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The Dow and the S&P 500 Futures dipped after a disappointing earnings report from Walmart and continued weakness in Apple Inc. (AAPL) and Tesla (TSLA)...

This Issue with Gold, Inflation, and GameStop Dear No, The Dow and the S&P 500 Futures dipped after a disappointing earnings report from Walmart and continued weakness in Apple Inc. (AAPL) and Tesla (TSLA). The market weakness accelerated after the U.S. Labor Department announced a larger increase in new unemployment filings than expected. The dip comes a day after the Dow set a new record. Chevron (CVX) and Verizon (VZ) helped propel the index to an all-time high on news that Warren Buffett had taken a larger position in both U.S. companies. That said, tech stocks continued to show some weakness on valuation concerns, which pulled the Nasdaq and S&P 500 into negative territory. Let's dive into the top stories on Thursday morning. The Circus Comes to Washington At noon, the House Financial Services Committee will call on multiple CEOs to testify on the recent surge and plunge of GameStop stock and the complicated events surrounding digital brokerage Robinhood. During the event, Robinhood's CEO Vlad Tenev, hedge fund manager Gabe Plotkin, Reddit's CEO Steve Huffman, and Citadel's Kenneth Griffin and Keith Gill will testify. I'm expecting a significant amount of political posturing and anti-Wall Street sentiment. Congressional leaders will center their criticism around Robinhood's decision to limit investor orders and transactions at the mania's height. There will also be a significant focus on a process called "Payment for Order Flow," a practice where brokerages route trades to market makers to ensure consumers get the best price paid. There's just one problem. The only witness who understands this oft-misunderstood practice is Ken Griffin. This entire fiasco is a market infrastructure and regulatory problem, but Congress invited no market infrastructure experts (outside of Griffin) or regulators to address the core issues. With people flying blind around the REAL problems, it could create a problem for retail investors. Any threat to Payment for Order Flow or other new policy that might include a transaction tax for trading would be foolish as it would create new frictions in the market and potentially weaken liquidity. Expect more political show than an actual problem-solving. Busy Earnings Day Today is a busy earnings day with a number of Blue-Chip stocks reporting results. Global retail giant Walmart (WMT) leads the morning roster of reports. The company reported an earnings per share of $1.39, well below the analysts' $1.50. Walmart said that repayment on taxes to the United Kingdom impacted its profitability. Meanwhile, the firm did beat revenue estimates, and U.S. sales jumped 8.6% in the fourth quarter. That said, the news has fueled a 5% selloff in premarket hours. There was some good news to this report. The company's eCommerce sales surged 69% year-over-year, while Sam's Club digital sales jumped 42% y-o-y. Meanwhile, the firm announced a 2% jump to its dividend and authorized a new $20 billion share buyback program. Any pronounced decline in Walmart will set up potential long-term buying opportunities. This is one of the few U.S. companies that have an absolute stranglehold on its competition. Not only is it the largest physical retail company in the United States, but it is also the nation's largest grocery chain. Today, 90% of Americans live within 10 miles of a Walmart location. Overall, earnings have been strong this quarter. We'll continue to monitor reports as they roll out and dissect any other positive catalysts, including another potential round of stimulus. Should Washington send out another round of checks to Americans, it would be good news for Walmart and other retailers. Heavy Metals Finally, I received a question about any insight into the Gold and Silver markets. On the gold side, the yellow metal fell to a 2-month low this morning. The combination of rising U.S. yields, a stronger dollar, and institutional flows into Bitcoin remain headwinds. Gold is now on a five-day losing streak. Right now, the key issue is the rising yields in the bond market because gold does not provide any dividends. I recognize that there is broad anticipation of inflation in the years ahead. Breakeven inflation is the highest it's been since August 2014 – at 2.2%. There's just one problem. To the U.S. Federal Reserve, the bigger threat isn't inflation – it's deflation. The central bank hasn't reached its inflation level to rise above 2% over ten years. And according to the official numbers (despite our best efforts to point to the rising prices of real assets), there are still large pockets of deflation in the economy. Those pockets of deflation are predominately fueled by technological advances, tighter supply chains, lower production costs, and continued uncertainty about the economy (people will wait for lower prices if they can, which has a deflationary impact). And the very idea that we are sitting in the middle of an asset bubble is a threat in itself. If any bubble bursts, it could create new threats to any economic recovery. While that might suggest a rush back into gold and other safe-haven assets, remember that gold prices have declined in the middle of a rush to the exits. In March 2009, gold fell UNDER $700, and in March 2020, gold dropped to around $1,400. I recognize that it sounds crazy that the U.S. increases its money supply by $4 trillion, and the concern is deflation. But it's economics – and it's called the Dismal Science for a reason. It doesn't mean that gold is a bad investment. You should have an allocation to precious metals. I simply argue that there are broader pressures and assumptions that few discuss. I will talk about silver tomorrow, which I'm far more bullish on. That's all for today. If you have any questions or topics you'd like me to discuss, please don't hesitate to email the team at feedback@haveninvestmentresearch.com. Cheers, Garrett Baldwin Market Conditions with Dr. Bauer Once again, the S&P 500 looks positive this morning despite small downturns in Apple Inc. (AAPL) and Tesla (TSLA) share. These are two of the highest weighted stocks on the index, and broad pullbacks typically correlate with declines in these companies. The 5-day/13-day Exponential Moving Average is a positive gauge to identify broader market sentiment. As the chart indicates above, the last crossover into positive territory occurred on February 3, 2021. The positive sentiment is good news for Long Only options traders who are looking for continued support. Enjoy your Thursday, Dr. Gregor Bauer © 2021 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM HAVEN INVESTMENT RESEARCH (HIR) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: HIR and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of HIR's communications should be considered or used as personalized investment advice. HIR recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: HIR communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by HIR nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. HAVEN INVESTMENT RESEARCH IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: HIR, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. 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