April 6, 2020
As I said, with global central bank and governments all-in, pumping stimulus to keep the economy alive, the outlook boils down to whether expectations will be beat, meet or miss (disappoint) on the health crisis front.
The expectations bar has been set low. And we've had a potential positive catalyst looming: a treatment option.
With that, we've been waiting to hear what the results look like from the (more the a week) period that New York hospitals have been deploying hydroxychloroquine.
This drug was made available by the FDA for 'off label' use almost two weeks ago. But the Governor banned it's use in the state of New York, outside of hospitals. He reversed that today, and also admitted that the drug has been "effective" in the hospitals.
Align that with the improving daily statistics coming out of New York today, and the outlook on the health crisis could be changing.
As we've discussed, positive developments on the treatment front "would be a major turning point, and provide light at the end of the tunnel for the health crisis and for the economy."
On that note, as we also discussed last week, "even with a positive development like that, there would be plenty of economic damage to overcome, and loads of government money and Fed liquidity to mop up. But it would be a launchpad for gold, and asset prices in general (i.e. inflation)."
Indeed, we're seeing asset prices levitate. Today stocks were up 7%. Gold was up nearly 4%.
And the move in gold looks like it will be accelerating (good bullish technical breaks). We could be testing the March highs in the days ahead. And then the next stop would be the 2011 (GFC induced) highs of over $1900.