BNY on PHYS

8/9/2019 BNY on PHYS

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Nicholas Colas (Chief Market Strategist): 212 448 6095 or [email protected] Clark: 212 448 6085 or [email protected]

Beth Reed: 212 448 6096 or [email protected]

This weeks secondary share offering has pulled this premium down to 13.1% yesterday, or $158/ounce.Now, before you start thinking bubble, take a step back and think about what these prices are really saying. This fund is now over $700 million in total asset sizeand trades over 1 million shares per day. There are plenty of alternative investment choices we have listed the ETFs, but there are also other ways to buy and store goldthat do not carry these premiums. And yet, the premiums persist, even after a sizable secondary offering. There is always some background concerns about the marketfor gold and plenty of places on the Internet if you want to learn more about these. But these issues were no greater in May then they were earlier in the year. So thatdoesnt explain the recent bump in premium.

We would propose that the premiums here are the most direct and traceable proxies for confidence in the global monetary system. Yes, thats a big statement.But consider that these premiums expand when events like the crisis in the Euro flare up. And they do not entirely disappear even when substantial supply comes along.We are not saying that an investment in PHYS is a good or bad idea frankly we have no idea. But we do know that when market anomalies arise in well-followedassets such as gold, investors and market watchers do well to pay attention.


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U.S. EQUITIES

AEO (-16.6%) forecast second quarter profit excluding some items of 12-16 cents a share, missing the average analyst estimate of 21 cents. UNH (-0.3%)announced it will raise its annual dividend to 50 cents a share from 3 cents a share. BA added 0.8% after it was lifted at Morgan Stanley to EqualWeight from Underweight, while NVDA was up 0.5% on a FBR Capital Markets upgrade to Outperform from Market Perform. For the first time in 16quarters, TOL (+0.8%) increased its land holdings in the quarter ended April 30.

Important Conferences/Corporate Meetings Today:Barclays Capital Communications, Media and Tech ConferenceCiti Global Healthcare Conference New York, NYJP Morgan HVAC Conference New York, NYUBS Global Oil and Gas Conference - Texas

Important Earnings Today (with Estimates) From

Source: Thomson ONE

Three Day (High 1089.50; Low 1036.75):Prior Day SPX (High 1090.75; Low 1065.59; Close 1067.95):

S&P Futures

One Day (High 1089.50; Low 1062.75): BIG: $0.67 BGP: $-0.14 DMND: $0.20 GES: $0.49 HGG: $0.25

HNZ: $0.59JCG: $0.57 NOVL: $0.06 TIF: $0.36Source: Bloomberg


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FIXED INCOME

Source: Bloomberg

Todays Important Economic Indicators/Events:GDP: 3.5% SAARGDP Price Index: 0.9% SAARJobless Claims: 450KCorporate ProfitsEIA Natural Gas ReportJames Bullard Speech 2:30pm

Source: Bloomberg

Treasuries fell as positive reports on new home sales and durable goods weakened demand for government debt. The governments $40 billion offeringof 5-year notes drew a yield of 2.13 percent, compared with a Bloomberg survey forecast of 2.11 percent. Coverage was 2.71 times versus an average of2.57 times over the prior 10 auctions, while indirect bidders purchased 40.6 percent of the notes, compared with an average of 48.0 percent over the past10 sales. Moodys said the United States AAA rating continues to be stable, indicating the rating agency believes the AAA rating will not come underpressure for at least the next 12 to 18 months.


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