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Gold's shining rally has taken a beating, but prominent gold booster Peter Schiff believes that the precious metal's time isn't over, thanks to his expectation of Federal Reserve hesitation.
Gold was pacing for its worst day since December 2013 on Tuesday, plummeting almost 3 percent as the U.S. dollar gained due to increasing expectations that the Fed is set to raise rates in December.
Rising rates tend to be bad for gold because they make nonyielding gold look worse in comparison. Rising rates also tend to increase the value of the dollar, which also hurts gold because each more-valuable dollar can buy more gold.
Schiff sees gold's rough Tuesday as a result of investors selling the metal in anticipation of a rate hike. But Schiff believes investors have it all wrong. The Fed's main condition for interest rate hikes is that economic data, particularly employment and inflation data, have shown an improving economy.
"I'm certain that all this talk about a recovery is wrong," Schiff said Tuesday on CNBC's "Futures Now." "The recovery is an illusion, it's just another gigantic bubble."
Schiff believes that economic data has "actually gotten a lot worse since [the Fed] didn't raise rates in September." Add on the uncertainty surrounding November's presidential election, and Schiff is doubtful that the Fed will even risk raising interest rates this year.
"Everybody wants to go to heaven, but nobody wants to die, and that is the problem," said Schiff. "We're never going to have a real recovery until we kill this phony recovery, but for political reasons, that's not going to happen."
Schiff, who has runs a gold selling business, has long been a critic of the Fed's policies, and is perennially bullish on gold. He has long been predicting collapses in the U.S. economy and the stock market that have not materialized.
The fed funds futures market currently pins the chance of the Fed raising rates by December at 63 percent, according to CME Group's FedWatch tool.
More market highs are on the way, according to a Wells Fargo strategist, who added there are a multitude of reasons why investors should still buy stocks.
Scott Wren, senior equity strategist at Wells Fargo Investment Institute, sees the market rallying all the way through 2017. Just how high could markets go?
Wren believes the S&P 500 Index could touch 2,290, and possibly even a little higher by the middle of next year.
"You're talking an excess of 8 percent, and that's why we still like stocks," he said last week on CNBC's "Futures Now."
This is even in light of the uncertainty surrounding November's presidential election.
While investors may be wary of market chaos following the election, Wren actually believes that the anxiety is misplaced based on what he's seen in the past during election time.
"Whatever the result is, the market's going to trade off of that for [two to four] weeks maybe," he said. "But then the market's going to get back to [focusing on] earnings and the economy over the next 6 to 12 months."
He added: "Whoever is president is going to have virtually nothing to do with that, so I think this election effect is going to be very short-lived."
In fact, Wren predicts that the only thing that may stop a market rally in its tracks is a series of rate hikes by the Federal Reserve over the next year.
While Wren sees the Fed raising rates twice between now and the end of 2017, he does believe that the market can weather the event as it has already priced in a December rate hike. But more than two over the next year could give the market an unpleasant surprise.
The S&P 500 traded slightly higher on Friday, paring losses from Thursday when the financial sector brought U.S. markets down fairly significantly.
The commodities' strategist who called the rally in crude this week says more gains are to come, as Saudi Arabia appears ready to play ball and scale back production—a move likely to boost oil prices.
"This speaks to the economic realities of lower oil prices that are really biting Saudi Arabia," said top RBC commodities analyst Helima Croft on CNBC's "Futures Now" this week. The world's largest oil producer, along with other major oil producers, has struggled economically with crude languishing below $50 per barrel.
"Saudi Arabia really had to give considerable ground to accommodate the Iranian demands to get the deal done," Croft told CNBC. "This is more than just a freeze. It's actually cutting from current levels."
A deal of this nature represents the first reduction since 2008. Once announced, the deal sent crude prices soaring over 5 percent on Wednesday before closing the week above $48. Now Croft, who has been calling for $50 oil for since the 2016 lows, explained that her firm remains bullish through the end of 2016, with the notion that a floor is now in place.
"It can continue to be choppy based on weekly stats, rig count numbers and broader macro trends," she added. "But we think we are done with sub-$40, barring a major macro meltdown panic, and firms the case for 50's by year end and trending into the 60's next year."
Croft told CNBC that her firm expects the pact to hold with a belief that the Saudis are willing to bear the lion's share of the reductions needed to get down to 32.5 million barrels of oil produced each day globally by OPEC members.
The agreement, slated to go into effect in November, would require Saudi energy minister Khalid al-Falih to oversee major production cuts in order to help reduce nearly 1 million barrels from the market on a daily basis.
Investors should brace themselves for a scary October for stocks, according to top technician Stephen Suttmeier.
"The worst three-month period of the year happens to be August through October," said Suttmeier. He noted that this weakness occurs in both a traditional market as well as during presidential election cycles. "What we are seeing right now is nothing unusual."
However, it's what he is seeing in one obscure indicator that has him anticipating a "deeper drawdown" in stocks.
"The risk is that a deeply overbought or tactically complacent VXV/VIX ratio, along with a lack of fear in the put/call ratios, limits upside and suggests some unfinished business to the downside in stocks," said Suttmeier.
He explained that the VXV/VIX ratio measures expectations of volatility three months out versus the expectations of volatility in the near term. Readings above 1.2 are overbought and readings below 1.0 are oversold.
"Tactical fear or oversold VXV/VIX readings below 1.0 have done a good job of calling market lows. The VXV/VIX closed at 1.306 on Friday," he added.
Rather than hit the panic button when the S&P 500 starts to slip back toward the 2,050-2,100 level, Suttmeier said investors should use the opportunity to buy the dip — as in the bigger picture he expects the large-cap index to eventually rise to 2,300.
"The good news is that we are getting closer to the time of the year when the seasonal mantra shifts from 'sell in May and go away' to 'buy in October and stay,'" he said. Suttmeier noted that the S&P 500 tends to rise an average of 5 percent during the period of November to April.
The S&P is tracking for its fourth consecutive positive quarter — with its best performance since the third quarter of 2015.
Despite all the uncertainty and rancor surrounding November's U.S. presidential election, one thing is clear: Past trends indicate that the economy could be facing a recession — and could drag the market down with it.
So believes Sven Henrich of NorthmanTrader.com, who crunched the historical figures that suggest, regardless of who becomes the next president, the markets could be in trouble. According to Henrich's analysis, data show that since 1960, 70 percent of new presidents face an economic downturn very early in their first term.
"Historically, that's not good for markets, as they correct between 13 to 40 percent during a recession," Henrich said last week on CNBC's "Futures Now."
Henrich contended that much of the trend could have to do with consumers' uncertainty during transitions between presidents, but he also believes that the coming election differs from those of the past. This, in turn, doesn't bode well for markets, and may heighten the chance of an economic slump.
"In this particular cycle, we're seeing something that we've never seen before in any U.S. election, and that is neither candidate, whether it's Hillary Clinton or Donald Trump, have a majority support within the population," said Henrich. "So no matter who wins, in January Americans are faced with a president that the majority doesn't support."
The latest NBC/Wall Street Journal poll showed that the lead by Democratic presidential candidate Clinton over Republican nominee Trump was narrowing, this ahead of Monday's first presidential debate.
"I have no idea how this is reflected in consumer confidence, but it doesn't seem to suggest that consumers will be very confident with their new president," he added.
One of Wall Street's largest firms has a clear message for investors: Keep calm and carry on with your long-term investment strategy.
"What you've seen investors doing is starting to chase other asset classes in a search for yield so they've been piling into things that they perceive as safe havens," explained JPMorgan's Stephen Parker on CNBC's "Futures Now" this week.
The bank's head of thematic equity solutions highlighted the recent popularity of minimum volatility exchange traded funds (ETFs). These instruments offer nervous investors the opportunity to invest in so-called safe haven stocks, such as utilities and consumer staples.
However, while these sectors currently offer attractive yields in a zero interest rate world, valuations are trading well above the market. For instance, consumer staples trade at 22 times forward earnings and utilities, which historically trade at a 20 percent discount to the market, are trading at a premium.
"When you think about safety, it is a reflection not just of the fundamentals, but also of the price you're paying," noted Parker. "We're telling clients to be cautious about chasing yields at this point."
CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.
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