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“It’s tremendously bullish to see gold break out of this pattern, which has been really keeping gold range bound for the last four and a half, five months.” – 01:13

Mark Newton, Managing Director of Fundstrat Global Advisors, joins Remy Blaire at the New York Stock Exchange to discuss to discuss the current state of the U.S. stock market and the broader economic landscape. As they dive into midweek trading, they observe mixed results among major U.S. stock averages, influenced by ongoing trade uncertainties and global bond movements.

Remy highlights the significant surge in gold prices, which have reached new all-time highs, while silver also shows impressive gains. Mark explains that this bullish trend is largely driven by expectations of interest rate cuts from the Federal Reserve, alongside concerns about the fiscal situation both domestically and globally. He notes that gold has broken out of a range-bound pattern that has persisted for several months, projecting that gold could hit $3,800 and silver could reach the mid-40s.

The discussion shifts to year-to-date performance, with gold up approximately 30% and silver nearing 40%. Mark emphasizes the importance of real interest rates and the lack of significant inflation as key factors influencing these precious metals. He also discusses the industrial demand for silver, particularly from China, which imports more silver ore than any other country.

As they analyze the technology sector, Remy and Mark observe a divergence in performance, with Apple showing impressive gains while other tech stocks, like Salesforce, have struggled. Mark points out that this trend is noteworthy and suggests that investors should remain vigilant. Despite some concerns about a potential market correction, he expresses optimism about the overall market trajectory, especially as they approach a historically challenging month for Wall Street in October.

The conversation also touches on the bond market, where recent price action has been influenced by comments from the European Central Bank and historical trends in September. Mark believes that U.S. Treasury yields are likely to continue falling, which could signal a weakening economy in the coming weeks. He discusses the implications of global central bank policies and the potential downward pressure on the U.S. dollar and Treasury yields.

In the closing moments of the segment, Remy and Mark reflect on the importance of understanding interest rate differentials and their impact on the dollar. Mark concludes with a cautious yet optimistic outlook, suggesting that while there may be challenges ahead, the current trends remain intact, and there are opportunities for investors.

“I think there is a lot of caution in the Fed that they don’t want to get it wrong again.” – 02:51

James Knightley, Chief International Economist at ING, joins Remy Blaire at the New York Stock Exchange to discuss the current economic landscape. They begin by emphasizing the importance of the Fed meeting scheduled for September 16th to 17th. James highlights that there are already two voters in favor of a 25 basis point rate cut, suggesting that the Fed may be preparing to act preemptively to avoid a significant rise in unemployment.

As the conversation unfolds, Remy and James explore the various economic indicators that will be released throughout the week, including ADP employment figures and jobless claims. James addresses the uncertainty surrounding tariffs and their potential impact on inflation, drawing parallels to the inflationary pressures experienced during the COVID-19 pandemic. He argues that while tariffs may lead to short-term price increases, several key factors—such as declining oil prices, a cooling housing market, and subdued wage growth—indicate that a repeat of past inflationary trends is unlikely.

The discussion then shifts to the recent revisions in GDP growth, which have been adjusted to 3.3%. While this figure appears robust at first glance, James cautions that it is largely influenced by trade volatility. He provides a more nuanced perspective, suggesting that the average growth rate over the past two quarters is closer to 1.6%, reflecting a cooler growth narrative moving forward.

“There are several signs of what I would call excessive optimism or speculation or overconfidence in the U.S. market.” – 01:39

Jay Hill, Managing Director of Tweedy Brown, joins Remy Blaire to discuss the current state of the stock market and the concept of American exceptionalism. The conversation begins with Remy highlighting the common rationale for investing in household staples, big tech names, and momentum plays, while also noting the potential for small-cap stocks to surprise investors.

Jay shares insights into his investment strategy, which focuses on identifying companies trading at two-thirds or less of their estimated private market value. He expresses concern over the increasing difficulty of finding attractive U.S. stocks, suggesting that American markets are currently priced for perfection. In contrast, he points out that international markets, particularly in Europe and the U.K., present lower expectations and more favorable valuations.

Throughout the episode, Jay discusses several indicators of excessive optimism in the U.S. market, including record highs in stock prices, low corporate credit spreads, and unprecedented levels of margin debt. He warns that these factors could lead to disappointing returns for U.S. investors over the next decade, particularly given historical performance trends of the S&P 500 at similar valuation levels.

Remy and Jay also delve into the significance of insider buying as a key valuation metric. Jay explains that Tweedy Brown has always been interested in insider buying, viewing it as a positive signal when company executives invest in their own shares. He cites historical studies that show market outperformance associated with insider buying and shares findings from Tweedy Brown’s proprietary study, which indicates that combining insider buying with quantitative cheapness leads to superior performance.