Magnificent 7 in a Bear Market, Gold, Carbon Tax Con
The Trump Dump, RAMP & ZEFI
Construction spend in the U.S. picked up in February, reversing a January decline, the Commerce Department said Tuesday. U.S. construction spending increased by 0.7% to an annualized rate of $2.196 trillion last month, up from $2.18 trillion a month earlier. Economists polled by The Wall Street Journal had expected a smaller 0.3% increase.
Decent news on construction but U.S. manufacturers appear to have fallen back into a slump. The manufacturing index of the Institute for Supply Management dropped to 49% in March from 50.3% in the prior month. Any number below 50% signals contraction. There was a steep increase in input prices fed through to a greater rise in manufacturing selling prices during March. Output price inflation picked up for a fourth successive month to a 25-month high. Another stagflation sign.
Looking at the markets, a bad sign is the Magnificent 7 stocks as measured by the MAGs etf have entered a bear market. These were the stocks leading the market so not a good sign to see their decline. To be fair there is a lot of manipulation here as the far left attack on Musk's Tesla has driven that stock down from $480 in December to almost $220 in March. That is a whopping decline of about -54%.
MAGS ETF
However, no doubt the market leader has been Nvidia NVDA and that stock is deep in bear territory. It looks like it could drop further into the support area.
According to my short barometer, the shorts had it wrong as they started to cover in January and February to the lowest level in a year. Many missing the recent bottom, but looks like they are adding short positions back on.
Gold Another Record
Gold hit another record high this morning on Comex. We will soon get gold ETF flows for March and I would bet North American investors were buyers again. On Comex almost 35,000 contracts of Gold took delivery on the April contract, amounting to approximately $US11 billion.
However, the gold stocks are still lagging and I see no sign of North American investors coming in yet. In fact there was no real increase in volume with GDX, GDXJ and the NUGT long etf. It appears retail investors are still betting against the gold stocks with higher volume in the DUST short ETF.
Numerous times I have pointed out we are in a period similar to the 1970s/80s. Gold has posted it's strongest quarterly gain since 1986. London Fix Gold is up about +19% in Q1 2025. There was also numerous other stronger quarterly gains in the 1970s.
The fight for physical gold is just getting started. Germany is making waves again about Germany gold held in New York. Marco Wanderwitz, a member of the center-right CDU and outgoing Bundestag lawmaker, has revived questions about the security of the gold.“Official representatives of the Bundesbank must personally count the bars and document their results,” he told Bild. New York holds, 1,236 tonnes of German gold and England 432 tonnes.
Con Man Carney's Carbon Tax
It was nice to see prices come down at the gas pumps in Canada as the carbon tax came off. However, Carney has left the industrial carbon tax in place, which will still be passed along to consumers. Hopefully there is reductions in home heating but we will see. Conveniently we will not know to after the election. Maybe the oil&gas distributors will be charged and it is passed on, but don't expect food prices to come down. The compounding effect of the tax remains.
The carbon tax accumulates as food products move through the supply chain. Farmers also face rising costs on items like fertilizer, fuel, and equipment.
“By the time a loaf of bread reaches the consumer, multiple layers of carbon tax have been applied at different stages, increasing the final retail price,” said Sylvain Charlebois, senior director of Dalhousie University’s Agri-Food Analytics Lab. “While politicians often focus on the direct tax that consumers see at the register, the real economic pressure accumulates throughout the supply chain. And Carney’s policy shift does little to alleviate this burden.”
Even with consumer carbon tax gone, the Carney Liberals will take more money out of Canadians’ pockets with 2025 payroll tax hikes and higher alcohol taxes that hit April 1st. Also the aluminum tariffs that effect beer cans from the U.S. I guess we can't make aluminum cans in Canada.
How do you know when crypto has reached its peak? when the President of the U.S. creates his own meme coin. The TRUMP coin has gone from $70 to $10, what a pump and dump.
Ramp Metals - - - TSXV:RAMP - - - - Recent Price $1.05
Entry Price $0.47 - - - - - - Opinion - hold
The Company has initiated drilling at its flagship Rottenstone SW property. Previously RAMP completed three drill holes near Ranger-01, where 73.55 g/t Au over 7.5m was identified previously. Each drill hole at Ranger has encountered the quartz diorite intrusion where the gold was previously intersected. The core is being flown back to the core shack daily where it will be logged, sampled, cut, and sent to the lab for assays.
RAMP plans to drill a total of 12-15 holes across three mineralized zones including Ranger, Rush, and Rogue. More information on the three mineralized zones can be found in the Ramp Metals January 20th press release. The stock is close to it's first support level. I expect that will hold and the stock probably go back up over $1.20 with drill results speculation. I may suggest part profits then.
Zefiro Methane - - - - E:ZEFI - - - - Recent Price - $0.58
Entry Price - $0.90 - - - - - - - Opinion - buy
ZEFI subsidiary, Plants & Goodwin, has successfully completed a package of commonwealth of Pennsylvania-financed projects in Clarion county, Pennsylvania. Specifically, P&G remediation specialists plugged a tranche of 18 orphan oil and gas well across the county, which included one site that was located six feet from a residence's water well that the Pennsylvania Department of Environmental Protection (PADEP) confirmed was releasing excess iron into the site's drinking water, rendering it unusable.
As an established and certified service provider to several federal and state agencies across the country, including the PADEP, P&G was engaged as a subcontractor by Northwind Site Services to undertake this time-sensitive remediation project to restore residents' drinking water supply. Between contributions from P&G and other service providers, the total cost to plug this well was nearly $500,000, which is significantly higher than the average cost of $105,000 per well plugged. The PADEP has identified over 27,000 similar orphaned and abandoned well sites across the commonwealth, and is currently working with P&G and other contractors to prioritize those posing the greatest risks to public health.
These more costly wells will increase revenues and cash flow, but not necessarily profits. I believe the stock has bottomed but will have to get through resistance in the $0.60 to $0.70 area.
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