastic buyers who do not know what they’re doing,” he said after the Dow Jones Industrial Average DJIA, +1.39% finished the session with a triple-digit gain. The S&P 500 SPX, +0.64% and Nasdaq Composite COMP, +0.52% also ended higher.
He specifically pointed to oil giant BP BP, +0.88% and biopharma firm Sorrento SRNE, +7.36% as examples. There’s “plenty of stupidity,” he said, “especially during earnings season when there’s so much news that it’s hard to keep track of what’s going on.”
BP’s surge, in particular, didn’t sit right with Cramer, who said it might be the “dumbest action” so far this year. “Not only are they telling you business is terrible, BP is trying to distance itself from crude while preserving cash, but maybe that dividend hike was a mistake,” he said.
CNN Business/Anneken Tappe
America’s jobs crisis could be about to get even worse
America’s fragile jobs market recovery, after just two months of improvement, appears to be losing steam as Covid-19 infections rise and federal funds for businesses begin to dry up.
On Friday, the US government is set to release its monthly jobs report, and economists are predicting another 1.6 million jobs were added in July — a sharp slowdown from the 4.8 million added in June. That would bring the monthly unemployment rate to 10.5% in July, from 11.1% in June.
If those predictions hold true, America would still be down some 13 million jobs since February, and the unemployment rate would still be higher than at the peak of the 2007-09 financial crisis.
Although most economists say the pace of the recovery slowed in July, some say it reversed.
Oxford Economics senior US economist Lydia Boussour says she expects Friday’s report to show a loss of 280,000 jobs, rather than a gain. That would signal even more clearly that the foundation of the recovery is cracking.