THE CHAPMAN REPORT – Stocks, Gold, Oil, and Trade

This week

• Stocks make new highs but the market is in the first time frame for a potential high for the year.

• Bonds in Canada and the US went in opposite directions this past week. Canadian bonds fell due to higher inflation. US bonds rose but it wasn’t universal as the yield curve flattened. Warnings abound from the IMF and rating agencies about the level of US debt and the level of debt in the advanced economies (Canada and Germany are the exceptions).

• The US$ surged but it was really a one currency show as it was the Euro, the largest component of the US$ Index, that had the big fall. But other indicators suggest that this may only be temporary situation as the Greek situation which is driving the Euro may be temporary and the US is threatening essentially a trade war with China.

• Gold prices were steady this past week despite the jump in the US$. Other indicators continue to suggest that this is only a temporary consolidation for gold and once this is over the bull market will resume.

• Oil prices fell back this past week and natural gas gave a sell signal. The energy stocks were weak. The meandering in this sector continues.

A full technical commentary will return next week.
D.C.