Stocks and bonds are selling off sharply, while precious metals are on fire. The US dollar is sharply lower, while crude oil is up modestly.
After a three-day weekend in the US, markets are a mess thanks to geopolitical and government bond concerns. On the first score, President Trump ratcheted up his threats to take control of Greenland – saying he’d slap eight European countries with additional tariffs if they didn’t back his move to annex the island. That’s raising investor concerns about a punishing new trade war, or as an even more-extreme outcome, widespread foreign selling of US Treasuries and other assets.
SPY, TLT, GLD, SLV (YTD % Change)
Data by YCharts
Meanwhile, global bond yields are surging after a lousy debt auction in Japan prompted concerns over Japanese fiscal health to boil over. Yields on Japanese 40-year government bonds climbed above 4% for the first time ever, while 30-year yields jumped the most since last year’s “Liberation Day” global market selloff.
Prime Minister Sanae Takaichi is trying to bolster the Japanese economy by slashing taxes and boosting spending – but the government is buried in debt. Yields on Japanese bonds have been rising for months in response, but today’s selloff was much more aggressive. Since other governments (including the US) are in a similar boat, the selloff went global. The yield on the US 30-year Treasury Bond just hit a four-month high of 4.94%.
The biggest beneficiary of all this chaos? Precious metals. Gold surged again – up more than $140 an ounce, or about 3%. Silver rose almost 8% to within $5 of a hundred bucks an ounce. Gold is up 73% in the last 12 months as a safe haven investment in an increasingly unstable world. For its part, silver has more than tripled.
