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Tuesday's drag on stocks was due to crude oil, after Saudi
Arabia's oil minister reiterated that any production deal would
involve a freeze at current supply levels, not a cut to drop
He also thundered that while the Kingdom wasn't pursuing a
market share strategy (yeah, right) high-cost producers (looking
at you, U.S. shale men) must lower costs or liquidate. The
Iranians remain upset about the idea, since they are ramping up
production to pre-sanctions levels.
Some hawkish commentary out of the Federal Reserve didn't help
3 Precious Metals Stocks Just Getting Warmed Up
(GG, ABX, KGC)
In the end, the
Dow Jones Industrial Average
lost 1.1%, the
dropped 1.3%, the
shed 1.5% and the
ended the day 0.9% lower. Elsewhere, treasury bonds
strengthened, the dollar was mixed, gold gained 1.3% and crude
oil lost 4.6% to close at $31.85 a barrel.
Defensive utility stocks led the way with a 0.1% gain. Energy
(surprise surprise) was the laggard, down 3.2%.
) gained 3% on a Q4 earnings-per-share beat, thanks to a
comp-store sales decline that
wasn't as bad as expected
) was slammed 20.8% after reporting 8.2 million devices sold in
the fourth quarter (vs. 7.5 million expected) but disappointing
on Q1 revenue and earnings guidance on production transition
headwinds. I guess the stock price won't hit its distance
traveled goal for the day.
The recent hotness in the materials sector turned cold
) down 8.7% after being downgraded to sell by analysts at Citi on
the potential drags from planned asset sales amid tough financing
United States Steel Corporation
) lost 5.2% after being downgraded by Cowen on limited upside for
U.S. steel prices and a poor production utilization rate.
Despite the skid, I still think materials and mining stocks
are set to shine in the weeks to come.
Just look at the way gold and silver miners have been
continuing their upward launch trajectories.
Barrick Gold Corporation (USA)
) is now up more than 80% for
subscribers since first recommended back in November. The
materials sector overall should continue to benefit from
attractive valuations, a looming inflation turnaround and growing
calls for more monetary policy accommodation by the major central
Speaking of the devil, Kansas City Fed President Esther George
sounded a hawkish note today by saying the economic outlook
hasn't fundamentally shifted from the decision in December to
raise interest rates by 0.25% for the first time since 2006
(alongside a forecast for another four rate hikes in 2016). She
added that a rate hike should be discussed at the upcoming March
This flies in the face of a growing expectation in the futures
market that not only should the Fed not hike in March - but it
shouldn't hike at all until 2017. Consumers seem to be backing
this up as well: U.S. consumer confidence fell to its lowest
level in seven months in February, missing expectations
George is a known hawk - it'll be hard for her to overcome the
growing fear among the Fed policy doves that recent market
volatility and ongoing weakness in crude oil will have lasting
effects on financial conditions and inflation remaining below
A rate hike delay will further bolster stocks with material
names (especially those in the gold and silver business) set to
continue their recent run of outperformance.
Anthony Mirhaydari is founder of the
investment advisory newsletters. A two-week and four-week
free trial offer has been extended to InvestorPlace
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