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        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.