IIn this article, Frank Holmes, CEO of US Global Investors and Executive Chairman of HIVE Blockchain Technologies, discusses the robust growth of the US manufacturing sector and how it drove higher commodity prices, as well as the return of luxury goods giant LVMH to growth and Coinbase public earnings. debut.
A series of positive economic news was released last week, pointing to a strong ongoing recovery from the recession caused by the coronavirus pandemic and adding to the thesis that inflation will accelerate.
Leading manufacturing data from the Federal Reserve Banks of Philadelphia and New York were extremely constructive for future business activity. The Philadelphia Federal Index recorded 50.2 this month, the highest level in nearly 50 years, if you can believe it.
Nearly three out of four firms reported higher prices for raw materials as well as higher prices for home-made goods. Manufacturers in New York reported the same: commodity prices rose at the fastest pace since 2008, while selling prices rose at a record pace.
Indeed, the Producer Price Index (PPI), published monthly by the Bureau of Labor Statistics (BLS), shows prices rising to multi-year highs. For example, the index of processed goods rose 4% in March, the largest increase since August 1974. In a 12-month period, unprocessed goods soared 41.6%, the strongest growth since July 2008.
A number of goods have fallen sharply recently. Lumber futures have risen for the 15th straight day. And just look at corn prices. Harvest futures rose above $ 6 a bushel for the first time since June 2013 due to tight supply and strong demand from China and South Korea. Corn prices are now up 85% from the same period last year and could double before we see a decline.
Copper continued its gains last week on the back of an upbeat Goldman Sachs report. [GS], causing the red metal to rise to a record high of $ 15,000 per tonne by 2025 due to an unprecedented supply and demand imbalance caused by renewables.
According to the analyst group, current copper prices of around $ 9,000 are “too low to prevent short-term risk of depletion of reserves.” A price of around $ 15,000 alone is enough to stimulate the development of new copper projects.
Our favorite copper game continues to be Ivanhoe Mines, led by billionaire Robert Friedland, who sees the lack of new mines as a national security issue. Speaking at the CRU World Copper virtual conference last week, Robert told listeners that markets still haven’t realized how disruptive the transition to renewables and electrification of everything and how much copper will be required.
“It’s all copper, copper, copper, copper, copper, copper,” Robert said. Ivanhoe Mines [IVN.TO] also announced that the Kakula and Kansoko mines produced a record 400,000 metric tons of ore with a copper grade of 5.36% in March.
Luxury giant LVMH returns to growth
Retail sales jumped a whopping 9.8% in March from the previous month, the second-highest growth on record as consumers leveraged their stimmy checks.
As I recently shared with you, sales of passenger cars and light trucks are up an incredible 58% in March over last year, with many luxury car manufacturers setting new monthly and quarterly sales records.
French luxury giant LVMH Moet Hennessy Louis Vuitton [MC.PA] announced last week that it has returned to growth after the pandemic, reporting first-quarter revenue of € 14 billion, or $ 16.75 billion.
Fashion and leather goods started the year well, with record revenues that were 52% higher than in the same period in 2020 and 37% higher than in 2019. The conglomerate was aided by the recent acquisition of American jeweler Tiffany, bringing the number of companies it owns to over 75.
I am very pleased with the way LVMH has performed during the pandemic, during which the wealth of wealthy consumers increased. LVHM, with a market capitalization of around 320 billion euros ($ 383 billion), is the most valuable company in Europe.
Sales in the first quarter were driven by Asia, especially China, and the United States, which coped with COVID-19 much better than Europe. The increasing traffic in US seaports is a clear sign that demand is strong right now.
After a record February, the Port of Los Angeles handled 957,599 twenty foot equivalent units (TEU) in March, the busiest March in the port’s 114-year history. Collectively, it was the busiest first quarter in the history of the seaport.
To see the 10 countries with the largest shipping fleets, click here.
Coinbase Goes Public By Opening Cryptocurrency Gateways
Last week, digital currencies hit Wall Street hard. Coinbase cryptocurrency exchange [COIN] went public in a direct listing, opening gateways for a number of other cryptocurrency-related companies.
This step brings us one step closer to mass adoption of cryptocurrencies. Previously, investors willing to participate had several options other than holding the underlying assets.
The most obvious of these is the ownership of shares in crypto miners, including HIVE Blockchain Technologies. [HIVE], the only publicly traded firm that mines both Bitcoin and Ether using green energy. Futures contracts are also negotiated through the CME Group, and a number of issuers have applied for Bitcoin ETFs.
With Coinbase, investors gain access to the entire $ 2.2 trillion crypto ecosystem, including not only Bitcoin and Ether, but smaller but fast-growing coins like Dogecoin. All of the mentioned cryptocurrencies hit new highs last week following the debut of Coinbase.
Stock trading volume on day one was a staggering $ 29 billion, which could be an all-time high, according to data Bloomberg’s Eric Balchunas.
Several commentators noted that Coinbase closed lower than it opened. As I said Cointelegraph Last week, I saw this story play out many times in my 30 years of money management. Often, when a company grows 300% in a year and goes public, it can easily sell 30%. I don’t think investors should worry too much about Coinbase’s volatility. I am incredibly optimistic.
This does not mean that the industry is stable. It remains highly volatile. Documenting Ether’s Twitter on Friday (above) shows how much your investment would be today if you used April 2020 incentive validation to buy Bitcoin, Ether, or Dogecoin. It’s hard to look at these numbers and not kick yourself.
This article was originally published on the Frank Talk blog by Frank Holmes, CEO of US Global Investors and Executive Chairman of HIVE Blockchain Technologies.
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