{"id":7692,"date":"2013-06-26T16:01:49","date_gmt":"2013-06-26T20:01:49","guid":{"rendered":"http:\/\/www.pgm-blog.com\/?p=7692"},"modified":"2013-06-26T16:01:49","modified_gmt":"2013-06-26T20:01:49","slug":"the-week-of-june-24-2013-in-review","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/the-week-of-june-24-2013-in-review\/","title":{"rendered":"Review of June, Second Quarter and First Half of 2013"},"content":{"rendered":"<p style=\"text-align: center;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-7707\" alt=\"Investor-hope-despair\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/investor-hope-despair.png\" width=\"347\" height=\"209\" \/><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7706 alignright\" style=\"font-size: 13px;\" alt=\"wall_street_roller_coaster\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/wall_street_roller_coaster.gif\" width=\"185\" height=\"148\" \/><\/p>\n<p>Dear<strong>\u00a0PGM Capital<\/strong>\u00a0Blog readers,<\/p>\n<p>Friday June 28. 2013. was the last trading day for the month of June and marked the end of the second quarter and first half of 2013.<br \/>\nIn this blog edition we we&#8217;ll review the most important events of last week, the month of June and second quarter 2013 and will provide an outlook for the 3rd quarter and second half of 2013.<\/p>\n<p>Some of the most important events that happened in the global capital markets, the world economy and the world of money in the week of June 24th 2013.:<\/p>\n<ul>\n<li>Best first Half for the DOW-Jones Industrial since 1999.<\/li>\n<li><span style=\"font-size: 13px;\">Credit crunch confusion sends China&#8217;s stock market on wild ride.<\/span><\/li>\n<li>Gold and Silver prices experienced worst quarter in 30 years.<\/li>\n<li>Bond Fund Outflows Hit Record Level on Tapering Fears.<\/li>\n<\/ul>\n<p><span style=\"color: #0000ff;\"><strong>Best first Half for the DOW-Jones Industrial since 1999.<\/strong><\/span><\/p>\n<p>On Friday June 28th, the Dow and S&amp;P-500 dropped respectively 114.89 and 6.92 points to end the week at respectively 14,909.60 and 1,606.28 as investors were reluctant to jump in following a three-day rally, but major averages still capped the volatile quarter with gains.<\/p>\n<p>USA stocks finished lower for the month of June, logging their first monthly drop this year. But all three major averages logged their third winning quarter in four. And so far for the year, the Dow has surged more than 14 percent as can be seen from below chart.<\/p>\n<p style=\"text-align: center;\">\u00a0<a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/Screen-Shot-2013-06-29-at-6.08.32-AM.png\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7746 aligncenter\" alt=\"DOW-30 H1-2013 Chart\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/Screen-Shot-2013-06-29-at-6.08.32-AM.png\" width=\"482\" height=\"270\" \/><\/a><\/p>\n<p><span style=\"font-size: 13px;\">Althoug the DOW ended the month of June in the red it <\/span><span style=\"font-size: 13px;\">posted its strongest first half of the year since 1999.<\/span><\/p>\n<p>The\u00a0<a title=\"VOLATILITY S&amp;P 500 (^VIX)\" href=\"http:\/\/finance.yahoo.com\/q?s=^VIX\" target=\"_blank\"><strong>CBOE Volatility Index (VIX)<\/strong><\/a>, widely considered the best gauge of fear in the market, finished unchanged below 17.<\/p>\n<p>Please see below table for more detailed performance of the major USA Indexes in the week of June 24, the month of June, 2nd Quarter and first Half of 2013.<\/p>\n<h4><span style=\"color: #0000ff;\">U.S. Major Index Performance<\/span><\/h4>\n<table>\n<tbody>\n<tr>\n<td><span style=\"color: #0000ff;\">\u00a0<\/span><\/td>\n<td><span style=\"color: #000000;\"><strong>Last<\/strong><\/span><\/td>\n<td><span style=\"color: #000000;\"><strong>Today&#8217;s % Change<\/strong><\/span><\/td>\n<td><span style=\"color: #000000;\"><strong>1 Week % Change<\/strong><\/span><\/td>\n<td><span style=\"color: #000000;\"><strong>MTD % Change<\/strong><\/span><\/td>\n<td><span style=\"color: #000000;\"><strong>QTD % Change<\/strong><\/span><\/td>\n<td><span style=\"color: #000000;\"><strong>YTD % Change<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #000000;\"><strong>DOW<\/strong><\/span><\/td>\n<td><span style=\"color: #0000ff;\">14,909.60<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-0.76%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">0.74%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-1.36%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">2.27%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">15.28%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #000000;\"><strong>S&amp;P 500<\/strong><\/span><\/td>\n<td><span style=\"color: #0000ff;\">1606.28<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-0.43%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">0.87%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-1.50%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">2.36%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">14.54%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #000000;\"><strong>NASDAQ<\/strong><\/span><\/td>\n<td><span style=\"color: #0000ff;\">3403.25<\/span><\/td>\n<td><span style=\"color: #0000ff;\">0.04%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">1.37%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-1.52%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">4.15%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">14.96%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #000000;\"><strong>Russell 2000<\/strong><\/span><\/td>\n<td><span style=\"color: #0000ff;\">977.48<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-0.25%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">1.43%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-0.68%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">2.73%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">15.09%<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"color: #000000;\"><strong>CBOE VIX<\/strong><\/span><\/td>\n<td><span style=\"color: #0000ff;\">16.81<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-0.30%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-11.06%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">3.13%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">32.36%<\/span><\/td>\n<td><span style=\"color: #0000ff;\">-6.71%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>On the economic front, business activity index in the Midwest fell in June to 51.6 from 58.7 in May, according to the Institute for Supply Management-Chicago. A Reuters survey of economists on average expected a median reading of 56.0 in June versus the May figure of 58.7.<\/p>\n<p id=\"story_continues_1\">In a report, the Bureau of Economic Analysis said, that the US economy grew by less than previously estimated in the first quarter of the year.<\/p>\n<p>The US Q1-2013, Gross domestic product &#8211; which measures annual economic output &#8211; \u00a0was revised down to 1.8 percent from an earlier estimate of a 2.4 percent rise.<\/p>\n<p>Weak business investment, a slowdown in consumer spending and falling exports led to the downward revision.<\/p>\n<p>The economy also continued to be slowed by cuts in government spending, which fell in the first quarter at an annual rate of 4.8 percent, shaving about 0.9 percentage points off growth.<\/p>\n<p>Earlier this month the International Monetary Fund urged the US government to repeal the huge federal budget cuts introduced this year, denouncing them as &#8220;excessively rapid and ill-designed&#8221;, and warning they would be a significant drag on growth this year.<\/p>\n<p><span style=\"color: #0000ff;\"><strong><span style=\"font-size: 13px;\">Credit crunch confusion sends China&#8217;s stock market on wild ride<\/span><\/strong><\/span><\/p>\n<p>China\u2019s stocks plunged on Tuesday June 25, 2013 \u00a0with \u00a0more than 6% sending the\u00a0<a title=\"CSI 300 Index\" href=\"http:\/\/finance.yahoo.com\/echarts?s=000300.SS+Interactive#symbol=000300.ss;range=1y;compare=;indicator=dividend+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;\" target=\"_blank\">CSI 300 Index<\/a>\u00a0down 20 percent from this year\u2019s high as can be seen from below chart.<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/Screen-Shot-2013-06-28-at-4.49.34-PM.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-7701 aligncenter\" alt=\"YTD CSI-300 Chart\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/Screen-Shot-2013-06-28-at-4.49.34-PM.png\" width=\"562\" height=\"248\" \/><\/a><\/p>\n<p>The wild ride in the Chinese stock market on Tuesday tells the tale of confusion about the depth of China&#8217;s credit crunch and the authorities&#8217; ability to control events.<\/p>\n<p>The trigger for the afternoon rebound was comments from the central bank that it would guide interest rates to &#8220;reasonable levels&#8221; and that cash in the financial system would be managed flexibly.<\/p>\n<p>China&#8217;s recent credit explosion started in 2009, when Beijing reacted to the West&#8217;s banking bust and recession by ordering a massive programme of investment, principally in public infrastructure, offices and flats. That succeeded in restoring strong growth to the economy \u2013 and, indeed, helped to prevent a bigger global downturn<\/p>\n<p><span style=\"color: #0000ff;\"><strong>Gold and Silver prices experienced worst quarter in 30-years<\/strong><\/span><\/p>\n<p>Gold futures dropped sharply on Wednesday, hitting multiyear lows on growing expectations the U.S. Federal Reserve will slow the pace of economic stimulus later this year.<\/p>\n<p>On Thursday June 27th, after a good start, at around 1:30 pm EST, fund managers started dumping their gold position in order to do <strong><a title=\"Definition of 'Window Dressing'\" href=\"http:\/\/www.investopedia.com\/terms\/w\/windowdressing.asp\" target=\"_blank\">window dressing<\/a><\/strong> on their portfolio for them to show better Q2-2013 results to the outside world.<\/p>\n<p>As a consequence of this the price of Gold went down the day with US$ 24.40 to close at a 3-year low of US$ 1,200.80 an oz as can be seen from below chart.<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/nygold-dd-June-27-2013.gif\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7756 aligncenter\" alt=\"Gold Price History on June 27 2013\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/nygold-dd-June-27-2013.gif\" width=\"529\" height=\"210\" \/><\/a><\/p>\n<p>Gold and Silver have experienced their worst quarter in 30-years and are down in the first half of this year with respectively 26 and 36 percent as can be seen from below charts.<\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/gold_6_month_o_usd.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-7760\" alt=\"gold_6_month_o_usd\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/gold_6_month_o_usd.png\" width=\"256\" height=\"176\" \/><\/a><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/silver_6_month_o_usd.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-7761\" alt=\"silver_6_month_o_usd\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/silver_6_month_o_usd.png\" width=\"256\" height=\"176\" \/><\/a><\/p>\n<p>Currently the price of Gold is far below the breakeven production costs of most mineres. Due to this the world\u2019s two largest gold mining companies have announced plans to start mottballing some mines and reduce their workforce.<\/p>\n<p>In accordance with an article of <a title=\"First Quarter 2013 True All-In Cost Silver Industry Figures: Unsustainable Silver Prices\" href=\"http:\/\/seekingalpha.com\/article\/1496552-first-quarter-2013-true-all-in-cost-silver-industry-figures-unsustainable-silver-prices\" target=\"_blank\">&#8220;Seeking Alpha&#8221;<\/a> of June 12th 2013, the average production costs of silver was at the end of Q1-2013 US$ 23.70 an oz, which is 37.27 percent higher than the closing price of Silver of Friday June 28, 2013, of US$ 19.45 an oz<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/Silver-producing-costs.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-7777 aligncenter\" alt=\"Silver producing costs\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/Silver-producing-costs.png\" width=\"480\" height=\"166\" \/><\/a><\/p>\n<p><span style=\"color: #0000ff;\"><strong>Bond Fund Outflows Hit Record Level on Tapering Fears.<\/strong><\/span><\/p>\n<p>In the month of June,\u00a0investors have unloaded bonds at a record pace. The combined outflow of US$ 47.2 billion is the highest in any month on record, sending the yield of the 10-year note to close the month of June at a 1-5 year high of 2.47 percent, which is a 44.83 percent rise for H1-2013 as can be seen from below chart.<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/Screen-Shot-2013-06-29-at-6.03.31-AM.png\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-7772 aligncenter\" alt=\"Screen Shot 2013-06-29 at 6.03.31 AM\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/Screen-Shot-2013-06-29-at-6.03.31-AM.png\" width=\"553\" height=\"243\" \/><\/a><\/p>\n<p><span style=\"color: #0000ff;\"><strong>Comments:\u00a0<\/strong><\/span><\/p>\n<p>The analysis, statement and comments provided in this section of this blog article, are based solely\u00a0on professional and dispassionate analysis of the points discussed here above. By no means it is our intention to interfere in the internal policy of a country, organization or person.<\/p>\n<p>Friday June 28th 2013, \u00a0was the last trading day of June, the 2nd quarter of 2013 and first half of 2013. Gold has had its worst month ever, and its worst quarterly performance since 1968, plunging a whopping 25 percent.<\/p>\n<p>Both\u00a0gold and silver are right now trading respectively\u00a017.61 and 37.27 percent below\u00a0their production costs, which is unsustainable and will\u00a0force\u00a0gold and silver producers to cut production or even close some mines, which will put the suply side of the curve under pressure.<\/p>\n<p>Gold is now 35.2 percent down compared to its high of September 6 2011 of US$ 1,889.70 an ounce, which is interesting because it was virtually identical to the 34% high-to-low down-move that we saw in gold in 2008.<\/p>\n<p>The down-move in silver is now at roughly 60%, and, again, that is what the silver market experienced during the 2008 meltdown.<\/p>\n<p>This makes us reasonably comfortable that both gold and silver are nearing the end of this corrective phase since they have followed the same path as the 2008 corrections.\u00a0 We are now looking for signs that this is a bottom, despite the weakness, and that there may\u00a0be a turn for the better from this point onward.\u201d<\/p>\n<p>Both gold and Silver are now at their long-term support level, similar as in\u00a02008, and before that 2005. Both times, gold went on to jump over 80% in the following twelve months. A repeat of that from this point in time, would take gold north of \u00a0US$ 2,500 in the coming 12 months as can be seen from below chart.<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/KWN-Fitzaptrick-gold-6-25.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7782 aligncenter\" alt=\"Fitzaptrick gold June 25 2013 chart\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/KWN-Fitzaptrick-gold-6-25.jpg\" width=\"471\" height=\"484\" \/><\/a><\/p>\n<p>When silver went through its 2008 correction, it got down to levels below US$9 an oz, then we saw the silver price multiply by a factor of over 5 times.\u00a0 So assuming that we are near the end of the correction in silver, and history repeats itself, the new leg of the bull-market in silver would take silver at least to new all-time highs, but we could look for a target as high as US$ 100 for silver as can be seen from below chart.<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/KWN-Fitzpatrick-silver-6-25.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7786 aligncenter\" alt=\"Fitzpatrick silver June 25 chart\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2013\/06\/KWN-Fitzpatrick-silver-6-25.jpg\" width=\"465\" height=\"490\" \/><\/a><\/p>\n<p>Basically this means that when a cycle low is due and major support levels are tested and held during that cycle,\u00a0you may end up with\u00a0a trend-reversal setup and a major high that could last for years.<\/p>\n<p>The low that&#8217;s now forming in gold may well be your last chance to position yourself before gold&#8217;s next bull leg unfolds.<\/p>\n<p>Like we stated in our last weekend edition, markets behave\u00a0in a manic depressive fashion and subsequently\u00a0go from one extreme to another. That&#8217;s how they cause the most amount of pain and gain for investors.<\/p>\n<p>One of Warren Buffett&#8217;s famous quote migh be applicable for gold and silver:<\/p>\n<blockquote><p><span style=\"color: #0000ff;\"><strong>Be Fearful When Others Are Greedy and Greedy When Others Are Fearful<\/strong><\/span><\/p><\/blockquote>\n<p>As gold bottoms, it means there&#8217;s also going to be a shift in many other markets and trends. From stocks to bonds, to currencies and more.<\/p>\n<p>Even entire political systems will be in flux. Gold is the world&#8217;s most sensitive barometer and a leading indicator for all those kinds of things.<\/p>\n<p>So when gold changes trend, as it&#8217;s about to do in a major way, you can bet that the winds of change will also be blowing in many different markets, sectors and countries all over the globe.<\/p>\n<p>Before following any investing advice, always take your investment horizon and risk tolerance into consideration and keep in mind that the price of precious metals as well as the stocks of their producers can be very volatile and that sharp corrections may happen in the short term.<\/p>\n<p>Yours Sincerely,<\/p>\n<p>Eric Panneflek<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dear\u00a0PGM Capital\u00a0Blog readers, Friday June 28. 2013. was the last trading day for the month of June and marked the end of the second quarter and first half of 2013. In this blog edition we we&#8217;ll review the most important events of last week, the month of June and second quarter 2013 and will provide<a href=\"https:\/\/www.pgmcapital.com\/nl\/the-week-of-june-24-2013-in-review\/\">[&#8230;]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,8,9,10,19,13,15,16,22,1,17,18],"tags":[],"class_list":["post-7692","post","type-post","status-publish","format-standard","hentry","category-commodities","category-debt-crisis","category-emerging-markets","category-eric-panneflek","category-financial-news","category-market-volatility","category-pgm-capital","category-precious-metal","category-the-week-in-review","category-uncategorized","category-us-dollar","category-world-economic-outlook"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/7692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=7692"}],"version-history":[{"count":0,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/7692\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=7692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=7692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=7692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}