Robert Smallbone, aka The Contrarian Capitalist, joins the podcast to discuss his view that recession fears are overblown and a fresh “blow-off top” is coming.
This podcast episode was recorded on Thursday, March 13, 2025 and made available to premium subscribers less than 24 hours later! More information on premium subscriptions is available on our Substack.
Content Highlights
Bearishness appears to have taken over markets. The S&P 500 just entered a correction. The guest is not buying that narrative (1:16);
The uncertainty created by the new US president may be intentional to lower bond yields — and interest rates (4:15);
European and UK stock indexes should have more upside ahead (7:21);
Losers include all things renewable energy, bonds, China, and (for now) gold…
This post was originally published the morning of Nov. 6, 2024 in the Daily Contrarian.
The election is over. Trump won. That is going to have broad impacts, not all of which are apparent yet.
The immediate impact of Trump’s victory appears to be a broad move to the riskiest of risk assets. Cryptos being Exhibit A. Small caps are forging ahead. You also have Tesla (TSLA) soaring overnight. Meme stocks are up too, but less.
The losers include all things renewable energy, with solar stocks taking it on the chin overnight. The Invesco Solar ETF (TAN) is down 9% at the time of this writing. Big oil, on the other hand, is gaining ground with Exxon Mobil (XOM) and Chevron (CVX) up 3% each at the time of this writing.
Financials are winners as well. Not just big names like JPMorgan Chase (JPM) and Bank of America (BAC) but regional banks. The SPDR S&P Regional Banking ETF (KRE) is up 8% overnight.
Another loser: China. The iShares China Large-Cap ETF (FXI) is down 2%+. Names like Alibaba (BABA), JD.com (JD) and PDD (PDD) are moving lower.
All That Glitters…
Just keep in mind that the immediate reaction to political events is not always the right one. In 2016 at this time there was a broad sell-off. One can expect things to be volatile, especially as retail investors take short-term gains…
That brings us to a first possible opportunity. There has been a pullback in gold overnight, a likely result of the ‘strong dollar’ trade ushered in by this Trump victory. There are three problems with this trade, however:
Trump’s policies are widely expected to be inflationary. You’ve seen the resulting sell-off in bonds. That means a weaker USD;
The Federal Reserve is cutting rates, which is also bad for the USD.
One would expect all of this to, in time, be good for gold. During Trump’s first term the precious metal rallied by 55%. Past performance is not always a guide to future results, but gold tends to do well under Republican administrations (+215% in eight years of George W. Bush).
Make no mistake, though: gold has been on a massive tear all year and only recently pulled back from all-time highs:
Still, if gold keeps dropping it may present a buying opportunity keeping items 1-3 above in mind.
Full disclosure: The Contrarian owns some physical gold as well as SPDR Gold Shares ETF (GLD) in a retirement account.
Tony Greer of TG Macro joins the podcast to discuss his bullish view on industrial commodities, especially oil, AI, the upcoming presidential election, and more.
Content Highlights
Why energy commodities, precious and base metals are all set up to rally (1:31);
China’s stimulus package boosted industrial metals. The bounce should not be limited to the short term… (4:57);
There are a number of ways to express the ‘long commodities’ trade. ETFs may be the simplest… (8:59)
The bullish case for uranium (10:37);
Don’t fade the AI story (14:20);
The inevitable cryptocurrency discussion (17:04);
Background on the guest (22:30);
Listener question: What’s the inflection point for a move higher in industrial commodities? (26:10);
