Prospector News Publisher Michael Fox is joined by The National Investor Publisher Chris Temple to discuss the market mayhem during PDAC week.

“Well Lions and Tigers and Bears Oh MY!!!”

For the past week Michael was safely located in the PDAC convention bubble in Toronto and not paying particularly close attention to the markets. What a surprise when he popped his head out of the gopher hole.

First Jerome Powell dropped another turd in the market’s punch bowl during the Senate hearings by not only suggesting the Fed wasn’t done raising rates, it may go back to 50 point raises and the target rate my also settle out to be higher than currently anticipated. We discuss the ramifications of this as well as the cross currents that the Chinese and Japanese central banks are providing by actual financial easing in their markets. We also make mention of the Bank of Canada holding its rate steady this week while it appears that the Bank of England is prepared to do the same. These factors may cause another surge in the US dollar index going forward from here and push headwinds into commodities and other sectors of the economy.

The second topic and the Gorilla in the room is the collapse of Silicon Valley Bank this week and the possible structural damage and contagion this could have to other financial institutions and the Tech markets. “Too Big to Fail” is the open ended question to this discussion. The other question is this the cause of a “Fed Pivot”? Both Chris and Michael have held the position that the Fed would continue to raise its rates until something breaks. Is this the proverbial straw?

Finally, as the week ended, the jobs number came out slightly higher than expected but with unemployment ticking up higher. Michael points out that the unemployment number are a lagging indicator and that the layoffs that occurred in Q4 of last year and over the first couple of months of 2023 won’t be reflected in the unemployment numbers for several months to come as severance packages keep these individuals out of the data.

Interesting times ahead indeed!