Has The American Dream Of Homeownership Become A Myth?

High Mortgage Rates Exacerbating The Supply Crunch

The affordability crisis can be attributed to a multitude of factors, chief among them being the persistent rise in mortgage rates. Despite recent declines from their October peak, rates remain significantly higher than they were in 2022, resulting in a typical homebuyer’s monthly payment being approximately $250 more than a year ago, Redfin estimates.

Moreover, elevated mortgage rates have inadvertently exacerbated the supply crunch, as many homeowners are opting to stay put rather than risk losing their ultra-low rates. This reluctance to sell has bolstered prices as buyers now compete for a limited pool of available properties.

While some relief may be on the horizon, the path ahead remains uncertain. The Federal Reserve’s recent decision to hold off on rate changes, coupled with the potential for future cuts, has introduced a degree of volatility into the market.

A Rate Cut In June?

Compounding the challenge is the unexpected surge in wholesale prices in the U.S., as evidenced by the producer price index (PPI). Prices for manufacturers rose 0.6% month-over-month in February, ahead of expectations, while the consumer price index (CPI) also ticked up from January. This poses fresh obstacles for economic and monetary policy, potentially delaying anticipated rate cuts as the central bank prioritizes curbing inflation over stimulating growth.

Some international financial firms, including UBS and RBC, still anticipate the Fed to start cutting rates as early as its June meeting, with the Bank of Canada, European Central Bank (ECB) and Bank of England potentially following suit in subsequent months.

But don’t expect rates to drop to near-zero anytime soon. Former Fed Chair and current Treasury Secretary Janet Yellen has cautioned that it’s “unlikely” that market interest rates will revert to pre-pandemic levels, aligning with projections from the White House and private sector forecasts.

Gold’s Record-Breaking Rally

Against this backdrop, gold has performed very well, touching a new record high of $2,195 per ounce last week—on the same day that Bitcoin also recorded a fresh high. Fueled by growing investor confidence in a potential rate cut and a weakening U.S. dollar, the yellow metal has surpassed key resistance levels, exhibiting bullish momentum.

As I’ve written many times, global central bank demand for gold has shown no signs of abating, while a potential rebound in demand from gold-related exchange-traded funds (ETFs) could provide additional support for the precious metal.

While the U.S. stock market’s solid performance and interest rates above 5% may raise questions about the allure of non-interest-bearing gold, the potential for a reversion in these assets could partially explain the metal’s record and near-record-high prices. Historically, wars have been catalysts for gold price appreciation, and the current geopolitical landscape appears to be no exception.

As investors grapple with the challenges of the current economic landscape, the precious metal’s resilience and potential for further gains may offer a glimmer of hope amid the turbulence.

Index Summary

• The major market indices finished down this week. The Dow Jones Industrial Average lost 0.02%. The S&P 500 Stock Index fell 0.10%, while the Nasdaq Composite fell 0.70%. The Russell 2000 small capitalization index lost 2.06% this week.
• The Hang Seng Composite gained 2.31% this week; while Taiwan was down 0.52% and the KOSPI fell 0.50%.
• The 10-year Treasury bond yield rose 23 basis points to 4.307%.

Airlines And Shipping

Strengths

• The best performing airline stock for the week was Embraer, up 8.9%. According to Morgan Stanley, TSA data continues to trend above 2019 levels. March TSA data is already looking strong. Month-to-date, TSA passenger throughput is trending up 6.8% versus 2019 levels and up 5% year-over-year.
• According to Goldman, air freight markets continue to send a bullish signal of cyclical inflection, with global volumes for January/February up double-digits. In year-over-year terms, the recovery underway since the fourth quarter is one of the more significant ones since the GFC and pandemic. However, the bank’s experience is that given how closely tied air freight is to the inventory cycle it simply tends to be one of the earliest cycle indicators.
• According to NBC News, United Airlines expects to serve more than 21 million passengers during its Spring Break season, between March 8 and April 21, which is a 10% increase compared to last year. In a similar vein, Delta Airlines’ CEO Ed Bastian stated that travel demand during Spring Break and the summer remains “robust,” both domestically and internationally, and that Delta has had some of the strongest sales days in its history over the past 10 weeks.

Weaknesses

• The worst performing airline stock for the week was Southwest Airlines, down 17.6%. According to National Bank Financial, before the pandemic, Canada welcomed approximately 750,000 visitors from China, annually. However, arrivals from China have sharply declined, with only around 225,000 visitors in 2023, representing less than one-third of peak volumes seen in 2018 and 2019. Flight service between Canada and China remains limited, with a significant drop in scheduled flights compared to pre-pandemic levels.
• According to JPMorgan, spot freight rates continued their normal downward trajectory after the Lunar New Year break, with the Shanghai Containerized Freight Index (SCFI) and the Drewry WCI down 4.7% week-over-week and 5.9% week-over-week last week.
• According to RBC, comparing January and February of this year to 2023, Boeing is already 12 aircraft shy of last year’s results. Notably, Boeing has delivered 17 fewer 737 MAXs year-to-date. The company continues to expect headwinds for MAX production, but the 787 deliveries are a positive sign for sentiment and 2024 free cash flow.

Opportunities

• According to JPMorgan, Azul reinforced the consolidation potential in the industry and is monitoring GOL’s Chapter 11 process. According to a local newspaper, Azul hired financial advisors to analyze a potential M&A deal with GOL but there are no official proposals yet.
• According to Stifel, while spot rates have come off their January peaks and have been drifting steadily lower to the current level of $3,300/TEU, they remain elevated and it is clear that traffic is not going to be moving through the Red Sea anytime soon. So, despite oppressive oversupply (fleet capacity has grown by 10% in the past 14 months), and more growth on the way, liners are probably in a decent position to contract at profitable levels.
• According to JPMorgan, Cathay Pacific announced a strong second half of 2023 NPAT beat (+30% H/H), surpassing street consensus by c17%. Looking ahead, the bank sees scope for strong profitability to continue in 2024 led by continued passenger business recovery and the buoyant air cargo market underpinned by the structural China ecommerce boom and sea-to-air freight spillover amid the ongoing Red Sea crisis.

Threats

• According to Morgan Stanley, recovery momentum in demand for visitors to Japan from China is sluggish. There is a strong sentiment that “China” is the driver of Japan Airport Terminal’s earnings growth. The bank thinks this might stem from the image of “splurge buying by Chinese people” prior to the pandemic.
• JPMorgan notes rising concerns among investors over labor strikes ahead of the upcoming U.S. East Coast (EC) International Longshore Association (ILA) port union negotiations, with May 17 set as the cut-off date for local contracts to be agreed upon.
• According to a New York Times report, FAA auditors found that out of 89 product audits conducted in 2024, Boeing passed 56 and failed 33 of them. The report was based on a review of an internal FAA presentation offering a glimpse into the many issues found by auditors.

Luxury Goods And International Markets

Strengths

• Asia is one of the leading luxury goods markets in the world, and according to Bloomberg Intelligence, Singapore, one of the primary cities in this region, is taking off this year. In 2024, tourism is expanding in Singapore due to hosting events and initiatives that make the city attractive to visitors, with a target of 15-16 million people. The travel arrangement with China, which is visa-free for mainland tourists, would help to increase traffic and beat the revenue gains for the casinos. At the same time, it is good for the luxury goods industry, considering Asia is the largest luxury market in the world. Singapore hotels’ RevPAR (revenue per available room) is expected to rise 8% and 15% this year.
• According to Bloomberg data, retail sales month-over-month in the United States, another one of the world’s biggest luxury markets, was reported at 0.6% in February versus a 1.1% decline in the previous month. This indicator tracks the sales of goods and services to the public, for both personal and household consumption. The slight gain witnessed in February shows that despite higher inflation levels, people keep shopping.
• Williams Sonoma, an American home furnishing store, was the best performing S&P Global Luxury stock, gaining 19.98% in the past few days. The company beat quarterly earnings expectations and raised its dividend by 26% from 90 cents a share to $1.13 a share, while simultaneously setting a new $1 billion share repurchase program. The stock increased 14% on Wednesday surpassing the current record closing price of $247.49 reached on March 7.

Weaknesses

• The leading automakers such as Volkswagen, Mercedes-Benz, Aston Martin, Jaguar Land Rover, and Ford Motors have decided to scale back or delay their electric vehicle (EV) plans. The demand for EVs hasn’t been responding as expected and the euphoria is cooling down. Tesla, the lead EV automaker which represented about 55% of all EV sales in the U.S. in 2023, said in January that its rate of growth “may be notably lower.” The future is electric, but with a slower adoption rate than expected.
• Hong Kong’s retail sales could fall 4% in 2024, even though the city is attracting around 29% of mainland tourists, which increased by 9% year-over-year. However, according to Bloomberg Intelligence, more tourists will be needed to cover the potential decrease of 6% in residents’ spending, including luxury goods, due to new consumption rules from local authorities.
• Faraday Future Intelligent Electric Inc., an American company that develops mobility ecosystems integrating clean energy, AI, internet, and usership models, was the worst performing S&P Global Luxury Stock, losing 24.88% in the past five days. Last week, the company’s Chinese subsidiary filed a lawsuit against a former executive, Ding Lei, for infringement of trade secrets relating to the FF 91 and unfair competition. The company is requesting monetary damages. This week, the stock reached its lowest price year-to-date of $0.0969.

Opportunities

• Spanish fashion retailer Mango reported on Monday record sales of 3.1 billion euros in 2023, reports Reuters, beating its forecast after matching domestic rival Zara’s strong expansion in the United States. The Barcelona-based brand said sales jumped 19% last year to exceed its forecast of 3 billion euros, the article explains, through a focus on party wear and fashion pieces for upmarket shoppers who are less sensitive to higher prices.
• Porsche AG shares have risen 3.4%, reversing recent trends. The Company’s fourth-quarter results were better than expected, and the automaker is launching four new models in the second half of the year: the Panamera, Macan, Taycan, and 911 model lines. Porsche has gained 3.7% year-to-date and expects an operating return on sales of 15% and 17% in 2024.

• Japan, one of the leading luxury goods markets worldwide, is expected to sustain GDP growth until 2034, even as its population falls. The demand for luxury goods in Japan is substantial. Brands such as LVMH, Prada, Richemont, and Kering are rising in sales this year due to high-level purchases by foreign visitors as well as locals. Richmont’s fourth quarter sales in Japan increased by 18% year-over-year, and Kering and LVMH’s by 13% and 20%, respectively. Local buying sentiment for luxury goods is strong, reports Bloomberg.

Threats

• Sales of luxury watches suffered a “severe downturn” last year, writes Bloomberg, as well-heeled buyers turned cautious amid geopolitical concerns and fading enthusiasm for pricey timepieces, a new report has found. Total watch sales at the top auction houses fell 13% to 610 million Swiss francs ($696 million) in 2023 from record levels hit in 2022, according to the Hammer track report released by industry consultant the Mercury Project. Demand soared during and in the aftermath of the pandemic, the article continues, but the boom has faded amid wars in Ukraine and the Middle east, while global economic growth has turned shaky.
• Nike, one of world’s biggest brands known for creating uniforms for the most popular sports teams and players, is about to lose one of its most significant contracts with FC Barcelona, the fourth-largest football team by revenue, with whom they have worked for over 25 years. Nike has had a dominant role in this space for decades and although the deal with Barca is not due to expire for another four years, the club’s financial problems have led them to explore what else is available.
• According to Yahoo! Finance and CNBC, 2024 hasn’t been an easy year for Apple. Shares are down 7% year to date and iPhone sales are declining in China, one of its main markets. This week, the European Commission slapped Apple with a $2 billion antitrust fine. Now it must allow users in the European Union to download apps from websites, instead of only through the App Store.

Energy And Natural Resources

Strengths

• The best performing commodity for the week was copper, rising 5.91%, with a big reason being tightening supply, reports Yahoo! Finance. In addition, China is weighing a copper smelter production reduction in response to its property crisis. According to JPMorgan, BHP’s Nickel West mine is under review which has a capacity of 80kt per year. The company also reported a $3.5 billion pre-tax impairment across its nickel assets.
• According to Bloomberg, iron ore staged a partial recovery, after slumping by the most since mid-2022 on Monday, as investors weighed the outlook for Chinese demand amid a lack of fresh stimulus. The steelmaking material rose after plunging almost 7% to below $110 a ton, the first time it has been under that level since August.
• Oil advanced after four days of losses, reports Bloomberg, as an industry report pointed to shrinking U.S. crude stockpiles, offsetting wavering OPEC cuts. West Texas Intermediate futures rose above $78 a barrel after falling 2% in four sessions. Brent traded near $83.

Weaknesses

• The worst performing commodity for the week was iron ore, dropping 9.45%. According to Bloomberg, iron ore slumped 7% earlier this week — dropping below the $110 a ton mark — after disappointing demand in China left the market lumbered with swelling inventories. The plunge in the steelmaking ingredient was the most since mid-2022, on an intraday basis, and was headed for the lowest close since August of last year.
• According to UBS, steel pricing remains under pressure in Europe as N European Steel fell another 2% week-on-week to €700 per ton on continued demand weakness and the return of capacity closed in the fourth quarter. U.S. HRC was flat week-on-week at $800 per ton.
• According to RBC, uranium spot prices declined to $91 per pound as buying interest waned among investor funds and utilities, placing pressure on uranium equities.

Opportunities

• According to Goldman, distillate cracks – the margin of diesel and jet fuel relative to crude oil – have sold off almost $10 per barrel from their elevated levels of early February, around the peak of the Red Sea disruptions, in line with their expectations. Goldman takes this opportunity to initiate a long position in distillate cracks that should benefit from both short-term, cyclical support, and several structural tailwinds.
• According to RBC, copper continued to strengthen last week (and into this week) on positive China trade data, further indications of supply tightening, including lower TC/RCs, and a pullback in the U.S. dollar. Some Chinese smelters have curbed output while others conducting planned maintenance over March-April will reportedly be challenged to resume production after.

• According to Bloomberg, after a spectacular bust, battery-metal lithium is showing tentative signs of life on speculation the retracement that convulsed the market last year has forced the conditions for a recovery. The spot price of lithium carbonate in China – the key material used to power electric vehicles – has rebounded to the highest level since December following its 80%-plus collapse in 2023.

Threats

• According to UBS, for Dangote, the expert estimates gasoline production starting late into the summer at the earliest and sees production runs not reaching nameplate capacity, and rather stabilizing at 500-550k barrels per day, by year-end. The outlook for the second half of this year looks “trickier” in his view. With new capacities increasing run-rates, the expert sees complex refining margins falling to $12-15 per barrel from $20 per barrel currently.
• China’s aluminum industry, the world’s biggest, wants to reinvigorate exports to soak up a domestic glut of the lightweight metal, writes Bloomberg. At meetings with producers last week, the China Nonferrous Metals Industry Association called on members to “make every effort” to lift overseas sales and offset the slowdown in consumption at home.
• According to Morgan Stanley, a glut of liquefied natural gas later this decade will send prices plummeting and trigger an uptake in consumption across Asia’s developing economies. A massive buildout of new LNG export capacity will send prices to $6.50 per million British thermal units in 2026, around half of the average rate in 2023, analysts including Mayank Maheshwari said in a note released Monday.

Bitcoin And Digital Assets

Strengths

• Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was 0x Protocol, rising 144%.
• Bitcoin hit a fresh all-time high for the fourth time in six days bolstered by record-breaking inflows into U.S. ETFs tied to the cryptocurrency. Bitcoin reached a high of $73,664 on Wednesday of this week, writes Bloomberg.
• Investors have poured over $200 million into VanEck’s spot Bitcoin ETF after it waived fees for the first $1.5 billion in assets until the end of March next year. The VanEck Bitcoin Trust which manages about $516 million has attracted a net inflow of $333 million since its launch in January, writes Bloomberg.

Weaknesses

• Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was Shiba Inu, down 21%.
• Bitcoin declined after setting a record high for the fifth time in seven days, dropping below $70,000 with investors pulling back from riskier assets across financial markets. The popular digital asset dropped as much as 6.3% on Thursday after climbing to an all-time high on the day, writes Bloomberg.
• Seventeen individuals acted as leaders in a $300 million Ponzi scheme involving CryptoFX LLC that targeted Latino investors, the SEC alleged on Thursday in a suit that has partially settled. Two of the defendants agreed to pay a total of more than $68,000 in disgorgement, interest, and civil penalties, the SEC said in a press release, according to Bloomberg.

Opportunities

• Thailand has waived personal income tax on capital gains from investment tokens, reports CoinTelegraph, to promote fundraising using investment tokens and establish the country as an investment hub.
• Bitcoin’s record-breaking rally appears to be creating around 1,500 new “millionaire wallets” daily. Data such as the number of tokens a wallet holds is accessible since the network is public and not controlled by any centralized intermediaries, Bloomberg explains.
• With nonfungible tokens attempting a comeback amid the latest crypto renaissance, Hivemind Capital partners is seeking to raise at least $50 million for a fund dedicated to the intersection of digital art and blockchain, writes Bloomberg.

Threats

• The founder of a cryptocurrency mixing service known as Bitcoin Fog was convicted in Washington federal court of helping to launder tens of millions of dollars from darknet markets known for selling illegal drugs. Roman Stelingov processed more than $400 million in untraceable transactions, including $78 million involving known darknet markets, writes Bloomberg.
• Crypto tax cheats just might have more to worry about this filing season as a newly confident IRS worked with the Department of Justic on the first standalone criminal charges for crypto tax fraud. The agency accused Frank Richard of Austin, TX, of underreporting the sale of $4 million worth of bitcoin in 2017 and 2019 and substantial capital gains that came from those sales, writes Bloomberg.
• Bitcoin extended a retreat from its latest record high amid an intensifying debate about whether the bull run in cryptocurrencies is evidence of speculative froth in global markets. Bitcoin dropped as much as 7.2% on Friday before paring some losses, writes Bloomberg.

Defense And Cybersecurity

Strengths

• The U.S. Air Force is set to bolster its fleet with 1,000 AI-operated jets under a $6 billion contract aimed at executing high-risk missions, with contenders like Boeing and Lockheed Martin vying for the project. The contract promises to enhance mission support and a strategic edge over adversaries like China.
• Poland is set to enhance its defense capabilities and NATO interoperability by purchasing $3.7 billion worth of air-to-air and air-to-surface missiles from the United States. This includes 821 AGM-158B-2, 232 AIM-9X Block II Sidewinder, and 745 AIM-120C-8 missiles, with Lockheed Martin and RTX Corporation facilitating the delivery compatible with Poland’s F-16 and F-35 jets.

• Archer Aviation rose 9.61% this week and was the best performing stock in the XAR ETF.

Weakness

• John Barnett, a former Boeing employee who voiced safety and quality concerns about the company’s aircraft production, was found dead from an apparent self-inflicted gunshot wound this week. The news comes amidst ongoing investigations and scrutiny over Boeing’s manufacturing practices and safety issues.
• Amid escalating U.S. efforts to limit China’s technological advancement, Chinese Premier Li Qiang’s strategic engagement with the nation’s leading AI and chipmaking entities signals a direct challenge to American dominance in global tech. This reinforces Beijing’s commitment to circumventing U.S. sanctions and asserting its technological sovereignty.
• AeroVironment fell 10.61% this week and was the worst performing stock in the XAR ETF.

Opportunities

• Quantic Wenzel will engineer and manufacture critical electronic assemblies for Northrop Grumman’s AN/SLQ-32(V)7 SEWIP Block 3 Program, enhancing U.S. naval defenses against anti-ship missiles through electronic attack capabilities, leveraging its expertise in high-performance solutions.
• Small and medium-sized businesses across the U.S. are integral to the defense industry, providing essential research, development, and manufacturing support to major contractors like Raytheon and Lockheed Martin, while the National Center for Defense Manufacturing and Machining (NCDMM) facilitates collaboration between these businesses, academia, and government to strengthen the national defense industrial base. Through forming over 260 alliance partnerships and executing more than 5,000 projects, NCDMM enhances the supply chain and innovation in defense manufacturing, including areas like automation and metrology, contributing significantly to national security.
• Bell Textron Inc. has launched a new Weapon System’s Integration Lab in Arlington, TX, to advance the integration and testing of next-generation tiltrotor technologies and mission systems for the U.S. Army’s Future Long-Range Assault Aircraft. This marks a significant step in the partnership between Bell and the City of Arlington and reinforces their commitment to innovation in military aviation.

Threats

• Russia has replaced its navy chief, Admiral Nikolai Yevmenov, with Admiral Alexander Moiseyev, amidst ongoing losses in the Black Sea to Ukrainian attacks, without stating a reason for the change.
• FBI Director Christopher Wray has heightened concerns over terrorist threats against the U.S., describing them as unprecedented in scale following the October 7 Hamas attack on Israel. Wray has emphasized the importance of vigilance, especially against lone actor violence inspired by Middle Eastern calls for attacks.
• NATO Secretary General Jens Stoltenberg emphasized the urgent need for increased military support and ammunition for Ukraine against Russia’s advance, noting the importance of political will among member states to meet the alliance’s spending targets and address the consequences of delays on the battlefield.

Gold Market

This week gold futures closed the week at $2,160.30, down $25.20 per ounce, or 4.4%. Gold stocks, as measured by the NYSE Arca Gold Miners Index, ended the week higher by 0.9%. The S&P/TSX Venture Index came in up 0.4%. The U.S. Trade-Weighted Dollar rose 0.7%.

Strengths

• The best-performing precious metal for the week was Palladium, up 6.3%, as hedge funds aggressively close short positions. According to Scotia, SilverCrest Metals reported fourth-quarter earnings per share (EPS) of $0.25, significantly ahead of the consensus of $0.13, based on pre-reported silver and gold sales of 1.27 million ounces and 16.1 thousand ounces, respectively.
• Calibre Mining announced an updated reserve and resource estimate for its operations in Nicaragua and Nevada. Nicaraguan reserves increased year-over-year in contained ounces, marking the fourth consecutive year the company has achieved this since acquiring the assets from B2Gold in 2019.
• Ramelius Resources has outlined a 10-year plan for its more valuable Mount Magnet site (90% operating net asset value). Extensions have increased their life-of-mine production to 1.7 million ounces from 1.2 million ounces, which is offset by growth capital expenditures rising by 230 million Australian dollars.

Weaknesses

• The worst-performing precious metal for the week was gold, down slightly by 1.1%, as recent U.S. inflation data reduced expectations for future interest rate cuts. Goldman Sachs reported that Gold Road Resources announced substantial rainfall has resulted in the closure of roads that provide access to Gruyere and the suspension of mining operations over a portion of this period, with the likely resumption of open pit access expected next week.

• According to Bloomberg, Gabriel Resources, a Canadian developer aiming to build one of Europe’s largest gold and silver mines, has lost a $4.4 billion damages claim against Romania for halting the project more than a decade ago due to environmental concerns.
• Bloomberg also reported that holdings in gold-backed ETFs have continued to decline. The flow of investment, and therefore metal, in and out of funds tracked by Bloomberg had a 0.5 correlation with monthly price changes in the five years leading up to late 2022. Then, the relationship suddenly broke, with ETF investors beginning to sell, even as central bank purchases drove up the price.

Opportunities

• According to BMO, there are currently more sellers than buyers of assets. In addition to the usual supply of junior miners hoping to be acquired, there are also many cash-flowing mines or permitted projects available for sale or partnership.
• Bloomberg reported that the board of Gold Fields approved a $195 million renewable energy project at the St. Ives mine in Western Australia. The project, the largest in the Gold Fields portfolio to date, will supply 73% of the mine’s electricity requirements. Construction will start in May and is expected to be operational by the end of 2025.
• Morgan Stanley notes that net non-commercial positioning for gold had fallen in the first few weeks of the year to the lowest since mid-October, as long positions were reduced. However, this trend has sharply reversed with gold’s recent rally, driven by a jump in long positions, while short positions have remained largely unchanged.

Threats

• BMO highlights that, assuming current spot commodity prices, there is potential for Sibanye Stillwater’s leverage ratio (net debt/adjusted EBITDA) to increase to 2.4x, which is just below the debt covenant requirement of 2.5x.
• In congressional testimony last week, Chair Jerome Powell emphasized that the central bank needs “just a bit more evidence” that inflation is headed toward its 2% target before lowering borrowing costs. A hotter-than-expected inflation reading, as happened last month, would be a setback for further gains in precious metals, which do not offer a yield and benefit from a lower-rate environment, according to Bloomberg.
• Bloomberg reported that the ever-higher prices reached by gold are turning Dubai’s traditional bazaar into more of a window-shopping experience, with purchases plummeting at the Gold Souk, according to salespeople at numerous shops.

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This commentary should not be considered a solicitation or offering of any investment product. Certain materials in this commentary may contain dated information. The information provided was current at the time of publication. Some links above may be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (12/31/2023):

Delta Air Lines

Boeing Co/The

Azul SA

United Airlines

Japan Airport Terminal

Mercedes-Benz Group AG

Porsche Automobil Holding SE

LVMH

Kering SA

Cie Financiere Richemont SA

Nike Inc.

SilverCrest Metals Inc.

Calibre Mining Corp.

B2Gold Corp.

Ramelius Resources Ltd.

Gold Road Resources Ltd.

Gold Fields Ltd.

Sibanye Stillwater Ltd.

*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.

The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks. The Russell 2000 Index® is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small-cap index.

The Hang Seng Composite Index is a market capitalization-weighted index that comprises the top 200 companies listed on Stock Exchange of Hong Kong, based on average market cap for the 12 months. The Taiwan Stock Exchange Index is a capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange. The Korea Stock Price Index is a capitalization-weighted index of all common shares and preferred shares on the Korean Stock Exchanges.

The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar. The S&P/TSX Canadian Gold Capped Sector Index is a modified capitalization-weighted index, whose equity weights are capped 25 percent and index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks. The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The S&P/TSX Venture Composite Index is a broad market indicator for the Canadian venture capital market. The index is market capitalization weighted and, at its inception, included 531 companies. A quarterly revision process is used to remove companies that comprise less than 0.05% of the weight of the index, and add companies whose weight, when included, will be greater than 0.05% of the index.

The S&P 500 Energy Index is a capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500. The S&P 500 Materials Index is a capitalization-weighted index that tracks the companies in the material sector as a subset of the S&P 500. The S&P 500 Financials Index is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period. The S&P 500 Industrials Index is a Materials Index is a capitalization-weighted index that tracks the companies in the industrial sector as a subset of the S&P 500. The S&P 500 Consumer Discretionary Index is a capitalization-weighted index that tracks the companies in the consumer discretionary sector as a subset of the S&P 500. The S&P 500 Information Technology Index is a capitalization-weighted index that tracks the companies in the information technology sector as a subset of the S&P 500. The S&P 500 Consumer Staples Index is a Materials Index is a capitalization-weighted index that tracks the companies in the consumer staples sector as a subset of the S&P 500. The S&P 500 Utilities Index is a capitalization-weighted index that tracks the companies in the utilities sector as a subset of the S&P 500. The S&P 500 Healthcare Index is a capitalization-weighted index that tracks the companies in the healthcare sector as a subset of the S&P 500. The S&P 500 Telecom Index is a Materials Index is a capitalization-weighted index that tracks the companies in the telecom sector as a subset of the S&P 500.

The Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals. The weights of components are based on consumer spending patterns. The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

The S&P Global Luxury Index is comprised of 80 of the largest publicly traded companies engaged in the production or distribution of luxury goods or the provision of luxury services that meet specific investibility requirements.

The Producer Price Index (PPI) is a family of indexes that measures the average change over time in selling prices received by domestic producers of goods and services.

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