Trump says Iran war "close to over" amid hopes for more negotiations
The stock market continues to oscillate. As an example, the week started with data center stocks getting high with mean reversion algorithms. Then on Tuesday, the stock market resurged on reports that President Trump could end the war with Iran without reopening the Strait of Hormuz. Furthermore, Iran was reportedly allowing additional ships through the Strait of Hormuz but was also demanding payment from some ships. A Kuwait oil tanker was on fire from an apparent missile attack, so passage through the Strait of Hormuz remains precarious, and many insurance companies do not want to incur the war risk that has emerged. Nonetheless, the stock market is oversold, and a relief rally has materialized.
The good news is that earnings season is three weeks away, and we’re going to count on those earnings to dropkick and drive all the stocks higher. Fundamentally superior stocks bend but do not break because of strong underlying forecasted sales and earnings growth.
The oasis amidst any market chaos remains the U.S. dollar as well as gold stocks. Due to the gold stocks that I recommend, many portfolios I manage rose impressively last week. The forecasted sales and earnings for my gold stocks remain strong, and I anticipate that I will continue holding on to these gold stocks for at least several months.
Some of the gold stocks I recommend are Agnico Eagle Mines (AEM), Alamos Gold (AGI), Barrick Mining (B), Compania de Minas Buenaventura (BVN), Coeur Mining (CDE), Centerra Gold (CGAU), Caledonia Mining (CMCL), Eldorado Gold (EGO), Equinox Gold (EQX), Hecla Mining (HL), IAMGold Corporation (IAG), OR Royalties (OR), New Gold (NGD), Idaho Strategic Resources (IDR), Integra Resources (ITRG), Kinross Gold (KGC), SSR Mining (SSRM), Triple Flag Precious Metals (TFPM), and Wheaton Precious Metals (WPM).
A poor March payroll report on Friday and/or private credit default could coax the Fed to cut key interest rates sooner than later, despite the food and energy bubble that has emerged. Fed Chairman Jerome Powell spoke at Harvard University and said he wasn’t worried about inflation and seemed to be more focused on the job market.
I want to assure investors that cooler heads may prevail and the Strait of Hormuz will reopen, since the Iranian Republican Guard Corps (IRGC), the Trump Administration, and the rest of the world need the crude oil, fertilizer, and commodities that travel through the Strait of Hormuz. My prediction of 5% GDP growth may occur as soon as the second quarter due to booming U.S. energy and gold exports that should continue to shrink the trade deficit. Just between a shrinking trade deficit and productivity gains thanks to AI, that is enough to generate 4% annual GDP growth.