The World’s Best Gold Indicator (Reuters)
Forget the price of bullion, watching the futures market or even picks-and-shovels companies, the new, best indicator for gold price movement may be George Soros. At least, that’s one conclusion that can be drawn now that the world knows Soros Fund Management reduced its stake in gold by almost 10 percent, just days before a price plunge sent gold down some 12 percent. Quite the shrewd move, but what was it based on? According to Soros, in an interview with the South China Morning Post, “Gold was destroyed as a safe haven, proved to be unsafe. Because of the disappointment, most people are reducing their holdings of gold.” Just a week after that quote, gold plunged… So, investors are left to ask, is Soros a gold indicator, or a gold mover — based solely on his word alone. Whichever is the case, we’ll be watching for what he says next about the barbarous relic.
Markets Reach New Highs Again… But Unhinged from Reality (CNBC)
Both the Dow and the S&P 500 closed on new highs Wednesdays, reaching 15,275.69 and 1,658.78, respectively. Unfortunately for baby-brother tech, the Nasdaq’s gains were tempered by shares of Apple, Inc. (AAPL) losing 3 percent for the session. This situation marked the 20th new high of the year for the Dow and the 15th for the S&P 500. What’s truly remarkable about these new highs is that they defy conventional wisdom. Art Hogan, managing director at Lazard Capital Markets, said, “The market’s been defying gravity a bit — apart from the housing report, the rest of the data was relatively negative today.” With the markets continuing their upward march, despite the economic reality in the United States, is this a time to get in on the ride, or avoid being taken for a ride? The next move belongs to you.
Wal-Mart Trails Second Quarter Estimates (Bloomberg)
Wal-Mart’s earnings per share for Q213 are expected to be $1.22-$1.27, which would trail analysts’ consensus estimates of $1.29, according to Bloomberg. The fall-off is attributed to a slowing economy — despite what the new market highs may cause you to believe; and Americans getting hit with tax hikes. To combat the falling revenue, Wal-Mart CEO Mike Duke led an effort to cut prices on groceries and other necessities, as management is concluding lower-income shoppers are the ones hardest hit by new taxes, higher unemployment and higher social security taxes. Unfortunately, those efforts weren’t enough in the second quarter, as same store sales are expected to be off by 1.4 percent — the first decline in the last six months. We’ll have to see how Q3 earnings shape up…