South Africa accounts for 75% of the world’s platinum supply, with this standoff threatening 40% of the world’s production of the precious metal as workers are protesting wages.
As you can see from the chart below, the platinum/gold ratio is at a historical bottom. I would not hesitate to go long this ratio for various reasons, including platinum’s industrial applications. Platinum is a more rare metal than gold, and I think that it would be a quality investment as investors are flocking from fiat currency investments.
David Cornes holds a degree in economics from the University of Montana.
The Hang Seng lost 1.2% today, putting it down 1.3% this week, while the Shanghai composite lost 1% putting it at a 3 year low. The resources sector was among the worst performers with China Shenhua, China’s biggest coal producer, losing 3.5%. PetroChina stumbled back 0.6% after a 21% decline in Q2 net profits. CNOOC lost 1.1% today, 5% this week, due to week profit and a 40% slash in their dividend. Banks were also week today with the Bank of China losing 1.3% after its weakest quarterly profit growth in 3 years. China construction bank is also down 1.9% today.
The FTSEurofirst is beginning today flat as investors lock in profit to minimize risk and exposure. Mining stocks were the biggest losing sector today as their sector is very economically sensitive. Eurasian natural resources and Rio Tinto were among top fallers on the index losing 3.6 and 3.3% respectively. Eurozone banks were also week with the sector losing 1.3% today. Today’s focus will be on the meeting between the German Chancellor and Greek Prime Minister.
Global bank eyes are on Denmark’s after last month’s experiment of setting its main deposit rates for banks at -0.2%, which the ECB said it may follow.
Apple is now 4th being knocked down from 2nd, in Q2 in China’s smartphone market. Consumers are waiting for the next Iphone or buying other brands; Samsung maintains the lead.
Crude, gold and silver are set to begin below while natural gas is on the rise this morning.
Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market. Comments can be directed to ryghcw19@uww.edu
Although it appears that we are in a strong bullish trend, I feel that sentiment is on the edge. The S&P needs the smallest excuse to tilt in the bearish direction, and it could tear lower. I would not place a bullish bet on this index.
David Cornes holds a degree in economics from the University of Montana.
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