A Comment -- General Comments From an Expert (A Commentary)

Gold. Don't negative interest rates imply that deflation is more the problem than inflation? What's the connection between gold and interest rates? The real question is what do negative interest rates imply? The value of currency tomorrow is going to be worth more than it is today, and this is if there's deflation. In deflation, gold was the place to be, as it was in the 1930s. Right now, he likes anything that sounds like gold. Stocks give you tremendous leverage. Most bang for your buck is the junior stocks, like GDXJ. But we are not in deflation. When ratio of total debt to GDP reaches 3.5:1, GDP stops, you have no demand, prices go down, and you get negative interest rates. But it won't last long, since the outcome is not good and governments stimulate like crazy. Either way, you have to own gold.

Utilities in a low interest rate environment. Utilities keep ratcheting upwards. As long as rates are falling, they keep being attractive. Emera, Atco are recommendations. Until we get a real reversal in interest rates, no change in the general trend. Buy them and be happy.

Best income ETF? Anyone trying to differentiate between income funds in this environment is just kidding themselves. He can't make a guess. As long as interest rates keep coming down, they're going to keep performing.

Market Outlook A scary open today, but it has recovered somewhat. Be cautious about reading too much into this. He likes the short and sharp adjustment -- a supportive sign of a bull market. The yield curve is now inverted. Previous recessions have been predicated by this. It is the dog days of summer, so this may be magnifying the impact somewhat. You can still find invest-able spaces in the market. We are back near the top of the forward P/E ratio for the S&P500, but are now showing some pullback for the latest high. Just be careful and watch global manufacturing PMI index. The US is barely holding the 50 bullish level. Only India and Australia are higher. There is probably another 6-12 months left in this bull run, he predicts.

Not every asset class, like gold, bonds and the US dollar, has been volatile this week, but actually strong. It's very difficult to invest for income now in an era of record-low interest rates--it's a race to the bottom. The low rates push investors to invest in stocks, especially retirees or those approaching retirement. The naive approach is to find the highest-yielding stocks, which is like getting a sugar high off sweets. You need to look at many other factors like sound business fundamentals in a company/stock.

Are puts effective if a crash is imminent? If he could predict a crash, he would be super-rich. He doesn't think a crash is imminent, but a correction is happening now which is normal and needed. Yes, puts are effective if a crash is imminent. It's like buying insurance for your house, though puts are very expensive. It's not a bad strategy, but there are better ways to protect a portfolio, like owning bonds, gold and items priced in US dollars. Also if you trade puts, you need to constantly keep an eye on the markets and to buy puts when volatility is low, like two months ago (and not now).

A utility or pipeline to buy that isn't ENB-T. A utility offers better diversification than a pipeline, and is rate-sensitive and not commodity-sensitive. So go with a utility.

Market Outlook If you look at how the markets have been running this year, technology, consumer and some industrials have been leading things. If you think the market is a long term run you look for these sectors to continue to run well. News is making the market jittery and investor sentiment has been muted. Gold has been setting up for months as investors have been looking for safe havens in a zero or negative yield curve globally. Gold isn't rallying because of uneasiness about the market. He thinks equities are continuing to look attractive as well.

Year over year the market is hardly up? The market typically rallies 18-20 months and then you consolidate. Corrections come in timing and in price. Going back to 1950, market corrections during bull runs last about 9 months, where as the rallies averaged 30 months. He thinks this will take us higher until 2022. We are just pulling back on a short term correction.

Gold finally broke out, above $1,350, reflecting market uncertainty that he'd been expecting for a long time. The bigger picture are the dislocations in currencies; we're facing a paradigm shift, specifically a currency reserve shift and that is tied to high levels of debt. Remember that this debt is mostly priced in American currency....Labour is leaving China, but not going to America, which is the whole point behind Make America Great America...Gold will go much higher to asset debts....The markets will go higher. Money is flooding out of the bond market (earning negative interest rates) and is seeking safety---stocks.

A busy day today with new Trump tariffs and Germany's yield curve below 0% for the first time ever. The latter is not good for Europe's financial system and hopes the ECB changes its fiscal policy. Negative writes hurt banks and lifecos, hurting lending margins and crushing profit margins respectively. This is pulling our curve down too....This week, the US Fed cuts interest rates by 25 points, but the futures are pricing another cut in September. He agrees with Kudlow that the December 2018 hike was a mistake. Maybe a second cut is needed, too. 85% of the credit created since 2008-9 has been created by non-banks, so the Fed must be mindful of credit spreads and market-based lending conditions.

A recession is not coming ...because gas prices are down year-over-year, and there's never been a recession when that has happened. Recessions happen after gas prices double or more in the 12 months leading up to it.

Market outlook. Bullish on Europe, focusing on multi-national companies based in Europe with international revenue, more than a pure European play.

All global bonds have risen in response to an aggressive stance from Trump in the largest jump this year. We also still have an inverted yield curve.

Steepest weekly loss in NASDAQ and S&P500 since December, year to date. The FANG stocks have yet to return to where they were. The Fed rate cut is due to global slowdowns, especially in manufacturing.