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An Alternative Explanation for Today’s Inverted Yield Curve

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Image Credit: Karolina Grabowska


Does a Flat or Inverted Yield Curve Still Indicate Recession?

The shape of the treasury yield curve is one indicator the stock market, bond market, and real estate markets are viewing the economy with pessimism. Historically, conventional wisdom has been that if the market has priced rates lower for longer terms than shorter terms, it indicates economic weakness is expected down the road. This would include lower growth, less demand for borrowing, and at the same time, reduced inflationary pressure.

Current Interest Rates

Currently, US Treasuries maturing in one year, and those maturing in 30 years return approximately the same interest rate. The seven and ten-year terms offer rates lower than maturities, longer and shorter. This flat yield curve which is inverted in the shorter end, offers low yields across all maturities. Can we assume it means bond investors expect slowing growth, low inflation, and low inflation out for decades?


Source: US
Treasury


Current Inflation

The increase in the price for a set basket of goods as measured by the Consumer Price Index (CPI-U) data was up 1.3% for the month of June (9.1% YoY). If inflation were to remain at June’s pace for the next two months (1.3%), the three-month compounded impact would be 3.95%. Much higher than the current three-month treasury yield. In fact, it would be higher than all other yields out through 2052. This suggests the mechanisms pricing the market aren’t looking at inflation expectations in the short term and may not be evaluating the risk in the long term either. Otherwise, within the shortest periods of time (3 months), one would expect the curve to be priced in-line with the most recent inflation numbers.


Source: Peter
G. Peterson Foundation

Using conventional wisdom, with the yield curve as a gauge, one would surmise the market expects that inflation will drop by half of the 1.3% it recorded in June over the next month.  If this is true, then the short end and perhaps the long end is priced appropriately. That is until one looks at the added supply that has already been added to treasuries outstanding and that which is expected to enter the market. The increased supply, based on conventional wisdom, should increase the yields needed to sell all the bonds. That’s how supply-demand pressures work.

Unconventional Yield Curve Pricing

The yield curve as an indicator of future economic expectations may be broken.

The U.S. has amassed $30,515,000,000,000. In debt. Put another way, if every single person (not household) split this debt burden in order to pay it off tomorrow, they each would owe $91,668. This is approximately double the amount it had been ten years ago, and it is now higher than GDP. As depicted in the chart below, if you go back ten years to 2012, a period with deflationary concerns, there was a yield difference between two-year and ten-year treasuries of plus 1.25%. Today it is negative 0.19% even though there is record inflation and less ability to pay the debt. Plus all rates on the upward sloping curve were higher in 2012 than they are now. Should two-year and ten-year maturities be inverted? Should rates across the curve be lower now even though there are not the same deflationary concerns?


Source: St. Louis Federal Reserve Bank


What May Be Shaping the Curve

One possible answer is the (bond) market believes the US will be driven into such a deep recession that inflation drops to near zero within the next few months. There is no evidence of this in any leading indicators, including the stock market. So we’ll look to see if there is something else skewing the normal pricing mechanisms?

Since May of 2020, the Fed has been controlling interest rates along the entire curve by something they call Yield Curve Control (YCC). The chart below shows the Fed’s holding of US debt increased by $5 trillion from 2020 until today. Much of this was to manipulate the yield curve as they openly announced they would do in May 2020. It was part of their quantitative easing plan which continued into the second quarter of this year.

The Fed is now raising overnight rates quickly. A massive amount of debt in the mid and longer parts of the curve is still being held by the Fed and being unwound at a pace of less than $50 billion per month with the promise of accelerating that in pace September.


Source: St. Louis Federal Reserve Bank

It makes sense that the (bond) market reaction, which includes a flight to quality into US dollar-denominated securities, is not pushing longer rates steeply upward. Despite an annual inflation rate that is higher than it has been in 40 years (treasuries were paying 13% in 1982), the bond market is inverted and hasn’t sold off significantly. This cycle it can’t sell off too much because the largest holder, by far, is not market driven. It is the Fed and is using unconventional policy announced two years ago. So the results don’t follow convention.

Are We Headed Toward a Recession?

The yield curve is slightly inverted. A steep inversion has in the past been a reliable indicator of a recession ahead. As an indicator, today’s yield curve can be expected to be far less accurate than in the past. This is because the Federal Reserve has, up until very recently, been buying treasuries to stimulate the economy and help shape the yield curve. The lowest part of the curve, one year and longer, is the 10-year Treasury note. This is the rate that 30-year mortgages are spread off of; should that rise too quickly, the housing market may fall at an uncomfortable pace.

The economy may very well be in a recession or enter one in the coming months. If it does, the current signs of this happening are less likely to be found in the yield curve than at any other time in US history.

Paul Hoffman

Managing Editor, Channelchek

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The Yield Curve as a Leading Indicator Has Been Compromised

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How Much is a Trillion?

Yield Curve Control, Stock Prices, and Trust (June 2020)


Sources

https://fiscaldata.treasury.gov/datasets/debt-to-the-penny/debt-to-the-penny

https://www.pgpf.org/national-debt-clock#:~:text=The%20%2430%20trillion%20gross%20federal,that%20it%20owes%20to%20itself.

https://fred.stlouisfed.org/series/T10Y2Y

https://research.stlouisfed.org/

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Release – NexusBioAg and MustGrow Biologics Announce Exclusive Marketing and Distribution Agreement in Canada

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NexusBioAg and MustGrow Biologics Announce Exclusive Marketing and Distribution Agreement in Canada

Research, News, and Market Data on MustGrow Biologics

Collaboration expands
innovative, sustainable and regenerative farming solutions for Canadian growers

Downers Grove, ILL. & SASKATOON, SASK. — July 20, 2022 — Univar Solutions Inc. (NYSE: UNVR) (“Univar
Solutions“),  a leading global solutions provider to users of specialty ingredients and chemicals, announced today that NexusBioAg, a division of Univar Solutions, and MustGrow Biologics Corp. (CSE: MGRO) (OTC: MGROF) (FRA: 0C0) (“MustGrow“), an agricultural biotechnology company focused on providing science-based biological solutions for high-value crops, have reached an exclusive marketing and distribution agreement in the Canadian canola and pulse market for TerraMG™, a mustard-derived soil biopesticide technology. The addition of this plant-based technology further diversifies and expands NexusBioAg’s extensive portfolio of inoculants, micronutrients, nitrogen stabilizers and foliars for the Canadian agricultural market.

In 2021, NexusBioAg and MustGrow initiated a field research program to develop MustGrow’s sustainable farming technology in Canadian canola and pulse crops. This technology has the potential to address the agronomic challenges of ClubRoot and Aphanomyces diseases which impact these crops. Building on the past data, the companies now are moving forward to the next stage of the development process. Through this exclusive marketing and distribution agreement, NexusBioAg customers have access to the latest in agronomic innovation, which is yet to be registered with Canada’s Pest Management Regulatory Agency.

“TerraMG complements the NexusBioAg portfolio and we are excited to add this technology to our growing product offering. As the sole distributor of TerraMG in Canada for use in canola and pulse crops, this agreement further reinforces NexusBioAg’s commitment to collaborating with leading manufacturers to launch innovative, sustainable and cutting-edge solutions that provide value to the Canadian agricultural industry and benefit its growers,” said Matthew Ottaway, senior vice president, global consumer solutions for Univar Solutions.

NexusBioAg is committed to launching innovative, cutting-edge products, with a focus on sustainability and regenerative agriculture, which benefit the Canadian agricultural industry and growers. MustGrow specializes in the research and development of organic biopesticides, harnessing the mustard seed’s natural defense mechanism with a technology that has the potential to control diseases, pests and weeds. Combining the proficiencies of both companies in the agriculture market will help Canadian growers benefit from innovative and sustainable farming solutions.

“We are very pleased to partner with an organization like NexusBioAg. Their team’s technical and commercial expertise is unparalleled and will be advantageous in accelerating the development and growth of TerraMG for use in Canadian canola and pulse crops. The NexusBioAg team has tremendous knowledge of the Canadian agriculture market as well as sustainable farming solutions. We look forward to commercializing this biopesticide technology in the Canadian market together,” remarked MustGrow COO Colin Bletsky.

For more information about NexusBioAg’s crop nutrition solutions, please visit nexusbioag.com. To learn more about TerraMG™, visit mustgrow.ca.

About Univar Solutions
Univar Solutions (NYSE: UNVR) is a leading global chemical and ingredient distributor representing a premier portfolio from the world’s leading producers. With the industry’s largest private transportation fleet and technical sales force, unparalleled logistics know-how, deep market and regulatory knowledge, formulation and recipe development, and leading digital tools, Univar Solutions is well-positioned to offer tailored solutions and value-added services to a wide range of markets, industries, and applications. While fulfilling its purpose to help keep communities healthy, fed, clean and safe, Univar Solutions is committed to helping customers and suppliers innovate and focus on Growing Together. Learn more at univarsolutions.com.

About NexusBioAg
Univar Solutions’ NexusBioAg provides an expanded portfolio of crop nutrition solutions, including industry-leading inoculants, micronutrients, nitrogen stabilizers, and foliar products. With a diverse collection of inventory and logistics experts, procurement, customer service, agronomists, and sales and marketing experts, NexusBioAg strives to help meet increasingly unique agricultural businesses’ needs. Through these best-in-class capabilities, a collaborative team-oriented approach, and a commitment to agricultural integrity, NexusBioAg is helping customers innovate and grow. Learn more at NexusBioAg.com.

About MustGrow
MustGrow is an agriculture biotech company developing organic biopesticides and bioherbicides by harnessing the natural defense mechanism of the mustard plant to protect the global food supply from diseases, insect pests, and weeds. MustGrow and its leading global partners — Janssen (pharmaceutical division of Johnson & Johnson), Bayer, Sumitomo Corporation, and Univar Solutions’ NexusBioAg — are developing mustard-based organic solutions to potentially replace harmful synthetic chemicals. Over 100 independent tests have been completed, validating MustGrow’s safe and effective approach to crop and food protection. Pending regulatory approval, MustGrow’s patented liquid products could be applied through injection, standard drip or spray equipment, improving functionality and performance features. Now a platform technology, MustGrow and its global partners are pursuing applications in several different industries from preplant soil treatment and weed control, to postharvest disease control and food preservation. MustGrow has approximately 49.2 million basic common shares issued and outstanding and 55.1 million shares fully diluted. For further details please visit mustgrow.ca.  

Univar Forward-Looking Statements
This press release includes certain statements relating to future events and Univar Solutions’ intentions, beliefs, expectations, and predictions for the future, which are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond Univar Solutions’ control. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions. A detailed discussion of these factors and uncertainties is contained in Univar Solutions’ filings with the Securities and Exchange Commission. Potential factors that could affect such forward-looking statements include, among others: the ultimate geographic spread of the COVID-19 pandemic; the duration and severity of the COVID-19 pandemic; actions that may be taken by governmental authorities to address or otherwise mitigate the impact of the COVID-19 pandemic; the potential negative impacts of COVID-19 on the global economy and Univar Solutions’ customers and suppliers; the overall impact of the COVID-19 pandemic on Univar Solutions’ business, results of operations and financial condition; other fluctuations in general economic conditions, particularly in industrial production and the demands of Univar Solutions’ customers; significant changes in the business strategies of producers or in the operations of Univar Solutions’ customers; increased competitive pressures, including as a result of competitor consolidation; significant changes in the pricing, demand and availability of chemicals; Univar Solutions’ levels of indebtedness, the restrictions imposed by Univar Solutions’ debt instruments, and Univar Solutions’ ability to obtain additional financing when needed; the broad spectrum of laws and regulations that we are subject to, including extensive environmental, health and safety laws and regulations; an inability to integrate the business and systems of companies we acquire, including of Nexeo Solutions, Inc., or to realize the anticipated benefits of such acquisitions; potential business disruptions and security breaches, including cybersecurity incidents; an inability to generate sufficient working capital; increases in transportation and fuel costs and changes in Univar Solutions’ relationship with third party providers; accidents, safety failures, environmental damage, product quality and liability issues and recalls; major or systemic delivery failures involving Univar Solutions’ distribution network or the products we carry; operational risks for which we may not be adequately insured; ongoing litigation and other legal and regulatory risks; challenges associated with international operations; exposure to interest rate and currency fluctuations; potential impairment of goodwill; liabilities associated with acquisitions, ventures and strategic investments; negative developments affecting Univar Solutions’ pension plans and multi-employer pensions; labor disruptions associated with the unionized portion of Univar Solutions’ workforce; and the other factors described in Univar Solutions’ filings with the Securities and Exchange Commission. We caution you that the forward-looking information presented in this press release is not a guarantee of future events or results and that actual events or results may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Any forward-looking information presented herein is made only as of the date of this press release, and Univar Solutions does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.

MustGrow Forward-Looking Statements
Certain statements included in this news release constitute “forward-looking statements” which involve known and unknown risks, uncertainties and other factors that may affect the results, performance or achievements of MustGrow.

Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “occur” or “be achieved”. Examples of forward-looking statements in this news release include, among others, statements MustGrow makes regarding: (i) potential product approvals; (ii) anticipated actions by partners to drive field development work including dose rates, application frequency, application methods, and the regulatory work necessary for commercialization; (iii) expected product efficacy of MustGrow’s mustard-based technologies; and (iv) expected outcomes from collaborations with commercial partners.

Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of MustGrow to differ materially from those discussed in such forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, MustGrow. Important factors that could cause MustGrow’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) the preferences and choices of agricultural regulators with respect to product approval timelines; (ii) the ability of MustGrow’s partners to meet obligations under their respective agreements; and (iii) other risks described in more detail in MustGrow’s Annual Information Form for the year ended December 31, 2021 and other continuous disclosure documents filed by MustGrow with the applicable securities regulatory authorities which are available at www.sedar.com. Readers are referred to such documents for more detailed information about MustGrow, which is subject to the qualifications, assumptions and notes set forth therein.

This release does not constitute an offer for sale of, nor a solicitation for offers to buy, any securities in the United States.

Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.

© 2022 MustGrow Biologics Corp. All rights reserved. 

 


Release – TheStreet Partners With QuoteMedia to Advance Stock Research Tools and Streaming Solutions

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TheStreet Partners With QuoteMedia to Advance Stock Research Tools and Streaming Solutions

Research, News, and Market Data on QuoteMedia

PHOENIX, July 20, 2022 (GLOBE NEWSWIRE) — QuoteMedia, Inc. (OTCQB: QMCI), a leading provider of market data and financial applications, announces today that they have partnered with The Arena Group (NYSE American: AREN) to provide financial market data and hosted content visualizations for their flagship financial destination, TheStreet.com .

To enhance access for a younger and more diverse reader, QuoteMedia’s QMod Suite of responsive market data widgets will integrate data and content across TheStreet.com while optimizing the display for viewing on all types of desktop and mobile devices. Licensed QuoteMedia content includes Equities, Options, Funds and Global Indices data, as well as a wide array of News, Fundamentals, Charting, Analytics and Transactional Portfolio modules to assist in managing TheStreet.com’s subscription products.

“TheStreet.com is one of the most important financial destinations in the world, and it has been for over 20 years,” said Dave Shworan, CEO of QuoteMedia Ltd. “It has been a trusted source of reliable, informative and objective business news and market analysis for decades. Having TheStreet choose QuoteMedia as their data provider is gratifying for our company, and we are very excited to be working with them.”

About The Arena Group
The Arena Group creates robust digital destinations that delight consumers with powerful journalism and news about the things they love – their favorite sports teams, advice on investing, the inside scoop on personal finance, and the latest on lifestyle essentials. With powerful technology, editorial expertise, data management, and marketing savvy, the transformative company enables brands like Sports Illustrated, TheStreet and Parade to deliver highly relevant content and experiences that consumers love. To learn more, visit www.thearenagroup.net.

About TheStreet
TheStreet is a leading digital financial media company. We provide our readers and advertisers with a variety of subscription-based and advertising-supported content and tools through a range of online platforms, including websites, mobile devices, email services, widgets, blogs, podcasts and online video channels.

Media Contacts:
Rachael Fink
Public Relations Manager, The Arena Group
Rachael.Fink@thearenagroup.net

About QuoteMedia
QuoteMedia is a leading software developer and cloud-based syndicator of financial market information and streaming financial data solutions to media, corporations, online brokerages, and financial services companies. The Company licenses interactive stock research tools such as streaming real-time quotes, market research, news, charting, option chains, filings, corporate financials, insider reports, market indices, portfolio management systems, and data feeds. QuoteMedia provides industry leading market data solutions and financial services for companies such as the Nasdaq Stock Exchange, TMX Group (TSX Stock Exchange), Canadian Securities Exchange (CSE), London Stock Exchange Group, FIS, U.S. Bank, Broadridge Financial Systems, JPMorgan Chase, CI Financial, Canaccord Genuity Corp., Hilltop Securities, HD Vest, Stockhouse, TheStreet.com, Zacks Investment Research, The Motley Fool, General Electric, Boeing, Bombardier, Telus International, Business Wire, PR Newswire, FolioFN, Regal Securities, ChoiceTrade, Cetera Financial Group, Dynamic Trend, Inc., Qtrade Financial, CNW Group, IA Private Wealth, Ally Invest, Inc., Suncor, Virtual Brokers, Leede Jones Gable, Firstrade Securities, Charles Schwab, First Financial, Cirano, Equisolve, Stock-Trak, Mergent, Cision, Day Trade Dash and others. Quotestream®, QMod™ and Quotestream Connect™ are trademarks of QuoteMedia. For more information, please visit www.quotemedia.com .

QuoteMedia Investor Relations
Brendan Hopkins
Email: investors@quotemedia.com
Call: (407) 645-5295

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News Provided by GlobeNewswire via QuoteMedia


Release – Growth Of Direct Digital Holdings’ Colossus SSP Reflects Strong Results Generated For Multicultural And General Market Publishers and Leading Brands

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Growth Of Direct Digital Holdings’ Colossus SSP Reflects Strong Results Generated For Multicultural And General Market Publishers and Leading Brands

Research, News, and Market Data on Direct Digital Holdings

SSP Kicked Off
2022 With Significant Revenue Growth – Q1 2021 vs Q1 2022 Marks 540% Upswing –
Driven by Diverse Marketplace Approach & Opportunity for Marketers to
Invest in Under-Represented Communities

HOUSTON, July 20, 2022 /PRNewswire/ — Direct Digital Holdings (Nasdaq: DRCT) announced today that its supply-side advertising platform, Colossus SSP, had a strong first quarter, with comparisons between Q1 2021 to Q1 2022 showing a 540 percent surge in revenue. This uptick comes on the heels of year-over-year revenue growing by 330 percent between 2020 and 2021, as well as a triple digit increase the previous year, with the platform’s revenue rising by 235 percent between 2019 and 2020. Leadership credits the dramatic growth to the company’s commitment to normalize diversity in the field of programmatic advertising – delivering multicultural and general market audiences at scale. In addition, it points to several brands living up to their promises to support under-represented communities in their media buys.

Direct Digital Holdings logo (PRNewsfoto/Direct Digital Holdings)

“Colossus SSP’s approach has always been one of inclusivity, bringing together a diverse set of audiences – Black, Hispanic, Asian, LGBTQ, and more – alongside general market, to serve as a one-stop-shop for advertisers who want to reach a cross-section of consumers,” said Lashawnda Goffin, CEO, Colossus SSP. “Not only has this allowed savvy marketers the opportunity to reach a vibrant range of consumers, but it has helped them increase investment in minority-owned media properties that have often been left out of the programmatic mix. Moreover, by putting their budgets to work to support multicultural voices, these brands are seeing remarkable results in meeting critical KPIs.”

The number of brands and media agencies tapping into Colossus SSP’s inclusive audience approach rose by 87 percent comparing Q1 2021 to Q1 2022, with clients such as Bayer, HP, and the NBA coming on board.

“At Bayer, we believe everyone should have the opportunity to live the healthiest life possible, and that we have a responsibility to make our vision of Health for All, Hunger for None a reality,” said Gary Guarnaccia, Head of Platform & Publisher Investment, Bayer Consumer Health, North America. “Partnering with Colossus SSP and their growing marketplace of diverse content and minority-owned publishers has enabled our in-house digital media buying team to expand our reach to consumers with important information about our healthcare products and brands, such as Aleve, Midol and One-A-Day.”

In lockstep with demand, in Q1 2022 Colossus SSP significantly expanded its publisher inventory supply. Currently Colossus SSP makes over approximately 90 billion impressions available each month with a diverse audience marketplace that includes over 13,000 sites and apps.

Blavity Inc, a market leader for Black media, reaching over 100 million millennials per month, began working with Colossus SSP in January 2020 and over the course of the following two years saw a 7-fold increase in revenues derived from the partnership.

“Colossus SSP has proven to be a valuable partner, one that has a deep understanding of publishers – especially multicultural publishers – as well as the media and marketing landscape at large,” said Orchid Richardson, Senior Vice President of Digital, Blavity Inc. “After two years of exponential growth, we are on track to see revenues from our relationship with Colossus SSP rise at a steady clip – if not outpace.”

“Colossus SSP’s rapid growth is a testament to its distinct approach to diversity, technology and the dynamic team that Lashawnda Goffin has been able to build,” said Mark Walker, CEO, Direct Digital Holdings. “Marketers are experiencing the benefits through multiple ROI metrics and subsequently publisher partners are experiencing significant growth in revenues. It’s a win-win situation.”

About Direct Digital Holdings
Direct Digital Holdings (Nasdaq: DRCT) brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. The holding group’s Sell-side platform Colossus SSP offers advertisers of all sizes extensive reach within general market and multicultural media properties. Its operating companies Huddled Masses and Orange142 deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from energy to healthcare and travel to financial services. Direct Digital Holdings’ sell- and buy-side solutions manage approximately 70,000 clients monthly, generating over 90 billion impressions per month across display, CTV, in-app, and other media channels. The company has been named a top minority-owned business by The Houston Business Journal (“HBJ”).

About Colossus SSP
Part of Direct Digital Holdings (Nasdaq: DRCT), Colossus SSP is a leading custom supply-side platform (SSP) that delivers a diverse marketplace, enabling programmatic media buyers to connect with multicultural and general market audiences at scale. Colossus SSP’s consulting arm provides brands of all sizes with meaningful insights and actionable guidance for reaching curated audiences.  For more information, visit www.colossusmediassp.com.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/growth-of-direct-digital-holdings-colossus-ssp-reflects-strong-results-generated-for-multicultural–general-market-publishers-and-leading-brands-301590136.html

SOURCE Direct Digital Holdings

 


Release – Motorsport Games Brings Two Titles to NVIDIA GeForce NOW

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Motorsport Games Brings Two Titles to NVIDIA GeForce NOW

Research, News, and Market Data on Motorsport Games

NASCAR 21: IGNITION AND KARTKRAFT JOINED THE CLOUD GAMING
SERVICE THIS MONTH

MIAMI, July 20, 2022 (GLOBE NEWSWIRE) —  Motorsport Games Inc. (NASDAQ:
MSGM) (“Motorsport Games”), a leading racing game developer, publisher and esports ecosystem provider of official motorsport racing series throughout the world, announced today that two of its games have been released on 
GeForce NOW, NVIDIA’s (NASDAQ: NVDA) cloud-based game streaming service. NASCAR 21: Ignition and KartKraft joined GeForce NOW’s robust library of over 1,300 games and are now available to be played via the cloud. This marks the first set of Motorsport Games titles to come to GeForce NOW, kicking off with two of the publisher’s most popular games on the market.

“Our objective is to make the thrill of motorsports accessible to everyone and bring great player-first experiences to fans wherever they are,” said Dmitry Kozko, CEO of Motorsport Games. “Making our NASCAR and Karting games available on GeForce NOW allows fans to enjoy our games even on certain Samsung TVs without a console. We cannot wait for our players to try out this new experience and are excited to work with NVIDIA, an innovative company that continues to push gaming forward.”

“GeForce NOW’s extensive library is growing rapidly and our players can now get their hands on two of Motorsport Games’ biggest titles to get behind the wheel in some of the most exciting racing games available,” said 
Phil Scott, Director of Developer Relations, Europe at NVIDIA. “Whether on the go or in the comfort of their own homes, players can experience the best cloud gaming experience on the market today through GeForce NOW – which redefines how gaming can work as it transforms nearly any device, including smartphones, laptops and tablets, into PC gaming rigs.”

As a part of GeForce NOW, NASCAR 21: Ignition and KartKraft are accessible to be streamed and played via PCs, Macs, mobile devices, newly added 2022 Samsung TVs and more. More gamers than ever can now experience the officially licensed stock car series game and the realistic karting title. The addition to GeForce NOW also marks the first time 
KartKraft will be available on a platform other than PC. Gamers on GeForce NOW are playing the full PC version of the game available on Steam, streaming it to nearly any of their devices. This addition also falls in line with Motorsport Games’ goal of providing each of its players with more choice while gaming, as its games will now be accessible on more devices than ever.

About Motorsport Games:
Motorsport Games, a Motorsport Network company, is a leading racing game developer, publisher and esports ecosystem provider of official motorsport racing series throughout the world. Combining innovative and engaging video games with exciting esports competitions and content for racing fans and gamers, Motorsport Games strives to make the joy of racing accessible to everyone. The Company is the officially licensed video game developer and publisher for iconic motorsport racing series across PC, PlayStation, Xbox, Nintendo Switch and mobile, including NASCAR, INDYCAR, 24 Hours of Le Mans and the British Touring Car Championship (“BTCC”), as well as the industry leading rFactor 2 and KartKraft simulations. RFactor 2 also serves as the official sim racing platform of Formula E. Motorsport Games is an award-winning esports partner of choice for 24 Hours of Le Mans, Formula E, BTCC, the FIA World Rallycross Championship and the eNASCAR Heat Pro League, among others. Motorsport Games is building a virtual racing ecosystem where each product drives excitement, every esports event is an adventure and every story inspires.

Forward-Looking Statements:
Certain statements in this press release which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements in this press release, the related conference call and webcast that are not statements of historical fact may be deemed forward-looking statements. Words such as “continue,” “will,” “may,” “could,” “should,” “expect,” “expected,” “plans,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the expected future impact of new or planned products, features or offerings and the timing of launching such products, features and offerings. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Motorsport Games and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to difficulties, delays in or unanticipated events that may impact the timing and scope of new product launches. Factors other than those referred to above could also cause Motorsport Games’ results to differ materially from expected results. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in Motorsport Games’ filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, its Quarterly Reports on Form 10-Q filed with the SEC during 2022, as well as in its subsequent filings with the SEC. Motorsport Games anticipates that subsequent events and developments may cause its plans, intentions and expectations to change. Motorsport Games assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Motorsport Games’ plans and expectations as of any subsequent date. Additionally, the business and financial materials and any other statement or disclosure on, or made available through, Motorsport Games’ website or other websites referenced or linked to this press release shall not be incorporated by reference into this press release.

Website and Social Media Disclosure:
Investors and others should note that we announce material financial information to our investors using our investor relations website (ir.motorsportgames.com), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media and blogs, to communicate with our investors and the public about our company and our products. It is possible that the information we post on our websites, social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the websites, social media channels and blogs, including the following (which list we will update from time to time on our investor relations website):

Websites

Social Media

motorsportgames.com

Twitter: @msportgames & @traxiongg

traxion.gg

Instagram: msportgames & traxiongg

motorsport.com

Facebook: Motorsport Games & traxiongg

 

LinkedIn: Motorsport Games

 

Twitch: traxiongg

 

Reddit: traxiongg

The contents of these websites and social media channels are not part of, nor will they be incorporated by reference into, this press release.

Press:
ASTRSK PR
motorsportgames@astrskpr.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/49e60580-db46-4507-b27c-160ff59a4ec0


Release – Kratos Awarded Contract from U.S. Army Future Command to Demonstrate Military SATCOM Modernization

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Kratos Awarded Contract from U.S. Army Future Command to Demonstrate Military SATCOM Modernization

Research, News, and Market Data on Kratos Defense & Security Solutions

Built on Kratos’ OpenSpace
Virtual Ground System Platform, will Support Interoperability, Multi-Mission
Support and Vendor Neutrality

SAN DIEGO, 
July 20, 2022 (GLOBE NEWSWIRE) — 
Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a leading National Security Solutions provider, announced today that it was awarded a contract from the 
U.S. Army’s Combat Capabilities Development Command to demonstrate a virtualized SATCOM ground system. Based upon Kratos’ OpenSpace Platform, the solution will enable the government to field SATCOM networks in line with modernization goals including streamlining gateway and remote terminal capabilities supported by multiple vendors, reducing life-cycle costs and supporting adaptive, dynamic space operations. Funding for this award was through the Network Command, Control, Communication, and Intelligence Cross-Functional Team (N-CFT) established by the Army’s Future Command.

Supporting a “fighting SATCOM” strategy, future military satellite communications (MilSatCom) networks will require dynamic capabilities such as resiliency, the ability to adapt to suddenly changing mission conditions on the fly and the ability quickly spin up and spin down resources for multi-mission support. Today’s hardware-based networks cannot deliver the speed, interoperability or agility to meet these goals, a situation that is driving digital transformation and modernization efforts across the space industry.

Kratos’ OpenSpace Platform is the only fully-orchestrated, COTS satellite ground system architected on modern, software-defined networking (SDN) principles. OpenSpace digitizes the RF signals flowing to and from satellites so they can be processed and managed in virtual environments such as the cloud. This means applications can be instantiated faster, support multiple missions and orbits, react on-the-fly to changing conditions and operate at lower cost. For example, space network components that typically take weeks or even months to implement in today’s hardware-based world are replaced by virtual network functions (VNF) that can be stood up in just minutes with the OpenSpace Platform. Because it is based on accepted industry standards, OpenSpace is compatible with standards compliant network resources from other companies, assuring interoperability and avoiding vendor lock-in.

Chris Badgett, Vice President of Technology for Kratos Space said, “A strategic goal of the military is to operate an integrated SATCOM enterprise, which increases assured SATCOM access for the warfighter and improves the effectiveness of the infrastructure by enhancing resilience. Kratos’ OpenSpace Platform will show how critical satellite network operations can be made interoperable across domains.”

About Kratos
Defense & Security Solutions
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms and systems for United States National Security related customers, allies and commercial enterprises. Kratos is changing the way breakthrough technology for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research and streamlined development processes. At Kratos, affordability is a technology and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training, combat systems and next generation turbo jet and turbo fan engine development. For more information go to 
www.KratosDefense.com.

Notice Regarding Forward-Looking Statements
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Kratos and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended 
December 26, 2021, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the 
SEC by Kratos.

Press Contact: Yolanda White 858-812-7302 Direct

Investor Information:
877-934-4687

investor@kratosdefense.com

Source: Kratos Defense & Security Solutions, Inc.

 


Why the ARK Invest ESG Fund will Close by August 2022

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Image: ARK Funds


Cathie Wood is Unwinding One of Her Firm’s Nine Funds

On August 31, 2021, ARK Invest, run by Cathie Wood, filed with the SEC to create her company’s first indexed-based fund. Up until then, all ARK funds were managed by the founder and Chief Investment Officer. Yesterday it was announced the fund will close by the end of July 2022. The ETF, Transparency Global (CRTU), an ESG inspired fund based on The Transparency Index™ (TRANSPCY), will have opened, then closed in less than a year.

Fund Description

The ARK Transparency ETF held companies deemed to be the 100 most transparent companies globally by the index provider. The top five holdings included Teledoc (TDOC), Spotify (SPOT), Bill.com (BILL), Netflix (NFLX), and Acushnet (GOLF). Each of the top five represented about 1% of the fund. The ARK website explains the principle behind the fund in this way, “ARK believes that transparency enhances the performance of companies while benefiting the well-being of people. Transparency implies openness, communication, accountability, and trust.”

The ARK Transparency ETF, which was launched in December, will close later this month, according to a regulatory filing. ARK currently has nine ETFs, including the transparency fund. This is the only fund of ARK’s nine ETFs that is not managed but instead index based. The ARK Transparency ETF followed an index developed by Solactive, a German-based financial index provider, and tracked by Transparency Global.

In early summer Transparency Global told ARK it would no longer calculate the ETF’s underlying benchmark after July.

Fund History

It was
reported when the fund was announced last year that Cathie Wood, the founder of ARK Invest, believes that while this carve-out index has many of the same attributes of popular ESG funds, the transparency screen could provide superior performance. The Ark application to register the then new fund came at a time when there was a massive appetite for ESG investing. At the time, ESG funds were on track for a record year of inflows after amassing $21 billion 

The Transparency fund had accumulated $12 million in assets and had fallen nearly 36% since its inception, according to FactSet. Some of the fund’s largest holdings included Teladoc Health Inc. and Bill.com Holdings Inc., which are both down about 50% this year.

The transparency fund will no longer accept creation units after Thursday and will cease trading on the Cboe BZX Exchange after July 26, according to a statement from the firm.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://www.bloomberg.com/news/articles/2022-07-19/cathie-wood-s-ark-shutters-transparency-etf-in-first-closure

https://etfs.ark-funds.com/hubfs/1_Download_Files_ETF_Website/Prospectuses/ARK%20ETF%20Prospectus%2011.12.21%2021.pdf

https://www.sec.gov/Archives/edgar/data/1579982/000110465921111628/tm2126418d1_485apos.htm

https://transparency.global/transparency-index/

https://www.wsj.com/articles/cathie-woods-ark-to-close-transparency-etf-11658273924?mod=hp_lead_pos12

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The GEO Group (GEO) – Maturity Wall Removed, But at What Cost?

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Wednesday, July 20, 2022

The GEO Group (GEO)
Maturity Wall Removed, But at What Cost?

The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Maturity Wall. The GEO Group has entered into a series of proposed transactions with certain of its secured and unsecured creditors that will, if completed, comprehensively address the substantial majority of the Company’s debt maturity wall. This should remove a significant near-term concern of investors and GEO shares reacted as expected, rising 8.50% yesterday.

Details. Recall, GEO has $278 million of debt payments in 2023 and $1.77 billion of repayments in 2024. Although the operating environment has turned favorable, limited capital markets access makes it unlikely GEO would be able to refinance the debt as it came due. The proposed transactions push the maturity wall out far enough that we believe GEO should be able to successfully refinance any debt that remains outstanding….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Maple Gold Mines (MGMLF) – Geophysical Survey Underscores Growing Resource Potential

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Wednesday, July 20, 2022

Maple Gold Mines (MGMLF)
Geophysical Survey Underscores Growing Resource Potential

Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Geophysical survey results identify new target areas. Maple Gold announced results from a regional airborne magnetic and electromagnetic survey across 278 square kilometers of its joint venture-controlled ground, including the western half of the Douay gold project and the entire Joutel gold project. The survey identified several underexplored target areas and additional targets for follow-up drilling at both Douay and Joutel. The Mag-EM survey results revealed additional targets, not only in the Eagle-Telbel mine area, but also on the greater Douay property where the company identified volcanogenic massive sulfide (VMS) targets in 2018.

Four target areas are underexplored. Multiple anomalies revealed in the survey were categorized into four target areas including: 1) Joutel targets that include several EM anomalies within two to three kilometers of the historical Eagle, Telbel and Eagle West deposits where drilling has been limited, 2) Southeast targets that occur along the largely undrilled Douay-Joutel property boundary, 3) Central targets at Douay to the west of the mineral resource area, and 4) Northwest targets at Douay that are associated with an intrusive-like magnetic anomaly that is over 2 kilometers wide. The central targets at Douay partly coincide and extend beyond VMS copper-zinc-(gold) anomalies identified by the company in 2018….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Engine Gaming and Media (GAME) – Navigating Troubled Waters

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Wednesday, July 20, 2022

Engine Gaming and Media (GAME)
Navigating Troubled Waters

Engine Gaming and Media, Inc. (NASDAQ:GAME) (TSX-V:GAME) provides premium social sports and esports gaming experiences, as well as unparalleled data analytics, marketing, advertising, and intellectual property to support its owned and operated direct-to-consumer properties, while also providing these services to enable its clients and partners. The company’s subsidiaries include Stream Hatchet, the global leader in gaming video distribution analytics; Sideqik, a social influencer marketing discovery, analytics, and activation platform; WinView Games, a social predictive play-along gaming platform for viewers to play while watching live events; and Frankly Media, a digital publishing platform used to create, distribute and monetize content across all digital channels. Engine Media generates revenue through a combination of direct-to-consumer fees, streaming technology and data SaaS-based offerings, and programmatic advertising. For more information, please visit www.enginegaming.com.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Fiscal Q3 results. The company reported Q3 revenue of $9.2 million, which reflected the absence of recently divested businesses. The underlying trends of its existing businesses were strong, with double digit revenue growth and a 5% sequential quarterly revenue improvement from Q2. Adj. EBITDA was a loss of $5.1 million, which did not fully reflect the recent cost cutting initiatives.

Growing SaaS businesses. The company’s SaaS revenue grew 22% YoY to $2 million. Notably, both Stream Hatchet and Sideqik signed extensions to represent major brands during the quarter. Active clients of Stream Hatchet increased 27% in the quarter, while Sideqik’s active client base grew 10%.

…

This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Eskay Mining Corp. (ESKYF) – Multiple Precious Metal VMS Discoveries Underscore District-Scale Potential

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Wednesday, July 20, 2022

Eskay Mining Corp. (ESKYF)
Multiple Precious Metal VMS Discoveries Underscore District-Scale Potential

Mark Reichman, Senior Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Initiating coverage with an Outperform rating. Eskay Mining Corp. is focused on the exploration and development of precious metal volcanogenic massive sulfide (VMS) targets along the Eskay rift in a prolific region of northwest British Columbia known as the “Golden Triangle.” The company’s Eskay precious metal rich VMS project is comprised of 177 claims encompassing 52,600 hectares of highly prospective property within proximity to several world class gold deposits, including the past-producing Eskay Creek mine, which is considered the world’s most precious metal-rich volcanogenic massive sulfide deposit.

Drilling program in full swing. Drilling commenced on June 1 along a 5-kilometer-long corridor encompassing the TV and Jeff precious metal rich VMS targets. To date, the company has completed 5,370 meters of diamond core drilling in 13 holes, or roughly 18% of the 30,000 meters planned to be drilled in 2022. Other targets to be drill-tested this season include: 1) Scarlet Ridge, 2) Excelsior, and 3) C10-Vermillion….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Understanding Power Grid Blackouts, Brownouts, and Solutions

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Image Credit: Andrew Gustar (Flickr)


What is Curtailment? An Electricity Market Expert Explains

Curtailment has a special meaning in electric power systems. It describes any action that reduces the amount of electricity generated to maintain the balance between supply and demand – which is critical for avoiding blackouts.

Recently, curtailment has made news in states like California and Texas that are adding a lot of wind and solar power. On very windy or sunny days, these sources may produce more electricity than the grid can take. So grid managers reduce production to manage that oversupply.

This can be a lost opportunity. Electricity from solar and wind, as well as existing nuclear plants, is inexpensive and emits less greenhouse gases than fossil fuels, so it may be in society’s interest to keep these generators running.

A Special Kind of Surplus

Consumers know about shortages and surpluses in the goods they buy. Shortages mean that shoppers can’t get that PlayStation 5 for Christmas – or, more critically, the bread, water or baby formula they need.

Surpluses look different, like unsold books classified as remainders or Easter candy discounted 80% at local drug stores on Monday morning.

But electricity is not like these goods. On today’s electric grid, shortages and surpluses can both result in the exact same thing – a blackout.

The North American grid transmits electricity as alternating current that changes direction back and forth, like water ebbing and flowing from a vintage hand pump as the handle is pushed up and down. Modern electricity grids require precise levels of frequency – the back-and-forth motion of power – to function properly.

The grid is designed to function at 60 hertz, which means that the flow of electric current shifts back and forth 60 times per second. This is achieved, in part, by ensuring that the amount of electricity produced at any given time is equal to the amount of electricity being used. If too little electricity is produced, frequency on the system drops. If too much electricity is produced, then frequency increases.

Modern power plants are designed to operate within a relatively narrow range around 60 hertz. If the actual frequency on the grid is outside that range, the plant can disconnect itself from the system. If enough plants do that, it causes a blackout.

As the U.S. electric power industry shifts increasingly to renewable sources, the national power grid will require major updates.

Managing the Flow

In some parts of the U.S., mostly the Southeast and the West, the same companies generate electricity and deliver it to customers. When power plants in a utility’s territory generate more electricity than customers are using, the company will simply produce less electricity from its most expensive power plant, or temporarily shut it off altogether.

But other states have restructured their electricity markets so that some companies produce power and others deliver it to customers. In these competitive markets, curtailment raises complex issues. Power generators stay in business by generating and selling power, so when demand drops, grid operators need a system to ensure that they make curtailment decisions fairly.

Often the first tool for choosing which plants to curtail is the prices that generators are paid. When supply grows or demand falls, the price of electricity falls. Some generators may decide that they are unwilling to produce electricity below a certain price and drop off if it hits that level.

If there’s still a power surplus, the organization that operates the grid steps in to manually curtail generators. They can either do this through signals in the grid’s data system or by contacting generators directly through phone calls. Power may be curtailed for five minutes or five hours, depending on how quickly the system returns to normal.

Overall, the U.S. needs more low-emissions electricity to help reduce air pollution and slow climate change. So curtailment isn’t a sound long-term strategy for managing power surpluses. It’s somewhat comparable to the early days of the COVID-19 pandemic when supply chain disruptions forced producers to throw away huge quantities of food even as grocery stores struggled to fill their shelves.

One solution is to expand energy storage so that generators can save excess power for a few hours instead of sending it straight into the grid. Another option is building more transmission to carry power to areas that need it. Both types of investments can reduce the need to curtail generation and forgo making clean, affordable electricity.

This article was republished with permission permission from  The Conversation, a news site dedicated to sharing ideas from academic
experts. It represents the research-based findings and thoughts of Theodore J. Kury, Director of Energy Studies, University of Florida.


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Is the Strong Dollar Creating a Buying Opportunity for Gold?

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For The First Time In 20 Years, 1 Dollar = 1 Euro. What This Means For Gold

If you were considering taking the family on a European vacation, now may be a good time, as the U.S. dollar and euro just achieved parity for the first time in 20 years.

But as someone who was recently in Europe, I urge travelers to be aware that prices have skyrocketed everywhere, not just in the U.S. A five-star hotel in France or Italy that might have cost $350 a night before the pandemic can now cost as much as $1,600.

This article was republished with permission from Frank Talk, a CEO Blog by Frank Holmes
of U.S. Global Investors (GROW).
Find more of Frank’s articles here – Originally published July 18, 2022.

Much is being made about the USD/EUR exchange rate, but the truth is that King Dollar has made epic gains on a number of world currencies this year as the U.S. has embarked on an aggressive monetary tightening cycle to control inflation. Below you can see how much G-10 currencies have fallen in 2022 compared to the greenback.

A stronger dollar is favorable not only for Americans traveling abroad but also companies that pay to import goods from other countries—think big-box retailers such as Walmart, Target, Home Depot and Dollar Tree.

On the other hand, a soaring dollar can hurt U.S. exporters since it makes goods more expensive to foreign buyers, dampening demand. Between January and May of this year, the top U.S. exports by end-use included crude oil and petroleum products, mostly due to the massive increase in crude prices. Other top exports included pharmaceuticals, industrial machinery, semiconductors, automotive parts and accessories, fuel oil, automobiles, natural gas and plastic materials, according to Bureau of Economic Analysis (BEA) data. 

Boeing Reports Best Month For
Deliveries Since 2019

The single largest U.S. exporter in value terms is Boeing. The massive aerospace company, which recently moved its headquarters to Arlington, Virginia, faced a wave of order cancellations stemming from the tragic 2018/2019 crashes involving the 737 MAX, but orders look to be picking up again. As I shared with you last week, Boeing reported stellar delivery results for the second quarter, with 51
aircraft delivered in June alone. That’s the company’s best month since March 2019.

I will be curious to see if Boeing executives address the impact of the stronger dollar when the company reports second-quarter financial results later this month.

King Dollar Pushes Gold Deep
Into Oversold Territory

Among the biggest victims of King Dollar’s strength is gold, which, like most commodities, is priced in the greenback internationally. The yellow metal has long been valued as a safe haven during times of economic uncertainty and high inflation, which we’re certainly facing today. June’s consumer price index (CPI) came in at a scorching annual rate of 9.1%, the highest in over 40 years, but if we use the inflation methodology from 1980, the figure is closer to 17% or more.

Despite this, gold has steadily fallen since its 2022 high of $2,070 per ounce, set in early March. As of today, gold is off close to 7% for the year, and last week it briefly traded below $1,700 for the first time since March 2021. Based on the 14-day relative strength index (RSI), the metal looks incredibly oversold at around 23, the lowest it’s been since August 2018.

In addition, gold has signaled a “death cross,” which occurs when the 50-day moving average dips below the 200-day moving average.

Some investors and traders see this move as a bearish sign. I see it as a buying opportunity. If you believe that the dollar is overextended relative to other currencies, and that a reversal could happen in the coming weeks and months, now may be a good time to accumulate, especially if you think we’re in the midst of a recession.

Deepest Yield Inversion Since
2000

I’ve shared with you a couple of times that we may very well be in a recession already, based on the Atlanta Federal Reserve’s GDPNow real-time forecast. The latest forecast, as of last Friday, is that the U.S. economy contracted 1.5% in the second quarter, following an annual decrease of 1.6% in the first quarter.

Even if that ends up not being the case, the bond market is telling us that a pullback may be imminent.

A yield inversion occurs when the shorter-term Treasury bond trades with a higher yield than the longer-term Treasury. Remember, bond yields go up when prices go down, so when yields invert, it suggests that investors find shorter government notes riskier to hold than longer-dated ones.

Inversions have been extraordinarily accurate at predicting recessions. Going back at least 40 years, every recession has been preceded by an inverted yield curve, using the two-year and 10-year Treasuries.

Not only is the yield curve inverted right now, but it’s inverted at the biggest point since the year 2000, soon before the dotcom bubble burst.

So what does this mean? Past performance is no guarantee of future results, but we could be looking at a pullback, if not this year then the next. More specifically, stocks and other risk assets may not have found a bottom yet. From its all-time high in early January, the S&P 500 has fallen 20%, but historically it’s dropped as much as 35% on average when a bear market coincides with a recession.

Do with that information as you wish, but I believe it’s wise and prudent to have exposure to gold at this time, between 5% and 10% of your portfolio.


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US
Global Investors Disclaimer

The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Frank Holmes has been appointed non-executive chairman of the Board of Directors of HIVE Blockchain Technologies. Both Mr. Holmes and U.S. Global Investors own shares of HIVE. Effective 8/31/2018, Frank Holmes serves as the interim executive chairman of HIVE.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (09/30/2021): Torex Gold Resources Inc., Centerra Gold Inc., Gran Colombia Gold Corp., Dundee Precious Metals Inc., Pretium Resources Inc., Endeavour Mining PLC, Barrick Gold Corp., Eldorado Gold Corp., SSR Mining Inc., Silver Lake Resources Ltd., Karora Resources Inc.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

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