COVID-19 vs. Gold, Yields, and China

As some of you know, I live close to the epicenter of COVID-19 in the US—three miles, to be exact. 

Because of that, I get a front row seat to see how families, schools, towns, municipalities, companies, counties, and states react to an exogenous threat. What I can tell you most is everyone’s beliefs come out during periods like this. 

If you have a belief called: “the world is dangerous,” then that’s how you are reacting. If you have a belief called: “everything works itself out,” your house and daily life looks very different than the first group. Same information, different behavior. 

So how is the world responding? 

  1. The Chinese Shanghai Stock Exchange is sending a very clear message to the rest of the world. Since China informed the World Health Organization about COVID-19 on December 31, 2019, you can see what has happened to their money. 
  2. China’s Nasdaq is telling an even more interesting story about what might be in store for the rest of the world—especially the tech world. 
  3. And then you have Gold priced in Euros. 
  4. …Gold priced in British Pounds…
  5. …Gold priced in Swiss Francs…
  6. …AND finally Gold priced in US Dollars. They are all telling you their story of what’s to come. 
  7. If that wasn’t enough, you then have the bond market of the largest economic bloc on the planet doing something it’s never done before… is it about to make history? And if so, what does it mean for your bonds… and stocks… and gold? 
  8. Asia’s largest bond market is acting very different then the rest, which could be a sign as to which way the next large move in yields goes. 
  9. And lastly—the largest bond market on the planet is doubled over and pleading for its life. How low can it go? 

Join me as I talk about all of this plus a few more goodies on this week’s Fearless Wealth’s video. You can find the entire recording right here

In Your Corner,

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RC Peck, CFP