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Weekly Memorandum 8/31/2020

The S&P 500 and Nasdaq tagged all-time highs again today, but the Dow continues to lag behind. We noted in previous weekly memorandums that the longer this divergence continues, the more of a concern it becomes. This remains the case.

Interest rates dipped today, but Gold and Silver rose higher. Crude Oil is basically flat, while the U.S. Dollar traded down to a new cycle low. Capital flows continue to indicate that recent movements in the market are inflationary in nature. This is evidenced by the dollar's decline while stocks and other commodity prices (see Lumber especially) have rallied higher.

Bitcoin is up slightly today, and a new edition of the Mercator Crypto Report will be published this evening.

The big equity news today surrounds the share splits for Apple and Tesla, which have been secular leaders of this bull market. Remember that trends usually last longer than most people expect, but there always is a reversion to the mean.

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