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Weekly Memorandum 12/20/2021

Stocks ended last week on a defensive note, and the weakness has carried over into the new week thus far, as we see equity indices across the board trading lower. Market breadth has deteriorated notably, and deflationary pressures seem to be rising as bonds and the dollar find nice bids. Hence, we coined the phase, "Transitory Deflation."

The traditional flight to safety trades seem to be working (bonds and dollars), but the evolving macroeconomic landscape could be turning the tide with respect to precious metals. The risk-reward opportunity in that sector is improving notably.

Grain markets were mixed last week, but livestock was mostly lower. Cryptocurrencies continue to act in a bearish manner and struggle to form any sort of higher-high with regard to the short-term trend. This is a risk-off market environment right now.

The final edition of the Mercator Letter for the year was published yesterday. Only 11 days remain to lock-in discounted annual subscription rates before prices increase next year. Don't miss out!

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