259524652 - 1_ey5awo7i - PID 1851201 Hi everybody, I’m Ted Dixon with the INK preview for the week of June 13th: The shiny hedge in a gloomy market. While the INK Canadian Insider Index put in another all-time high of 2,395.88 last Wednesday, it finished down 0.4% for the week as stocks sold off globally in response to US CPI numbers released on Friday. Generally, insider commitment in Canada remains upbeat in economy-sensitive Canadian sectors and more or less neutral towards the defensive areas such as Technology, Telecom, and Utilities. At this point, insiders seem to be signalling that higher interest rates are adding more uncertainty towards those defensive areas than the resource areas which can benefit from higher commodity prices. Gold stocks were the best performing group last week with the S&P/TSX Composite Gold Index up 2.2%. There are two competing narratives for gold right now. The bearish case is grounded in the belief that investors will sell gold for T-bills and other securities that offer a yield as the Federal Reserve hikes interest rates. The higher rates go, the more unattractive gold becomes. A bullish counterargument focuses on the fact that short-term real rates are in deep negative territory. The bullish case believes that the Fed is faced with two choices, both of which are gold positive. Under the first scenario, the Fed does not raise rates as much as needed to bring down inflation sustainably to its target because it is afraid of crashing the economy. That will leave markets with persistent real negative interest rates which would be positive for gold and commodities in general. Alternatively, the central bank aggressively tightens so much that they risk sparking a painful recession. Gold tends to do well in the lead up to such deflationary busts, but other commodities usually are not so fortunate. We will have to see if either scenario plays out. Jesse Felder made the case on the Macro Trading Floor available on canadianinsider.com under crypto videos that the Fed is likely to take the first option and go easy on rates relative to what is needed to choke off inflation. In the meantime, gold insider sentiment is upbeat with our gold mining insider indicator above 500% meaning there are more than 5 stocks with key insider buying for every one with selling. Although the narrative in the market Monday is overwhelmingly bearish towards stocks, based on what insiders are signalling, there are still some bright spots beyond commodities that could yet make it through an inflationary storm. Probably one of the most controversial contrarian takes on things right now is insider buying in US bank stocks. Insider buying is at very optimistic levels with our US banks indicator at nearly 250%. That suggests to us that the American economy is not in recession. That said, we are aware of some forward-looking data such as declining US consumer confidence that is warning of trouble ahead. It just so happens that US insiders appear to be betting against such gloomy indicators. We will take a closer look at US financials insiders and the US economy in our US market update on Wednesday. If the North American economy is fortunate enough to dodge the recession bullet, contrarian dip buyers may ultimately be rewarded. In today's morning report, we highlight a situation of contrarian insider buying in Canadian retailer Leon's Furniture. Ultimately, the question about the fate of real economic growth will likely take many months to sort out with plenty of ups and downs along the way for every sector. Thanks for stopping by and check back here again next week as we let the insiders guide us to opportunity. And don’t forget throughout the week we will post copies of our morning reports right under this video. This is not a recommendation to buy or sell securities and nothing in this video or in INK reports should be considered financial advice information is for educational purposes INK employees may hold an interest in any stock mentioned in our videos or in our reports.