Gold, silver rally, but stocks still mostly in the Monday doldrums
WASHINGTON – After a late inning rally last week, the Dow Jones Industrials as well as its pals the D&P 500 and the tech-heavy NASDAQ have returned to the Monday doldrums. What a letdown from last week’s late recovery rally. But Monday also has a silver lining, so to speak. Perhaps finally returning to their traditional roles as a store of value, gold and silver (and their various ETFs) have quietly rallied during the same period. Today is no exception.
Gold and silver fever: Back again?
All that glisters may not be gold (or silver). But it remains at least moderately assuring that these precious metals, plus palladium, may be returning to their traditional roles as “stores of value,” perhaps regaining their rightful place after the latest roilings in the imaginary coin realm.
Reality on the ground: Precious metals have stunk up the room in recent months. Neither last fall’s election chaos nor the current Fake Administration’s obvious ignorance- and malevolence-caused chaos gave gold or silver their traditional economic fear jolt over the past six months, so maybe we’re seeing it now. Now that bitcoin is proving once again what’s always been obvious to us. Why invest in something that has no basic value whatsoever, except what each coin’s “miners” tell you.?
As for gold? Here’s some evidence. The Gold SPDR ETF (NYSE:GLD) finally rose above its 200-day moving average. Silver, too, as silver and silver miners continue a slow recovery from their collective post-Reddit swoon.
(Full disclosure: We almost always keep small positions in a gold and / or silver ETFs, currently preferring the smaller but oddly less volatile Aberdeen physical gold ETF (NYSE:SGOL) and the iShares Silver Trust (NYSE:SLV). They never seem to do us much good or ill either way, but we hold them because you never know.)
Should we still worry about selling in May? (Maybe…)
Meanwhile, we continue our attempts to discovery the reality of Mr Market’s recent antics. And we can only think of one major influence at the moment. The imaginary Biden Administration and its gaff-tastic results during 2021’s first and second quarters continue to weigh on stocks.
This, in turn, seems to be making “sell in May” a more reliable bet than usual, but who knows. These days, most news is fake news, so we’ll just have to wait and see.
Techs remain dismally weak, given the constant “can you top this” disaster stories about how the shortage of various chips will kill all American and international companies sometime next week or even earlier. We absorbed those stories earlier this year. But they failed to derail tech companies from making money in recent quarters.
Maybe everyone is still short techs and trying to protect their fading positions. Just like those big funds that seem to be going bust lately at a once-a-week clip. Or thereabouts. But we digress.
Techs continue to get hit Monday, though not badly. Large cap stocks look a bit anemic Monday as well.
AT&T to buy Discovery? Looks like it…
One big piece of news got splashed across the Wall Street Journal’s front page this morning. It was the announcement that AT&T (NYSE:T) would make yet another big entertainment acquisition. This time it’s Discovery (NASDAQ:DISCA) and (NASDAQ:DISCK, carrying no voting rights.)
This fairly robust entertainment giant, carrying mostly sub-channels that started out to mean something (as in The Science Channel’s morphing into the much fluffier and tawdrier TSC) retains the critical mass to make $$. That’s something that T shares could obviously use as this one-time Baby Bell tries to turn itself into a streaming entertainment behemoth.
But T’s continued entertainment acquisitions, like all that Warners stuff, haven’t yet worked major magic. And worse, hand-over-fist acquisitions have caused AT&T to keep racking up costly debt even as they attempt to keep paying that fat traditional telco dividend. It’s currently a whopping 6.45%, way better than a moribund money market fund.
(More full disclosure: We currently hold T shares in our account, precisely because we keep getting that 6.45% on our shares. But, alas, we also bought some DISCK shares after their roughly 30-point crash. That resulted on nothing fundamental. Instead it was due to the forced selling of now liquidated hedge funds a couple of months ago.)
Endgame for our DISCK holdings
We finally saw no point in holding the small position we bought after that massive fall because the damned shares kept declining. So we dumped them for a small loss. Thus missing Monday morning’s big jump in the share price. Ah, but not to worry. The shares are logging another daily loss today as of 3 p.m. ET. Easy come, easy go, we guess. But this kind of action is increasingly typical in today’s market, which is not for the faint hearted.
That’s about it for this dicey May Monday. Perhaps we’ll get a better sense of where Mr Market may turn next on the morrow. In many ways, we admit, we don’t have a clue. But no matter what those big fund geniuses tell you on CNBC, they don’t have any idea where things are going either. It’s just that really rich guys have an easier time misleading the public, which often forgets all that bad “advice.”
See you Tuesday.