Weekly Update 24 Feb 2017
Stocks and government-issued currencies fell this week, while bonds and commodities were mixed. The largest gains were once again in Bitcoin, which rose 11.1% to 29.3 grams, now approaching parity with one ounce of gold. Gold stocks fell more than any other asset-class, dropping 4.7% to close at 5.1 grams.
The Chinese Yuan and the Canadian Dollar led the drop in currencies, falling 1.1% each. The Japanese Yen again fell the least, losing 0.4%. Bonds were mixed and favored the longer maturities: the long term TLT rose 0.5%, while the short term SHY fell 0.8%, and USD cash dropped 0.9%.
The Dow Jones Industrials were were the best performing equities, being unchanged for the week, while the European STOXX fell 1.4%, the largest drop for a major index. Gold stocks had the largest losses in the equity category, falling 4.7%.
Commodities were mixed, with cotton up 3.2%, while coffee fell 3.1%. Among the metals, platinum and silver rose 0.7% and 0.5% respectively, but palladium and copper fell 1.8% apiece.
Looking back over the last year, we see that holding stocks and commodities has been quite profitable, particularly crude oil and palladium. The most profitable of all was Bitcoin, which has risen 178% over the last year. Bonds and government-issued currencies have all lost value, with the exception of the Canadian Dollar, which is up 5.1%. The Chinese Yuan and long term US bonds were the worst places to have your money. These trends may continue – and even accelerate – as the Chinese and Europeans dump their USD bonds and move their money into Bitcoin to escape capital controls and negative interest rates.