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GraniteShares

Research

The current economic tumult recatalyzes the classic, three-fold case for gold, namely asset stability, diversification and vulnerability of the dollar in the new Fed paradigm. This investment case explores the critical dynamics that have propelled gold to new record highs above $2,000/oz, and how the asset's unique status combining characteristics of a commodity and a currency lend gold unique value as the global economy attempts a reset from the COVID-19 tumult.

Topic: Gold

Publication Type: Investment Cases

Investment Case for Gold as The Yellow Metal Charts New Record Highs

03 September, 2020 | Ryan Giannotto, CFA, Director of Research
The current economic tumult recatalyzes the classic, three-fold case for gold, namely asset stability, diversification and vulnerability of the dollar in the new Fed paradigm. This investment case explores the critical dynamics that have propelled gold to new record highs above $2,000/oz, and how the asset's unique status combining characteristics of a commodity and a currency lend gold unique value as the global economy attempts a reset from the COVID-19 tumult.

A somewhat choppy week for U.S. stock markets with the S&P 500 Index striving for but not reaching record highs on Wednesday. Despite stronger-than-expected U.S. economic reports (including lower-than-expected weekly jobless claims, strong retail sales and industrial production reports) and a falling number of new Covid-19 cases and deaths, U.S. stock markets struggled to move higher last week.  Concerns surrounding the legality of President Trump’s  executive orders combined with still-stalled congressional coronavirus-related stimulus negotiations and, perhaps, higher-than-expected PPI, CPI and wage inflation numbers may have limited stock market gains.  The 10-year U.S. Treasury rate moved higher all through the week, reacting to corporate and government supply pressures, higher-than-expected inflation numbers and strong U.S. economic reports. At week’s end the S&P 500 Index increased 0.6% to 3,372.85, the Nasdaq Composite index increased 0.1% to 11,019.30, the 10-year U.S. interest rate increased 14 bps to 71 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.4%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending August 14 , 2020)

17 August, 2020 | Jeff Klearman
A somewhat choppy week for U.S. stock markets with the S&P 500 Index striving for but not reaching record highs on Wednesday. Despite stronger-than-expected U.S. economic reports (including lower-than-expected weekly jobless claims, strong retail sales and industrial production reports) and a falling number of new Covid-19 cases and deaths, U.S. stock markets struggled to move higher last week.  Concerns surrounding the legality of President Trump’s  executive orders combined with still-stalled congressional coronavirus-related stimulus negotiations and, perhaps, higher-than-expected PPI, CPI and wage inflation numbers may have limited stock market gains.  The 10-year U.S. Treasury rate moved higher all through the week, reacting to corporate and government supply pressures, higher-than-expected inflation numbers and strong U.S. economic reports. At week’s end the S&P 500 Index increased 0.6% to 3,372.85, the Nasdaq Composite index increased 0.1% to 11,019.30, the 10-year U.S. interest rate increased 14 bps to 71 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.4%.

Against a backdrop of better-than-expected economic reports and earning results and indications new Covid-19 cases may be falling, U.S. stock markets all moved higher again last week despite concerns over increased U.S.-China frictions and stalled congressional progess on additional coronavirus relief funds. Better-than-expected factory orders and ISM manufacturing and non-manufacturing index numbers combined with lower-than-expected weekly jobless claims and a stronger-than-expected payroll report helped move U.S. equity markets higher. Earning results reported last week were predominantly positive also helping move equity markets higher. Early-in-the-week optimism that congress would reach agreement on additional coronavirus-related relief funds faded as the week ended with no progress, but was slightly ameliorated with the Trump administration announcing the President may take executive action to extend existing programs. Both the U.S. dollar and the 10-year U.S. Treasury rate moved off their lows reached earlier in the week on stronger-than-expected economic reports and signs the number of new Covid-19 cases may be decreasing. At week’s end the S&P 500 Index and Nasdaq Composite index each increased 2.5% to 3,351.28 and 11,010.98, respectively. the 10-year U.S. interest rate increased 4 bps to 57 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) was unchanged.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending August 7 , 2020)

10 August, 2020 | Jeff Klearman
Against a backdrop of better-than-expected economic reports and earning results and indications new Covid-19 cases may be falling, U.S. stock markets all moved higher again last week despite concerns over increased U.S.-China frictions and stalled congressional progess on additional coronavirus relief funds. Better-than-expected factory orders and ISM manufacturing and non-manufacturing index numbers combined with lower-than-expected weekly jobless claims and a stronger-than-expected payroll report helped move U.S. equity markets higher. Earning results reported last week were predominantly positive also helping move equity markets higher. Early-in-the-week optimism that congress would reach agreement on additional coronavirus-related relief funds faded as the week ended with no progress, but was slightly ameliorated with the Trump administration announcing the President may take executive action to extend existing programs. Both the U.S. dollar and the 10-year U.S. Treasury rate moved off their lows reached earlier in the week on stronger-than-expected economic reports and signs the number of new Covid-19 cases may be decreasing. At week’s end the S&P 500 Index and Nasdaq Composite index each increased 2.5% to 3,351.28 and 11,010.98, respectively. the 10-year U.S. interest rate increased 4 bps to 57 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) was unchanged.

All three major U.S. stock indexes ended higher (moving in a zig-zag fashion), the U.S. dollar continued to weaken and the 10-year U.S Treasury rate fell last week as investors digested earnings and economic reports, FOMC statements, growing Covid-19 cases and congressional stimulus bill progress.   Earnings reports, though generally mixed, provided strong support for U.S. stock markets with four major technology companies reporting better-than-expected results after the market on Thursday.  Apple results were particularly strong, pushing the share price of Apple over 10% higher on Friday and raising its market capitalization to over $1.8 trillion. Comments by Fed Chairman Jerome Powell following the end of a 2-day FOMC meeting on Wednesday reaffirmed the Fed’s commitment to maintain aggressive monetary policy to support maximum employment and price stability.  Chairman Powell also said the U.S. economy faces a long road to recovery, that the virus will determine the path of that recovery and emphasized the importance of fiscal policy to support the economy.   Economic reports last week were also mixed with pending home sales, consumer spending and durable goods orders reports all better-than-expected while weekly jobless claims were slightly higher than expected.  The first estimate of 2nd  quarter GDP, released Thursday, posted its all-time greatest quarterly contraction of 32.7%, though this was slightly better than expectations.  Markets also focused on Friday’s expiration of supplemental unemployment benefits and congressional negotiations to extend them and implement a phase 4 coronavirus stimulus package.  At week’s end the S&P 500 Index increased 1.7% to 3,271.12, the Nasdaq Composite Index rose 3.7% to 10,745.27, the 10-year U.S. interest rate fell 6 bps to 53bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened another 1.2%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending July 31, 2020)

03 August, 2020 | Jeff Klearman
All three major U.S. stock indexes ended higher (moving in a zig-zag fashion), the U.S. dollar continued to weaken and the 10-year U.S Treasury rate fell last week as investors digested earnings and economic reports, FOMC statements, growing Covid-19 cases and congressional stimulus bill progress.   Earnings reports, though generally mixed, provided strong support for U.S. stock markets with four major technology companies reporting better-than-expected results after the market on Thursday.  Apple results were particularly strong, pushing the share price of Apple over 10% higher on Friday and raising its market capitalization to over $1.8 trillion. Comments by Fed Chairman Jerome Powell following the end of a 2-day FOMC meeting on Wednesday reaffirmed the Fed’s commitment to maintain aggressive monetary policy to support maximum employment and price stability.  Chairman Powell also said the U.S. economy faces a long road to recovery, that the virus will determine the path of that recovery and emphasized the importance of fiscal policy to support the economy.   Economic reports last week were also mixed with pending home sales, consumer spending and durable goods orders reports all better-than-expected while weekly jobless claims were slightly higher than expected.  The first estimate of 2nd  quarter GDP, released Thursday, posted its all-time greatest quarterly contraction of 32.7%, though this was slightly better than expectations.  Markets also focused on Friday’s expiration of supplemental unemployment benefits and congressional negotiations to extend them and implement a phase 4 coronavirus stimulus package.  At week’s end the S&P 500 Index increased 1.7% to 3,271.12, the Nasdaq Composite Index rose 3.7% to 10,745.27, the 10-year U.S. interest rate fell 6 bps to 53bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened another 1.2%.

Riding on the previous week’s momentum, U.S. stock markets moved higher on Monday with the Nasdaq Composite Index reaching another record high. Increased investor optimism spurred by the EU’s passage of an $860 billion coronavirus recovery fund, increased hopes of a phase 4 U.S. coronavirus stimulus package and positive developments regarding a Covid-19 vaccine helped move the S&P 500 Index higher through Wednesday. Despite a strong Microsoft earnings report after the close on Wednesday, both the S&P 500 and the Nasdaq Composite Index moved lower on Thursday with the Nasdaq Composite Index falling over 2%. A larger-than-hoped-for jobless claims number, new U.S-China frictions resulting in the closing of the China consulate in Houston, rising Covid-19 cases and the rotation out of tech into cyclical stocks all contributed to Thursday’s as well as Friday’s U.S. stock market declines. The U.S. dollar (as measured by the U.S. Dollar Index – DXY) weakened significantly over the week, pressured lower by increased concerns over the growing number of U.S. Covid-19 cases, uncertainty regarding a phase 4 coronavirus stimulus package and expectations EU GDP growth will significantly outpace U.S. GDP growth over the next year. At week’s end the S&P 500 Index decreased 0.3% to 3,215.63, the Nasdaq Composite Index fell 1.3% to 10,363.18, the 10-year U.S. interest rate fell 4 bps to 59bps and the U.S. dollar (as measured by the U.S. Dollar index - DXY) weakened 1.7%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending July 24, 2020)

27 July, 2020 | Jeff Klearman
Riding on the previous week’s momentum, U.S. stock markets moved higher on Monday with the Nasdaq Composite Index reaching another record high. Increased investor optimism spurred by the EU’s passage of an $860 billion coronavirus recovery fund, increased hopes of a phase 4 U.S. coronavirus stimulus package and positive developments regarding a Covid-19 vaccine helped move the S&P 500 Index higher through Wednesday. Despite a strong Microsoft earnings report after the close on Wednesday, both the S&P 500 and the Nasdaq Composite Index moved lower on Thursday with the Nasdaq Composite Index falling over 2%. A larger-than-hoped-for jobless claims number, new U.S-China frictions resulting in the closing of the China consulate in Houston, rising Covid-19 cases and the rotation out of tech into cyclical stocks all contributed to Thursday’s as well as Friday’s U.S. stock market declines. The U.S. dollar (as measured by the U.S. Dollar Index – DXY) weakened significantly over the week, pressured lower by increased concerns over the growing number of U.S. Covid-19 cases, uncertainty regarding a phase 4 coronavirus stimulus package and expectations EU GDP growth will significantly outpace U.S. GDP growth over the next year. At week’s end the S&P 500 Index decreased 0.3% to 3,215.63, the Nasdaq Composite Index fell 1.3% to 10,363.18, the 10-year U.S. interest rate fell 4 bps to 59bps and the U.S. dollar (as measured by the U.S. Dollar index - DXY) weakened 1.7%.

Gold December futures prices finished the week almost unchanged, moving higher Monday on the back of sharply declining equity prices only to move lower the remainder of the week.  Central bank tightening angst, rising longer-term U.S. interest rates and strong economic reports pressured prices lower through Thursday.  Friday’s much weaker-than-expected U.S. payroll report initially sent gold prices almost 1% higher as investors lowered expectations of imminent Fed tightening only to see those gains erased by the close of U.S. trading with renewed uncertainty regarding changes in U.S. Federal Reserve Bank monetary policy.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending October 8, 2021)

11 October, 2021 | Jeff Klearman
Gold December futures prices finished the week almost unchanged, moving higher Monday on the back of sharply declining equity prices only to move lower the remainder of the week.  Central bank tightening angst, rising longer-term U.S. interest rates and strong economic reports pressured prices lower through Thursday.  Friday’s much weaker-than-expected U.S. payroll report initially sent gold prices almost 1% higher as investors lowered expectations of imminent Fed tightening only to see those gains erased by the close of U.S. trading with renewed uncertainty regarding changes in U.S. Federal Reserve Bank monetary policy.

Oil prices continued to move higher last week with Brent crude oil prices reaching intraday levels of $80/barrel.   Despite larger-than-expected oil and distillate inventory increases (as reported by the EIA Wednesday), oil prices moved higher supported by both production shortages and growing global demand.   OPEC+, which meets this week, continues to have difficulties meeting its agreed upon production levels and is not expected to alter production levels while Hurricane-Ida-hindered Gulf of Mexico production is slowly coming back online.   On the demand side, China announced it will do what is necessary to maintain its energy and power supply implying cost is not an issue while India imports reached a 3-month high.  On top of all this is the skyrocketing cost of natural gas (due to high demand, low inventory levels and production problems) increasing oil demand as a substitute.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending October 1, 2021)

04 October, 2021 | Jeff Klearman
Oil prices continued to move higher last week with Brent crude oil prices reaching intraday levels of $80/barrel.   Despite larger-than-expected oil and distillate inventory increases (as reported by the EIA Wednesday), oil prices moved higher supported by both production shortages and growing global demand.   OPEC+, which meets this week, continues to have difficulties meeting its agreed upon production levels and is not expected to alter production levels while Hurricane-Ida-hindered Gulf of Mexico production is slowly coming back online.   On the demand side, China announced it will do what is necessary to maintain its energy and power supply implying cost is not an issue while India imports reached a 3-month high.  On top of all this is the skyrocketing cost of natural gas (due to high demand, low inventory levels and production problems) increasing oil demand as a substitute.

Up over 1.5% through Wednesday, supported by Evergrande contagion fears and uncertainty surrounding the 2-day FOMC meeting, gold futures prices (December expiration) dropped 1.6% Thursday as contagion fears abated and investors digested Wednesday’s FOMC announcement. Wednesday’s FOMC announcement indicated the Fed would likely begin tapering November (with bond buybacks to be eliminated by June next year) with at least one rate hike in 2022 followed by another 2-3 hikes in 2023.  10-year U.S Treasury rates, down 6bps through Wednesday, jumped 13bps Thursday, contributing to the weakness in gold prices.  Nonetheless, 10-year real yields remain near historical lows, closing near -90bps Friday.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending September 24, 2021)

27 September, 2021 | Jeff Klearman
Up over 1.5% through Wednesday, supported by Evergrande contagion fears and uncertainty surrounding the 2-day FOMC meeting, gold futures prices (December expiration) dropped 1.6% Thursday as contagion fears abated and investors digested Wednesday’s FOMC announcement. Wednesday’s FOMC announcement indicated the Fed would likely begin tapering November (with bond buybacks to be eliminated by June next year) with at least one rate hike in 2022 followed by another 2-3 hikes in 2023.  10-year U.S Treasury rates, down 6bps through Wednesday, jumped 13bps Thursday, contributing to the weakness in gold prices.  Nonetheless, 10-year real yields remain near historical lows, closing near -90bps Friday.

Oil prices moved sharply higher last week bolstered by slow restoration of Hurricane Ida-related shutdowns and a much larger-than-expected drawdown in U.S. oil inventories as reported by the EIA Wednesday.  Concerns Hurricane Nicholas could disrupt production fell by the wayside after the storm passed without affecting production or mining capabilities. Up over 4% through Thursday, WTI crude oil prices fell ¾ percent Friday following reports Gulf of Mexico production was increasing.  Oil prices gains also were capped by weaker Chinese demand, an increase in shale oil rigs and production and a stronger U.S. dollar.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending September 17, 2021)

20 September, 2021 | Jeff Klearman
Oil prices moved sharply higher last week bolstered by slow restoration of Hurricane Ida-related shutdowns and a much larger-than-expected drawdown in U.S. oil inventories as reported by the EIA Wednesday.  Concerns Hurricane Nicholas could disrupt production fell by the wayside after the storm passed without affecting production or mining capabilities. Up over 4% through Thursday, WTI crude oil prices fell ¾ percent Friday following reports Gulf of Mexico production was increasing.  Oil prices gains also were capped by weaker Chinese demand, an increase in shale oil rigs and production and a stronger U.S. dollar.

Despite significantly lower Chinese imports, copper prices ended the week higher supported by steeply falling inventory levels at both the LME and Shanghai exchanges.   Nickel prices, increasing over 7% on the week, moved higher on strong stainless steel- and EV-related demand, production cutbacks in China as well as on falling inventory levels. Increased shipping and power costs have also worked to increase base metal prices.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending September 10, 2021)

13 September, 2021 | Jeff Klearman
Despite significantly lower Chinese imports, copper prices ended the week higher supported by steeply falling inventory levels at both the LME and Shanghai exchanges.   Nickel prices, increasing over 7% on the week, moved higher on strong stainless steel- and EV-related demand, production cutbacks in China as well as on falling inventory levels. Increased shipping and power costs have also worked to increase base metal prices.

The unfortunate reality is that a deep chasm stands between investor income requirements and what conventional strategies can now yield. Alternative Income may help bridge the divide.

Topic: Income

Publication Type: Investment Cases

The Income Blueprint: Potential Strategy for Income Replacement with HIPS

13 October, 2020 | Ryan Giannotto, CFA, Director of Research
The unfortunate reality is that a deep chasm stands between investor income requirements and what conventional strategies can now yield. Alternative Income may help bridge the divide.

Mental accounting is a truly defining feature of the human condition. Find out how much of your income is mental, and how it may prevent you from acheiving your true income goals.

Topic: Alternative Income

Publication Type: Investment Cases

How Much of Your Income is Mental? Overcoming Human Fallacies in Investing

27 March, 2020 | Ryan Giannotto, CFA, Director of Research
Mental accounting is a truly defining feature of the human condition. Find out how much of your income is mental, and how it may prevent you from acheiving your true income goals.

If you thought achieving income yields was difficult, life will only get harder—the Fed that giveth can taketh away. Just as investors were getting accustomed to the taste of at least modestly non-zero rates, expectations have shifted swiftly.

Topic: Alternative Income

Publication Type: Investment Cases

Help! What Happened to My Income?

27 March, 2020 | Ryan Giannotto, CFA, Director of Research
If you thought achieving income yields was difficult, life will only get harder—the Fed that giveth can taketh away. Just as investors were getting accustomed to the taste of at least modestly non-zero rates, expectations have shifted swiftly.

While generating sustainable yield for income investing has never been an easy task, the latest shockwaves to reverberate through interest rate markets have only compounded this challenge. The core of this problem for investors, whether retirees, long-term savers, or anyone looking to diversify their returns, is they are probably looking for yield in all the wrong places.

Topic: Income

Publication Type: Investment Cases

Looking for Yield in All the Wrong Places: 7% Income and How to Get it in Today’s Market

27 March, 2020 | Ryan Giannotto, CFA, Director of Research
While generating sustainable yield for income investing has never been an easy task, the latest shockwaves to reverberate through interest rate markets have only compounded this challenge. The core of this problem for investors, whether retirees, long-term savers, or anyone looking to diversify their returns, is they are probably looking for yield in all the wrong places.

GraniteShares, a disruptive exchange-traded fund (ETF) company, debuted a revised methodology for the index underlying the GraniteShares HIPS US High Income ETF (NYSE Arca: HIPS), a high alternative income-focused fund that invests in a diversified basket of pass-through securities.

Topic: Income

Publication Type: Viewpoints

GraniteShares Revises Index Methodology for HIPS US High Income ETF (HIPS)

27 March, 2020 | GraniteShares
GraniteShares, a disruptive exchange-traded fund (ETF) company, debuted a revised methodology for the index underlying the GraniteShares HIPS US High Income ETF (NYSE Arca: HIPS), a high alternative income-focused fund that invests in a diversified basket of pass-through securities.

The speed and magnitude of technological disruption is relevant because current and future technologies will continue to create winners (i.e., the disruptors) and losers (i.e., the disruptees) among all companies across industries faster than the market may realize.

Topic: XOUT

Publication Type: Investment Cases

The Cost of Underestimating Technological Disruption

06 October, 2021 | GraniteShares
The speed and magnitude of technological disruption is relevant because current and future technologies will continue to create winners (i.e., the disruptors) and losers (i.e., the disruptees) among all companies across industries faster than the market may realize.

When no company or industry is immune from disruptive challenge, perhaps never has the number of potential losers been so plentiful, nor the disparity between winners and losers been so vast. Rather than succumb to conventional wisdom, perhaps the only thing more important than what you put IN your portfolio is what you XOUT.

Topic: XOUT

Publication Type: Investment Cases

How Many Losers Are in the S&P 500?

17 August, 2020 | Ryan Giannotto, CFA, Director of Research
When no company or industry is immune from disruptive challenge, perhaps never has the number of potential losers been so plentiful, nor the disparity between winners and losers been so vast. Rather than succumb to conventional wisdom, perhaps the only thing more important than what you put IN your portfolio is what you XOUT.

XOUT’s methodology counters traditional investment strategies. Rather than trying to pick a select few winners, XOUT flips the investment paradigm by seeking to avoid losers that are failing to adapt amid today’s environment of unprecedented technological change.

Topic: Precious Metals , XOUT

Publication Type: Viewpoints

GraniteShares Launches XOUT U.S. Large Cap ETF (XOUT)

27 March, 2020 | GraniteShares
XOUT’s methodology counters traditional investment strategies. Rather than trying to pick a select few winners, XOUT flips the investment paradigm by seeking to avoid losers that are failing to adapt amid today’s environment of unprecedented technological change.

GraniteShares is an independent, fully funded ETF company headquartered in New York City. GraniteShares’ ETF suite includes one of the lowest-cost physical gold ETFs (BAR), a broad-based commodity ETF (COMB), an ETF that seeks to exclude U.S. large cap companies most likely to suffer from technological disruption over the long term (XOUT), a high alternative income-focused fund that invests in pass-through securities (HIPS) and the lowest-cost* physical platinum ETF (PLTM). GraniteShares has experienced robust growth in 2019, recently surpassing $700 million in total assets under management.

Topic: Precious Metals , Commodity Baskets , Income , XOUT

Publication Type: Investment Cases

GraniteShares Announces Change in ETF Lineup

27 March, 2020 | GraniteShares
GraniteShares is an independent, fully funded ETF company headquartered in New York City. GraniteShares’ ETF suite includes one of the lowest-cost physical gold ETFs (BAR), a broad-based commodity ETF (COMB), an ETF that seeks to exclude U.S. large cap companies most likely to suffer from technological disruption over the long term (XOUT), a high alternative income-focused fund that invests in pass-through securities (HIPS) and the lowest-cost* physical platinum ETF (PLTM). GraniteShares has experienced robust growth in 2019, recently surpassing $700 million in total assets under management.

The current economic tumult recatalyzes the classic, three-fold case for gold, namely asset stability, diversification and vulnerability of the dollar in the new Fed paradigm. This investment case explores the critical dynamics that have propelled gold to new record highs above $2,000/oz, and how the asset's unique status combining characteristics of a commodity and a currency lend gold unique value as the global economy attempts a reset from the COVID-19 tumult.

Topic: Gold

Publication Type: Investment Cases

Investment Case for Gold as The Yellow Metal Charts New Record Highs

03 September, 2020 | Ryan Giannotto, CFA, Director of Research
The current economic tumult recatalyzes the classic, three-fold case for gold, namely asset stability, diversification and vulnerability of the dollar in the new Fed paradigm. This investment case explores the critical dynamics that have propelled gold to new record highs above $2,000/oz, and how the asset's unique status combining characteristics of a commodity and a currency lend gold unique value as the global economy attempts a reset from the COVID-19 tumult.
A somewhat choppy week for U.S. stock markets with the S&P 500 Index striving for but not reaching record highs on Wednesday. Despite stronger-than-expected U.S. economic reports (including lower-than-expected weekly jobless claims, strong retail sales and industrial production reports) and a falling number of new Covid-19 cases and deaths, U.S. stock markets struggled to move higher last week.  Concerns surrounding the legality of President Trump’s  executive orders combined with still-stalled congressional coronavirus-related stimulus negotiations and, perhaps, higher-than-expected PPI, CPI and wage inflation numbers may have limited stock market gains.  The 10-year U.S. Treasury rate moved higher all through the week, reacting to corporate and government supply pressures, higher-than-expected inflation numbers and strong U.S. economic reports. At week’s end the S&P 500 Index increased 0.6% to 3,372.85, the Nasdaq Composite index increased 0.1% to 11,019.30, the 10-year U.S. interest rate increased 14 bps to 71 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.4%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending August 14 , 2020)

17 August, 2020 | Jeff Klearman
A somewhat choppy week for U.S. stock markets with the S&P 500 Index striving for but not reaching record highs on Wednesday. Despite stronger-than-expected U.S. economic reports (including lower-than-expected weekly jobless claims, strong retail sales and industrial production reports) and a falling number of new Covid-19 cases and deaths, U.S. stock markets struggled to move higher last week.  Concerns surrounding the legality of President Trump’s  executive orders combined with still-stalled congressional coronavirus-related stimulus negotiations and, perhaps, higher-than-expected PPI, CPI and wage inflation numbers may have limited stock market gains.  The 10-year U.S. Treasury rate moved higher all through the week, reacting to corporate and government supply pressures, higher-than-expected inflation numbers and strong U.S. economic reports. At week’s end the S&P 500 Index increased 0.6% to 3,372.85, the Nasdaq Composite index increased 0.1% to 11,019.30, the 10-year U.S. interest rate increased 14 bps to 71 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened 0.4%.
Against a backdrop of better-than-expected economic reports and earning results and indications new Covid-19 cases may be falling, U.S. stock markets all moved higher again last week despite concerns over increased U.S.-China frictions and stalled congressional progess on additional coronavirus relief funds. Better-than-expected factory orders and ISM manufacturing and non-manufacturing index numbers combined with lower-than-expected weekly jobless claims and a stronger-than-expected payroll report helped move U.S. equity markets higher. Earning results reported last week were predominantly positive also helping move equity markets higher. Early-in-the-week optimism that congress would reach agreement on additional coronavirus-related relief funds faded as the week ended with no progress, but was slightly ameliorated with the Trump administration announcing the President may take executive action to extend existing programs. Both the U.S. dollar and the 10-year U.S. Treasury rate moved off their lows reached earlier in the week on stronger-than-expected economic reports and signs the number of new Covid-19 cases may be decreasing. At week’s end the S&P 500 Index and Nasdaq Composite index each increased 2.5% to 3,351.28 and 11,010.98, respectively. the 10-year U.S. interest rate increased 4 bps to 57 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) was unchanged.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending August 7 , 2020)

10 August, 2020 | Jeff Klearman
Against a backdrop of better-than-expected economic reports and earning results and indications new Covid-19 cases may be falling, U.S. stock markets all moved higher again last week despite concerns over increased U.S.-China frictions and stalled congressional progess on additional coronavirus relief funds. Better-than-expected factory orders and ISM manufacturing and non-manufacturing index numbers combined with lower-than-expected weekly jobless claims and a stronger-than-expected payroll report helped move U.S. equity markets higher. Earning results reported last week were predominantly positive also helping move equity markets higher. Early-in-the-week optimism that congress would reach agreement on additional coronavirus-related relief funds faded as the week ended with no progress, but was slightly ameliorated with the Trump administration announcing the President may take executive action to extend existing programs. Both the U.S. dollar and the 10-year U.S. Treasury rate moved off their lows reached earlier in the week on stronger-than-expected economic reports and signs the number of new Covid-19 cases may be decreasing. At week’s end the S&P 500 Index and Nasdaq Composite index each increased 2.5% to 3,351.28 and 11,010.98, respectively. the 10-year U.S. interest rate increased 4 bps to 57 bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) was unchanged.
All three major U.S. stock indexes ended higher (moving in a zig-zag fashion), the U.S. dollar continued to weaken and the 10-year U.S Treasury rate fell last week as investors digested earnings and economic reports, FOMC statements, growing Covid-19 cases and congressional stimulus bill progress.   Earnings reports, though generally mixed, provided strong support for U.S. stock markets with four major technology companies reporting better-than-expected results after the market on Thursday.  Apple results were particularly strong, pushing the share price of Apple over 10% higher on Friday and raising its market capitalization to over $1.8 trillion. Comments by Fed Chairman Jerome Powell following the end of a 2-day FOMC meeting on Wednesday reaffirmed the Fed’s commitment to maintain aggressive monetary policy to support maximum employment and price stability.  Chairman Powell also said the U.S. economy faces a long road to recovery, that the virus will determine the path of that recovery and emphasized the importance of fiscal policy to support the economy.   Economic reports last week were also mixed with pending home sales, consumer spending and durable goods orders reports all better-than-expected while weekly jobless claims were slightly higher than expected.  The first estimate of 2nd  quarter GDP, released Thursday, posted its all-time greatest quarterly contraction of 32.7%, though this was slightly better than expectations.  Markets also focused on Friday’s expiration of supplemental unemployment benefits and congressional negotiations to extend them and implement a phase 4 coronavirus stimulus package.  At week’s end the S&P 500 Index increased 1.7% to 3,271.12, the Nasdaq Composite Index rose 3.7% to 10,745.27, the 10-year U.S. interest rate fell 6 bps to 53bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened another 1.2%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending July 31, 2020)

03 August, 2020 | Jeff Klearman
All three major U.S. stock indexes ended higher (moving in a zig-zag fashion), the U.S. dollar continued to weaken and the 10-year U.S Treasury rate fell last week as investors digested earnings and economic reports, FOMC statements, growing Covid-19 cases and congressional stimulus bill progress.   Earnings reports, though generally mixed, provided strong support for U.S. stock markets with four major technology companies reporting better-than-expected results after the market on Thursday.  Apple results were particularly strong, pushing the share price of Apple over 10% higher on Friday and raising its market capitalization to over $1.8 trillion. Comments by Fed Chairman Jerome Powell following the end of a 2-day FOMC meeting on Wednesday reaffirmed the Fed’s commitment to maintain aggressive monetary policy to support maximum employment and price stability.  Chairman Powell also said the U.S. economy faces a long road to recovery, that the virus will determine the path of that recovery and emphasized the importance of fiscal policy to support the economy.   Economic reports last week were also mixed with pending home sales, consumer spending and durable goods orders reports all better-than-expected while weekly jobless claims were slightly higher than expected.  The first estimate of 2nd  quarter GDP, released Thursday, posted its all-time greatest quarterly contraction of 32.7%, though this was slightly better than expectations.  Markets also focused on Friday’s expiration of supplemental unemployment benefits and congressional negotiations to extend them and implement a phase 4 coronavirus stimulus package.  At week’s end the S&P 500 Index increased 1.7% to 3,271.12, the Nasdaq Composite Index rose 3.7% to 10,745.27, the 10-year U.S. interest rate fell 6 bps to 53bps and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) weakened another 1.2%.
Riding on the previous week’s momentum, U.S. stock markets moved higher on Monday with the Nasdaq Composite Index reaching another record high. Increased investor optimism spurred by the EU’s passage of an $860 billion coronavirus recovery fund, increased hopes of a phase 4 U.S. coronavirus stimulus package and positive developments regarding a Covid-19 vaccine helped move the S&P 500 Index higher through Wednesday. Despite a strong Microsoft earnings report after the close on Wednesday, both the S&P 500 and the Nasdaq Composite Index moved lower on Thursday with the Nasdaq Composite Index falling over 2%. A larger-than-hoped-for jobless claims number, new U.S-China frictions resulting in the closing of the China consulate in Houston, rising Covid-19 cases and the rotation out of tech into cyclical stocks all contributed to Thursday’s as well as Friday’s U.S. stock market declines. The U.S. dollar (as measured by the U.S. Dollar Index – DXY) weakened significantly over the week, pressured lower by increased concerns over the growing number of U.S. Covid-19 cases, uncertainty regarding a phase 4 coronavirus stimulus package and expectations EU GDP growth will significantly outpace U.S. GDP growth over the next year. At week’s end the S&P 500 Index decreased 0.3% to 3,215.63, the Nasdaq Composite Index fell 1.3% to 10,363.18, the 10-year U.S. interest rate fell 4 bps to 59bps and the U.S. dollar (as measured by the U.S. Dollar index - DXY) weakened 1.7%.

Topic: Gold , Commodities

Publication Type: Market Commentaries

Commodities and Precious Metals Update (Week ending July 24, 2020)

27 July, 2020 | Jeff Klearman
Riding on the previous week’s momentum, U.S. stock markets moved higher on Monday with the Nasdaq Composite Index reaching another record high. Increased investor optimism spurred by the EU’s passage of an $860 billion coronavirus recovery fund, increased hopes of a phase 4 U.S. coronavirus stimulus package and positive developments regarding a Covid-19 vaccine helped move the S&P 500 Index higher through Wednesday. Despite a strong Microsoft earnings report after the close on Wednesday, both the S&P 500 and the Nasdaq Composite Index moved lower on Thursday with the Nasdaq Composite Index falling over 2%. A larger-than-hoped-for jobless claims number, new U.S-China frictions resulting in the closing of the China consulate in Houston, rising Covid-19 cases and the rotation out of tech into cyclical stocks all contributed to Thursday’s as well as Friday’s U.S. stock market declines. The U.S. dollar (as measured by the U.S. Dollar Index – DXY) weakened significantly over the week, pressured lower by increased concerns over the growing number of U.S. Covid-19 cases, uncertainty regarding a phase 4 coronavirus stimulus package and expectations EU GDP growth will significantly outpace U.S. GDP growth over the next year. At week’s end the S&P 500 Index decreased 0.3% to 3,215.63, the Nasdaq Composite Index fell 1.3% to 10,363.18, the 10-year U.S. interest rate fell 4 bps to 59bps and the U.S. dollar (as measured by the U.S. Dollar index - DXY) weakened 1.7%.

Gold December futures prices finished the week almost unchanged, moving higher Monday on the back of sharply declining equity prices only to move lower the remainder of the week.  Central bank tightening angst, rising longer-term U.S. interest rates and strong economic reports pressured prices lower through Thursday.  Friday’s much weaker-than-expected U.S. payroll report initially sent gold prices almost 1% higher as investors lowered expectations of imminent Fed tightening only to see those gains erased by the close of U.S. trading with renewed uncertainty regarding changes in U.S. Federal Reserve Bank monetary policy.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending October 8, 2021)

11 October, 2021 | Jeff Klearman
Gold December futures prices finished the week almost unchanged, moving higher Monday on the back of sharply declining equity prices only to move lower the remainder of the week.  Central bank tightening angst, rising longer-term U.S. interest rates and strong economic reports pressured prices lower through Thursday.  Friday’s much weaker-than-expected U.S. payroll report initially sent gold prices almost 1% higher as investors lowered expectations of imminent Fed tightening only to see those gains erased by the close of U.S. trading with renewed uncertainty regarding changes in U.S. Federal Reserve Bank monetary policy.
Oil prices continued to move higher last week with Brent crude oil prices reaching intraday levels of $80/barrel.   Despite larger-than-expected oil and distillate inventory increases (as reported by the EIA Wednesday), oil prices moved higher supported by both production shortages and growing global demand.   OPEC+, which meets this week, continues to have difficulties meeting its agreed upon production levels and is not expected to alter production levels while Hurricane-Ida-hindered Gulf of Mexico production is slowly coming back online.   On the demand side, China announced it will do what is necessary to maintain its energy and power supply implying cost is not an issue while India imports reached a 3-month high.  On top of all this is the skyrocketing cost of natural gas (due to high demand, low inventory levels and production problems) increasing oil demand as a substitute.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending October 1, 2021)

04 October, 2021 | Jeff Klearman
Oil prices continued to move higher last week with Brent crude oil prices reaching intraday levels of $80/barrel.   Despite larger-than-expected oil and distillate inventory increases (as reported by the EIA Wednesday), oil prices moved higher supported by both production shortages and growing global demand.   OPEC+, which meets this week, continues to have difficulties meeting its agreed upon production levels and is not expected to alter production levels while Hurricane-Ida-hindered Gulf of Mexico production is slowly coming back online.   On the demand side, China announced it will do what is necessary to maintain its energy and power supply implying cost is not an issue while India imports reached a 3-month high.  On top of all this is the skyrocketing cost of natural gas (due to high demand, low inventory levels and production problems) increasing oil demand as a substitute.
Up over 1.5% through Wednesday, supported by Evergrande contagion fears and uncertainty surrounding the 2-day FOMC meeting, gold futures prices (December expiration) dropped 1.6% Thursday as contagion fears abated and investors digested Wednesday’s FOMC announcement. Wednesday’s FOMC announcement indicated the Fed would likely begin tapering November (with bond buybacks to be eliminated by June next year) with at least one rate hike in 2022 followed by another 2-3 hikes in 2023.  10-year U.S Treasury rates, down 6bps through Wednesday, jumped 13bps Thursday, contributing to the weakness in gold prices.  Nonetheless, 10-year real yields remain near historical lows, closing near -90bps Friday.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending September 24, 2021)

27 September, 2021 | Jeff Klearman
Up over 1.5% through Wednesday, supported by Evergrande contagion fears and uncertainty surrounding the 2-day FOMC meeting, gold futures prices (December expiration) dropped 1.6% Thursday as contagion fears abated and investors digested Wednesday’s FOMC announcement. Wednesday’s FOMC announcement indicated the Fed would likely begin tapering November (with bond buybacks to be eliminated by June next year) with at least one rate hike in 2022 followed by another 2-3 hikes in 2023.  10-year U.S Treasury rates, down 6bps through Wednesday, jumped 13bps Thursday, contributing to the weakness in gold prices.  Nonetheless, 10-year real yields remain near historical lows, closing near -90bps Friday.
Oil prices moved sharply higher last week bolstered by slow restoration of Hurricane Ida-related shutdowns and a much larger-than-expected drawdown in U.S. oil inventories as reported by the EIA Wednesday.  Concerns Hurricane Nicholas could disrupt production fell by the wayside after the storm passed without affecting production or mining capabilities. Up over 4% through Thursday, WTI crude oil prices fell ¾ percent Friday following reports Gulf of Mexico production was increasing.  Oil prices gains also were capped by weaker Chinese demand, an increase in shale oil rigs and production and a stronger U.S. dollar.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending September 17, 2021)

20 September, 2021 | Jeff Klearman
Oil prices moved sharply higher last week bolstered by slow restoration of Hurricane Ida-related shutdowns and a much larger-than-expected drawdown in U.S. oil inventories as reported by the EIA Wednesday.  Concerns Hurricane Nicholas could disrupt production fell by the wayside after the storm passed without affecting production or mining capabilities. Up over 4% through Thursday, WTI crude oil prices fell ¾ percent Friday following reports Gulf of Mexico production was increasing.  Oil prices gains also were capped by weaker Chinese demand, an increase in shale oil rigs and production and a stronger U.S. dollar.
Despite significantly lower Chinese imports, copper prices ended the week higher supported by steeply falling inventory levels at both the LME and Shanghai exchanges.   Nickel prices, increasing over 7% on the week, moved higher on strong stainless steel- and EV-related demand, production cutbacks in China as well as on falling inventory levels. Increased shipping and power costs have also worked to increase base metal prices.

Topic: Commodities

Publication Type: Market Commentaries

Commoditized Wisdom: Metals & Markets Update (Week Ending September 10, 2021)

13 September, 2021 | Jeff Klearman
Despite significantly lower Chinese imports, copper prices ended the week higher supported by steeply falling inventory levels at both the LME and Shanghai exchanges.   Nickel prices, increasing over 7% on the week, moved higher on strong stainless steel- and EV-related demand, production cutbacks in China as well as on falling inventory levels. Increased shipping and power costs have also worked to increase base metal prices.

The unfortunate reality is that a deep chasm stands between investor income requirements and what conventional strategies can now yield. Alternative Income may help bridge the divide.

Topic: Income

Publication Type: Investment Cases

The Income Blueprint: Potential Strategy for Income Replacement with HIPS

13 October, 2020 | Ryan Giannotto, CFA, Director of Research
The unfortunate reality is that a deep chasm stands between investor income requirements and what conventional strategies can now yield. Alternative Income may help bridge the divide.
Mental accounting is a truly defining feature of the human condition. Find out how much of your income is mental, and how it may prevent you from acheiving your true income goals.

Topic: Alternative Income

Publication Type: Investment Cases

How Much of Your Income is Mental? Overcoming Human Fallacies in Investing

27 March, 2020 | Ryan Giannotto, CFA, Director of Research
Mental accounting is a truly defining feature of the human condition. Find out how much of your income is mental, and how it may prevent you from acheiving your true income goals.
If you thought achieving income yields was difficult, life will only get harder—the Fed that giveth can taketh away. Just as investors were getting accustomed to the taste of at least modestly non-zero rates, expectations have shifted swiftly.

Topic: Alternative Income

Publication Type: Investment Cases

Help! What Happened to My Income?

27 March, 2020 | Ryan Giannotto, CFA, Director of Research
If you thought achieving income yields was difficult, life will only get harder—the Fed that giveth can taketh away. Just as investors were getting accustomed to the taste of at least modestly non-zero rates, expectations have shifted swiftly.
While generating sustainable yield for income investing has never been an easy task, the latest shockwaves to reverberate through interest rate markets have only compounded this challenge. The core of this problem for investors, whether retirees, long-term savers, or anyone looking to diversify their returns, is they are probably looking for yield in all the wrong places.

Topic: Income

Publication Type: Investment Cases

Looking for Yield in All the Wrong Places: 7% Income and How to Get it in Today’s Market

27 March, 2020 | Ryan Giannotto, CFA, Director of Research
While generating sustainable yield for income investing has never been an easy task, the latest shockwaves to reverberate through interest rate markets have only compounded this challenge. The core of this problem for investors, whether retirees, long-term savers, or anyone looking to diversify their returns, is they are probably looking for yield in all the wrong places.
GraniteShares, a disruptive exchange-traded fund (ETF) company, debuted a revised methodology for the index underlying the GraniteShares HIPS US High Income ETF (NYSE Arca: HIPS), a high alternative income-focused fund that invests in a diversified basket of pass-through securities.

Topic: Income

Publication Type: Viewpoints

GraniteShares Revises Index Methodology for HIPS US High Income ETF (HIPS)

27 March, 2020 | GraniteShares
GraniteShares, a disruptive exchange-traded fund (ETF) company, debuted a revised methodology for the index underlying the GraniteShares HIPS US High Income ETF (NYSE Arca: HIPS), a high alternative income-focused fund that invests in a diversified basket of pass-through securities.

The speed and magnitude of technological disruption is relevant because current and future technologies will continue to create winners (i.e., the disruptors) and losers (i.e., the disruptees) among all companies across industries faster than the market may realize.

Topic: XOUT

Publication Type: Investment Cases

The Cost of Underestimating Technological Disruption

06 October, 2021 | GraniteShares
The speed and magnitude of technological disruption is relevant because current and future technologies will continue to create winners (i.e., the disruptors) and losers (i.e., the disruptees) among all companies across industries faster than the market may realize.
When no company or industry is immune from disruptive challenge, perhaps never has the number of potential losers been so plentiful, nor the disparity between winners and losers been so vast. Rather than succumb to conventional wisdom, perhaps the only thing more important than what you put IN your portfolio is what you XOUT.

Topic: XOUT

Publication Type: Investment Cases

How Many Losers Are in the S&P 500?

17 August, 2020 | Ryan Giannotto, CFA, Director of Research
When no company or industry is immune from disruptive challenge, perhaps never has the number of potential losers been so plentiful, nor the disparity between winners and losers been so vast. Rather than succumb to conventional wisdom, perhaps the only thing more important than what you put IN your portfolio is what you XOUT.
XOUT’s methodology counters traditional investment strategies. Rather than trying to pick a select few winners, XOUT flips the investment paradigm by seeking to avoid losers that are failing to adapt amid today’s environment of unprecedented technological change.

Topic: Precious Metals , XOUT

Publication Type: Viewpoints

GraniteShares Launches XOUT U.S. Large Cap ETF (XOUT)

27 March, 2020 | GraniteShares
XOUT’s methodology counters traditional investment strategies. Rather than trying to pick a select few winners, XOUT flips the investment paradigm by seeking to avoid losers that are failing to adapt amid today’s environment of unprecedented technological change.
GraniteShares is an independent, fully funded ETF company headquartered in New York City. GraniteShares’ ETF suite includes one of the lowest-cost physical gold ETFs (BAR), a broad-based commodity ETF (COMB), an ETF that seeks to exclude U.S. large cap companies most likely to suffer from technological disruption over the long term (XOUT), a high alternative income-focused fund that invests in pass-through securities (HIPS) and the lowest-cost* physical platinum ETF (PLTM). GraniteShares has experienced robust growth in 2019, recently surpassing $700 million in total assets under management.

Topic: Precious Metals , Commodity Baskets , Income , XOUT

Publication Type: Investment Cases

GraniteShares Announces Change in ETF Lineup

27 March, 2020 | GraniteShares
GraniteShares is an independent, fully funded ETF company headquartered in New York City. GraniteShares’ ETF suite includes one of the lowest-cost physical gold ETFs (BAR), a broad-based commodity ETF (COMB), an ETF that seeks to exclude U.S. large cap companies most likely to suffer from technological disruption over the long term (XOUT), a high alternative income-focused fund that invests in pass-through securities (HIPS) and the lowest-cost* physical platinum ETF (PLTM). GraniteShares has experienced robust growth in 2019, recently surpassing $700 million in total assets under management.

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