Roundup: Fed Cuts Rates: Another Turn of the Monetary Ratchet

Market Scorecard

The divergence between Gold and Oil holds the most intel for investors on where the investment puck is going.

source: Onramp & Koyfin

Gold, +25% YTD and punching to new all-time highs by the day, has separated from economically sensitive Oil, which is roughly flat YTD, after rolling over of late, -11% over the past 3 months.

Global equities are in the middle, stuck in a range since sour global growth estimates emerged in July, leaving all major indices below their mid summer peaks.

NASDAQ remains up 17% YTD, down 1.3% over the past three months. Similar for the Japan’s Nikkei, +9% YTD, down 4% over the past 3 months, due in large part to the Yen carry trade unwind in late July, early August.

This divergence between Gold and Oil is due to the challenge of a weakening economy, which reduces oil demand, while investors are concerned about the Fed’s readiness to print money and cut rates, despite inflation NOT being fully under control.