The World Financial Report

World Financial Report – April 4th, 2019

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WORLD FINANCIAL REPORT ON RADIO APRIL 4th 2019
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CHARTS OF THE WEEK-QUOTES-QUICK HITS

-CHART OF THE WEEK: Pot Gives Canadian Stocks Their Best High in 19 Years. Will It Last? Pot stocks led Canada’s equity benchmark to its best first quarter since 2000, but strategists are questioning whether the rally has legs after gains slowed in March. The S&P/TSX Composite Index ended the quarter at 16,102.09, up 12 percent since the beginning of the year and just 3 percent off its record high of 16,586.46 reached last July. That followed an 11 percent slump in the fourth quarter. The index isn’t far from the 16,644-level that analysts predicted for the end of 2019, based on estimates gathered in December.

“We got in two months what we thought we’d achieve through the course of the year,” Shailesh Kshatriya, director of Canadian investment strategies at Russell Investments, said in a phone interview. “It’s a bit disconcerting.” The gains in global equity markets come down to two main factors: a rebound from the “overly negative move” in the fourth quarter and an increasingly dovish tilt from many of the world’s biggest central banks, Doug Porter, chief economist at Bank of Montreal, said in a note to clients. Cannabis stocks led the first-quarter gains, making up six of the benchmark’s 10 best performers. However, strategists argue that rate-sensitive sectors like banks, real estate, utilities and telecommunications are the safest bets going forward after U.S. and Canadian yield curves inverted, potentially signaling an impending recession. Bloomberg

-CHART OF THE WEEK: History Shows Stocks Are the Best Bet to Build On ‘Everything Rally.’ The unusual surge in both U.S. stocks and bonds in the first quarter raises a difficult question for investors: Which trend is the better friend? The answer is equities, according to Macro Risk Advisors. They mined more than three decades of data to come up with that result and show how “exceptional” the start of 2019 has been and what may come next.

When both equities and bonds have shown similar levels of strength, the S&P 500 tends to rally 8.3 percent in the next six months and 13.5 percent over the following 12 months, with an 85 percent hit rate, derivatives strategist Vinay Viswanathan wrote in a note Tuesday, adding that the track record for bonds is more mixed. “For investors who believe that the economy will remain strong and that Fed Chairman Powell will continue to support equity prices, we think right now is a tactical time to own U.S. equities based on historical forward returns,” Viswanathan wrote. The bull market is underpinned by “solid” corporate earnings, contained inflation and an explicitly patient Federal Reserve that hasn’t shown much of an urge to extinguish the advance in risk assets, the strategist wrote. Bloomberg

-This is the ‘canary in the coal mine’ for stocks, market analyst warns. Stocks are taking a breather after a monster rally to begin the second quarter. Major gains in the first three months of the year also brought indexes back within range of record levels with the Dow Jones Industrial Average less than 800 points from its high. Gina Sanchez, CEO of Chantico Global, said be wary of the market bounce as there are troubling developments on the horizon. “We’re back to the levels as if the December decline never happened and I think what’s interesting is what’s pushing that is the Fed has decided to not hike for the rest of 2019 and only once in 2020. Now that is a double-edged sword, that’s a canary in the coal mine,” Sanchez said Monday on CNBC’s “Trading Nation” segment. CNBC

-CHART OF THE WEEK: Fear and Greed Are Both AWOL as U.S. Stocks Approach Record Highs. As U.S. stocks continued to climb toward a record, a major benchmark surpassed an ominous level for volatility watchers. The S&P 500 topped 2,875 for the first time in six months, a level the index initially passed 16 months ago one day before a record blowup in the Cboe Volatility Index. A look under the market’s hood might calm any jitters. This is a fitter, less-extended index than the one that collapsed last February.

Back then, euphoria dominated after tax cuts looked set to juice profits and buybacks. When the S&P 500 hit a record Jan. 26, a quarter of its members stood at 52-week highs and nearly 40 percent were overbought. Today, just one in 10 stocks is at a yearly high, and a measly 10 percent have relative strength measures that top 70, underscoring a lack of exuberance for U.S. stocks. It’s a continuation of a year of subdued investor reaction to stocks, with the index rarely in overbought territory since the so-called volmageddon.

-CHART OF THE WEEK: Apocalypse Postponed in S&P 500 as Profit Outlook Looks Better. For anyone worried an earnings recession is about to torpedo the rally in stocks, some contrary signals have emerged. One is a lessening in the earnings downgrades by analysts that have clouded sentiment toward reporting season, which begins this month. Another is the sudden bounce in estimates for sales growth over the next 12 months, which are up 0.7 percent from their February low. It won’t be enough to keep first-quarter results from being rough, but it could suggest some of the earnings paranoia that has run rampant since last year was overblown.

While profit estimates are still falling, drilling down into measures of sales and pricing power reveals a more nuanced picture. “Revenue, which is one layer below profits, and then margins which are a layer below that, do get neglected from the market view, just because we scream about earnings and everything wrapped around short-termism is linked to earnings,” said Samantha Azzarello, global market strategist for JPMorgan ETFs. “Revenues that we’re getting from abroad are up dramatically. That’s speaking to the fact that the global economy isn’t tanking, it’s just chilling.” Bloomberg

-CHART OF THE WEEK: This Time Is Different for the Yield Curve? They Said That Last Time. “This time is different.” That famous line, which mutual-fund legend Sir John Templeton once called “among the four most costly words in the annals of investing,” is back in fashion these days when it comes to the Treasury yield curve. Skeptics from Goldman Sachs Group Inc. to Morgan Stanley Investment Management say the curve’s recessionary signals may be distorted now as a result of central-bank policy that’s kept interest rates exceptionally low since the financial crisis.

Is it deja vu all over again? More than a decade ago, then-Federal Reserve Chairman Ben S. Bernanke dismissed the curve’s predictive powers after two of the most widely watched yield spreads inverted and then went flat. In Bernanke’s camp were then-Treasury Secretary John W. Snow and bond king Bill Gross. And we all now what happened next. That time was famously NOT different. “People may say ‘this time is different’ due to quantitative easing, but this is a signal that’s been extremely strong,” said Charles Luke, whose team manages almost $21 billion in fixed-income assets for City National Rochdale in New York.

“People who are not giving as much weight to it are missing the boat.” The fact that yields on 10-year Treasuries are now back above those on three-month bills, after spending much of last week below, should not be mistaken as an all-clear signal. That type of “mini-inversion,” lasting one to eight days, can be a precursor to a longer-term episode, according to Luke, who has analyzed the history of inversions. Bloomberg

-CHART OF THE WEEK: The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed. It was a state secret and the source of a kingdom’s riches. It was so important that U.S. military planners once debated how to seize it by force. For oil traders, it was a source of endless speculation. Now the market finally knows: Ghawar in Saudi Arabia, the world’s largest conventional oil field, can produce a lot less than almost anyone believed. When Saudi Aramco on Monday published its first ever profit figures since its nationalization nearly 40 years ago, it also lifted the veil of secrecy around its mega oil fields. The company’s bond prospectus revealed that Ghawar is able to pump a maximum of 3.8 million barrels a day well below the more than 5 million that had become conventional wisdom in the market. “As Saudi’s largest field, a surprisingly low production capacity figure from Ghawar is the stand-out of the report,” said Virendra Chauhan, head of upstream at consultant Energy Aspects Ltd. in Singapore. Bloomberg

-CHART OF THE WEEK: America’s Wealthiest Households Have Record Cash on Hand.America’s wealthiest households are stashing their cash at record levels. The top one percent have three times more in readily available cash than the bottom half, with holdings jumping from less than $15 billion shortly before the last recession to a record $303.9 billion at the end of 2018, according to Federal Reserve data released last week. By contrast, while holdings for the bottom 50 percent of households surged almost ten-fold since the pre-recession low, they’ve increased at a much slower pace than the wealthiest cohort. Bloomberg

-CHART OF THE WEEK: Bitcoin Surges as Cryptocurrency Market Suddenly Springs to Life. An abrupt surge in Bitcoin sent the world’s most popular cryptocurrency to the highest level since November, jolting the $160 billion market for digital assets after three months of calm. Traders struggled to pinpoint reasons for the rally, though some noted a flood fresh interest after Bitcoin breached the $4,200 level. The cryptocurrency briefly topped $5,000 and the value of digital assets tracked by CoinMarketCap.com jumped by about $17 billion in less than an hour. “The Bitcoin market and crypto market in general continues to be small relative to the rest of the markets and emotional,” said Jehan Chu, managing partner at blockchain investment and advisory firm Kenetic Capital. “It’s still very much subject to waves of enthusiasm. I don’t think today is anything special.” Bloomberg

-CHART OF THE WEEK: Mexico Hass Avocado Prices Jump 34%, Most in a Decade. President Donald Trump’s threats to close the southern border are proving to be a windfall for Mexican avocado producers. The price of Hass avocados from Michoacan, the heartland of Mexican production, jumped 34 percent on Tuesday, the biggest one-day gain in a decade. Prices, which probably spiked as importers boosted purchases ahead of any potential border issues, could double or triple if Trump makes good on his threat, said Roland Fumasi, senior analyst at Rabobank. Mexico is the biggest supplier of the fruit, accounting for 75 percent to 80 percent of U.S. consumption, according to data from the Haas Avocado Board. Bloomberg

-The United States is on a path to financial ruin, and everyone can see what is happening, but nobody can seem to come up with a way to stop it. According to the U.S. Treasury, the federal government is currently 22 trillion dollars in debt, and that represents the single largest debt in the history of the planet. Over the past decade, we have been adding to that debt at a rate of about 1.1 trillion dollars a year, and we will add more than a trillion dollars to that total once again this year.

But when you add in our unfunded liabilities, our long-term financial outlook as a nation looks downright apocalyptic. According to Boston University economics professor Laurence Kotlikoff, the U.S. is currently facing 200 trillion dollars in unfunded liabilities, and when you add that number to our 22 trillion-dollar debt, you get a grand total of 222 trillion dollars. Michael Snyder via The End of The American Dream blog

-The Dow is up more than 11% this year while the S&P 500 and Nasdaq have surged 13% and 16.5% respectively. TSX is up 12%. It’s a stunning reversal from the doom and gloom fears that were pervasive in the fourth quarter of last year. CNN

-There’s a retirement crisis in America where most will be unable to afford a ‘solid life.’ The three “legs” of the retirement “stool” (private savings, pensions, and Social Security) are all in dire shape. At Vanguard, the median 401(k) account value for an investor age 65 and older is a measly $58,035. After looking at the data, the Saint Louis Fed concluded: “It could be worrisome that, for many American households, the total balances of their retirement accounts may not be sufficient to ensure a solid life in retirement.” CNBC

-Sam Dogen spent 13 years working in finance on Wall Street before negotiating his layoff (and a severance package) in 2012 at age 34. He lives in San Francisco with his wife and baby and runs the blog Financial Samurai. He says that in order to comfortably raise a family in an expensive coastal city like San Francisco or New York, a household has got to earn at least $300,000 a year. Real estate, childcare expenses, food, entertainment, car payments, and student loans can add up quickly. Read more here-http://bit.ly/2Vjb0dt

-Bank of Canada Governor Stephen Poloz said policy makers will need to keep interest rates stimulative for now to help the economy adjust to lower oil prices and trade uncertainty. In a speech in Iqaluit, the capital of the northern territory of Nunavut, Poloz said the global slowdown, coupled with a housing sector that is taking longer to adjust to tighter mortgage rules and higher rates, means the economy still needs the help of low borrowing costs. The governor expressed confidence the country will emerge from its current soft patch, though he was noncommittal on whether that would prompt him to return to a hiking cycle.

“That is why we said at our last interest rate announcement in March that the economic outlook continues to warrant a policy interest rate that is below the neutral range to help the economy work through this downshift in growth and keep inflation close to target,” Poloz said in the speech. Poloz may be seeking to settle policy into an indefinite holding pattern, dismissive of the idea the economy is weakening but equally reluctant to suggest the future will be rosy enough to warrant higher borrowing costs. It’s an attempt to tone down some of the central bank’s own narrative on future hikes, while addressing recent market bets for cuts. Bloomberg

-A fuel tax is now being charged in four Canadian provinces, as Prime Minister Justin Trudeau advances a carbon levy over the objections of conservative premiers. The federal “backstop” program applies to Ontario, Manitoba, New Brunswick and Saskatchewan, which make up nearly half of Canada’s population. It will add 4.4 Canadian cents per liter of gas, or 12 U.S. cents per gallon, effective Monday, an amount that will rise in coming years. The government is pairing the new tax with “Climate Action Incentive” payments sent overwhelmingly to households, meaning the burden will fall disproportionately on small businesses.

For Trudeau, it’s a key way to help reduce greenhouse gas pollution and lower Canadian emissions by in his words putting a price on pollution. However, the measure has been a rallying cry for conservatives who govern each of those four provinces and who dismiss the move as a tax grab, warn it could spur a recession and are challenging it in court. The fuel levy that kicks in April 1 comes on the heels of a tax on industrial emitters that began in January, though its details are still being finalized. The new tax is the equivalent of a C$20 ($15) per tonne carbon price. That will rise by C$10 each year, to C$50 by 2022. However, Trudeau faces re-election this fall and his top rival has pledged to scrap the tax. Bloomberg

-Home sales are dropping in Vancouver as listings rise, with the local real estate board blaming policy changes for restricting potential buyers. A total of 1,727 homes were sold in the Vancouver region in March, down 31 percent from a year earlier, though up 16 percent from February, the Real Estate Board of Greater Vancouver reported on Tuesday. The sales total was the lowest for the month since 1986. The benchmark composite index price for a Vancouver home is C$1.01 million ($760,000), down 7.7 percent from a year earlier and 0.5 percent from the previous month.

The real estate board blamed policy changes for restricting purchases, saying they “sideline potential home buyers in the short term.” New rules from the federal banking regulator, which took effect last year, tighten access to mortgage financing by imposing stress tests on borrowers to ensure they can make monthly payments at higher interest rates. The region has now seen an increase in listings — there are 12,774 homes on the market now, 52.4 percent higher than a year ago and 10.2 percent higher than a month earlier. Bloomberg

-Toronto’s housing market was little changed in March as sellers stayed on the sidelines. Home sales in Canada’s biggest city totaled 7,187 in the month, one sale shy of the same month a year ago, the Toronto Real Estate Board reported Wednesday. Benchmark prices, which adjust for the type of home sold, rose 2.6 percent to C$779,100 ($584,164) from the same period last year. New listings declined 5.1 percent to 13,996 over the year. The average price was C$788,335 in March, up from C$781,192 in February. “Market conditions have remained tight enough to support a moderate pace of price growth,” Jason Mercer, TREB’s chief market analyst, said in the report. “Despite sales being markedly lower than the record levels of 2016 and early 2017, the supply of listings has also receded,” which is providing support for prices, he said. Bloomberg

-Manhattan real estate sales fall for sixth straight quarter longest losing streak in 30 years. Manhattan real estate had its worst first quarter since the financial crisis, according to a report from Douglas Elliman and Miller Samuel. Total sales fell 3 percent in the first quarter, and marked the sixth straight quarter of declines. That is the longest downturn in the 30 years that the real estate appraisal firm has been keeping data. CNBC

-Private payrolls add 129K in March vs. 173K est.: ADP/Moody’s Analytics. Private payrolls rose 129,000 in March vs. economist expectations of 173,000, according to ADP and Moody’s Analytics. The weak report comes a month after nonfarm payrolls increased by just 20,000. “The job market is weakening, with employment gains slowing significantly across most industries and company sizes,” says Moody’s Mark Zandi. CNBC

-For the First Time in Eight Years, Small Businesses Cut Jobs Two Months in a Row. Here’s another sign the U.S. economy is in the late stages of its expansion: Businesses with fewer than 20 employees cut jobs for the second month in a row, the first time that’s happened in eight years, according to private data provider ADP Research Institute. Smaller firms tend to have more trouble luring workers in a tight labor market than their larger peers, as they have fewer resources and perks to offer: a slowdown in their hiring indicates less slack as the labor market nears full employment. Medium-sized firms aren’t immune either, as they added the fewest workers since October 2017. Bloomberg

-13% of the world’s companies are ‘zombies.’ That’s not healthy. The past decade of ultra-low interest rates has spawned the rise of “zombie” companies. These debt-laden firms don’t make enough to even cover their interest payments. That’s never a good sign. The number of zombie companies in advanced economies last year stood at 536, or 13% of the total, according to Bank of America Merrill Lynch. That’s a surprising figure given that the global economy was strong in 2018.

In fact, the number of zombie companies isn’t far from the peak of 626 seen during the depths of the Great Recession, BofA said. “Last time it was easy to be a zombie because everyone’s profits were collapsing,” Michael Hartnett, BofA’s chief investment strategist, said in an interview. So what’s the excuse this time? Economists blame the era of extremely low interest rates. Easy money allows companies to borrow cheaply. And low rates encourage investors to gamble on riskier companies. The Federal Reserve held interest rates near-zero for almost a decade and pumped its balance sheet up to $4.5 trillion. “Central banks have pushed interest rates to zero. Therefore, nobody can go bankrupt,” Harnett said. Read more here-https://cnn.it/2Vmcjs8

-Retail apocalypse? JCPenney, Payless, LifeWay announce 3,000+ combined store closures. “In the post-digital era, only the strong will survive. Darwin would love this,” said one retail analyst. More than 41,000 people have lost their jobs in the retail industry so far this year a 92 percent spike in layoffs since the same time last year, according to a new report. And the layoffs continue to mount, with JCPenney announcing this week it would be closing 18 stores in addition to three previously announced closures, as part of a “standard annual review.” Retail job cuts for January and February total 41,201, said research firm Challenger, Gray & Christmas in a new survey, including nationwide retailers such as Payless and Charlotte Russe. “This is significant, and marks an acceleration of store closures and job cuts in the near term,” said Mark Hamrick, a senior economic analyst at Bankrate. “Retail is ground zero for seeing the shifts of change in our lives.” Read more here-https://nbcnews.to/2OGXLAw

-Weak February US retail sales underscore slowing economy. The weak report from the Commerce Department on Monday joined a raft of other soft data, including housing starts and manufacturing production that have left economists anticipating a sharp slowdown in growth in the first quarter. Retail sales dropped 0.2 percent as households cut back on purchases of furniture, clothing, food and electronics and appliances, as well as building materials and gardening equipment. Data for January was revised higher to show retail sales increasing 0.7 percent instead of gaining 0.2 percent as previously reported. CNBC

-Why Corporate America’s profits are set to drop. Surging labor costs and slower revenue growth likely will lead to a drop this year in corporate profits in the U.S. and other developed economies, according to a report out Monday from The Conference Board. Industries that could see their bottom line hurt the most are those that rely heavily on blue-collar workers, the non-partisan think tank said. Marketwatch

Warren Buffett says the country has to take care of poor people who have become ‘roadkill.’ “We are prosperity. We should take care of people who’ve become roadkill because of something beyond their control. I think that’s the obligation of a rich country,” Warren Buffett says. He says the benefit of free trade is rather “invisible,” and in fact the policy has done some damage to those dislocated workers. CNBC

-Lagarde: Global economy is in ‘a delicate moment’ and ‘losing momentum.’ “The growth is losing the momentum that we had hoped for pretty much across the globe,” said IMF’s managing director Christine Lagarde. Lagarde noted there are clear downside risks including Brexit and China trade tensions that have affected business confidence. If a 25 percent tariff increase was imposed, it would lead to 0.6 percent loss on U.S. economic growth, Lagarde said. CNBC

-Saudi Aramco made $111 billion in 2018, topping Apple as the world’s most profitable company by far. The company made a whopping $111 billion in 2018, the data show. By comparison, Apple made $59.53 billion in fiscal 2018. Saudi Aramco made its financial information available in a prospectus for a $10 billion bond sale, which the company plans to use to finance a nearly $70 billion stake in Saudi Arabia’s petrochemicals company. CNBC

-Saudis accessed Amazon CEO Jeff Bezos’ phone and gained private data, security chief says. Bezos had tasked his security chief Gavin de Becker with investigating how National Enquirer publisher AMI obtained intimate texts and photos that the Amazon CEO sent to his mistress, former TV anchor Lauren Sanchez. De Becker said his investigation had concluded “with high confidence that the Saudis had access to Bezos’ phone and gained private information.” De Becker said the results of his investigation have been turned over to federal officials. CNBC

-Online shopping officially overtakes brick-and-mortar retail for the first time ever. The report from the Commerce Department this week shows a new milestone for online shopping. The total market share of sales done with “non-store” retailers, or online, was higher than general brick-and-mortar sales in February. “The days of the internet and online shopping being “just a fad” have come a long way over the years,” says Bespoke’s Paul Hickey. CNBC

Bill Gates isn’t known to be a frivolous spender. He (along with Warren Buffett and a handful of other billionaires) has promised to give away most of his fortune to philanthropic causes, drives a Tesla (quite modest, considering how expensive cars can get), doesn’t like to buy pricey clothes and can be seen quietly waiting in line for a burger at the same Seattle drive-in he’s been going to for years. Not bad for a guy who’s worth almost $100 billion, according to Forbes. Despite all that, in 1994, right before he first became the richest person in the world, Gates couldn’t resist splurging on Leonardo da Vinci’s “Codex Leicester” for $30.8 million making it one of the most expensive books ever sold. The 72-page document, which contains Leonardo’s sketches and ideas about subjects like astronomy, mechanics, botany, mathematics and architecture, was written between 1506 and 1510. By understanding the reasons Gates bought the notebook, we can learn a lot about the importance of obsessing over the heroes that inspire us most. CNBC

-For Collectors, It Doesn’t Get Much Better Than This Vintage Watch. A genuine piece of watchmaking history this unique 1930s Vacheron Constantin Minute Repeater with Retrograde Calendar is slated to hit the block in May. Estimate $400,000 to 800,000. Watch collecting is a funny pursuit, in that enthusiasts are both always in search of that next great thing and healthily skeptical of anything that they haven’t seen before. When a watch is discovered that is unique, unusual, and properly documented, it’s a perfect storm, and that’s what we have here for you today. Phillips has announced that as part of its Geneva Watch Auction: Nine, taking place May 11, 2019, it will offer up a Vacheron Constantin minute repeater with retrograde calendar that, until recently, only existed in a single black-and-white photograph. Bloomberg

-A 17,000-bottle wine collection sold for nearly $30 million over the weekend at a Sotheby’s auction, Bloomberg reported. The collection exceeded its estimated sale price by almost $4 million. The sale crushed the previous record for a private wine collection a highly-anticipated 2016 sale totaling $22 million by a whopping $8 million. Businessinsider

-Apple slashes iPhone prices in China. Apple has cut prices on products in China by nearly 6 percent. The price cuts come as Apple has seen sales drop in China, leading to lower-than-expected revenue in the fourth quarter of 2018. The price cuts in China are for products including the iPhone, iPad and AirPods. CNBC

-Natalia Fileva, a co-owner of Russia’s largest private airline and one of the country’s richest women, died in a plane crash in Germany on Sunday. Fileva, 55, was chairman and a major shareholder in S7, which began its growth in the 1990s and is Russia’s second-biggest airline after Aeroflot. “The circumstances of the tragedy aren’t known yet,” the Russian carrier said in a statement. Fileva’s fortune is valued at least $670 million, according to the Bloomberg Billionaires Index. Bloomberg

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-88-Carat Flawless Diamond Fetches $13.7 Million At Sotheby’s Hong Kong. A flawless 88.22-carat diamond fetched more than $13.7 million at the Hong Kong Sale of Magnificent Jewels and Jadeite held Tuesday. The total, which includes commissions and fees, surpassed the high estimate of $12.7 million. The D color, type Ila, oval brilliant gem was the top lot in the sale of 2oo items, that featured a variety of diamonds, fancy colored diamonds, statement gems, and signed jewels.

A Japanese private collector purchased the stone and named it the “Manami Star,” after his eldest daughter. “We were thrilled to handle a diamond of such rarity, which now takes its place in the roster of top white diamonds to have come to the market here at Sotheby’s Asia,” said Patti Wong, Sotheby’s chairman in Asia. “Three clients from the region competed for the stone testament to the strong demand for diamonds of this quality in this part of the world. At 88.22 carats, this lucky stone now carries the name of the fortunate child whose father has chosen to give it her name.” Read more here-http://bit.ly/2OMXTie

-Sotheby’s Magnificent Jewels and Jadeite. April 2 2019 Hong Kong. Auction Results Here-http://bit.ly/2YVPEVI

-Lot 1780: Fancy Grey-Blue Diamond and Diamond Ring. Set with a emerald-cut fancy grey-blue diamond weighing 5.20 carats, embellished with brilliant-cut and baguette diamonds, mounted in platinum,size 5½. Estimate 229,608-357,168. Lot Sold 1,277,513. See more here-http://bit.ly/2YNh8g4

-Lot 1784: Fancy Intense Green Diamond and Diamond Ring. Set with a round-cornered square modified brilliant-cut fancy intense green diamond weighing 3.05 carats, between two shield-shaped diamonds, mounted in 18 karat white gold, size 6. Estimate 625,044-829,140. Lot Sold 757,069. See more here-http://bit.ly/2FRCRLd

-Lot 1613: Diamond Ring. Set with a cut-cornered rectangular modified brilliant-cut diamond weighing 11.10 carats, to the shank decorated with brilliant-cut diamonds, mounted in 18 karat white gold, size 6¼. Estimate 45,922-61,229. Lot Sold 223,230. See more here-http://bit.ly/2uG9uq2

-Lot 1703: Fancy Coloured Diamond and Diamond Ring. Centring upon an oval fancy greyish blue diamond weighing 0.41 carat, flanked by oval fancy intense yellow and fancy pink diamonds weighing 0.51 and 0.40 carat respectively, decorated with brilliant-cut diamonds, size 5¾. Estimate 33,166-43,370. Lot Sold 57,402. See more here-http://bit.ly/2uKLXnG

-Owner of Kay, Zales and Jared expects to close more than 150 jewelry stores. Signet Jewelers plans to close more than 150 stores, the retailer announced on Wednesday. The parent of jewelry brands including Kay, Zales and Jared is recovering from a weak holiday season that forced it to slash it profit outlook. For the fourth quarter of fiscal 2019, same-store sales fell by 2%. CNBC

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GOLD-SILVER-PALLADIUM

Gold to silver ratio at 80 to 1 with gold at $2,000 the silver price would be $25.00

Gold to silver ratio at 70 to 1 with gold at $2,000 the silver price would be $28.57

Gold to silver ratio at 60 to 1 with gold at $2,000 the silver price would be $33.33

Gold to silver ratio at 50 to 1 with gold at $2,000 the silver price would be $40.00

Gold to silver ratio at 40 to 1 with gold at $2,000 the silver price would be $50.00

Gold to silver ratio at 30 to 1 with gold at $2,000 the silver price would be $66.67

Gold to silver ratio at 20 to 1 with gold at $2,000 the silver price would be $100.00

Gold to silver ratio at 15 to 1 with gold at $2,000 the silver price would be $133.33

-Gold Is Heading Towards $1,400, Not $1,200. The gold market gauge is turning from bear to bull, with the metal most likely heading higher towards $1,400, according to Bloomberg Intelligence. Gold will not be stuck around the $1,300 level for much longer, with the market waiting on peak U.S. dollar and more volatility in the equity space to push prices higher, said BI senior commodity strategist Mike McGlone. “Stuck close to $1,300 an ounce in 1Q, gold is set to head for resistance at $1,400 instead of continuing to consolidate and revisit $1,200.

It’s been six years since gold traded above $1,400 vs. just a few months ago when it was below $1,200, yet headwinds are dropping fast, with a lofty dollar the primary remaining holdout,” BI’s April report stated. Gold’s set-up looks similar to that of 2002, when the U.S. dollar peaked and the gold market turned bullish, McGlone pointed out. “A peak in the trade-weighted broad dollar should seal a gold recovery, more so than in 2017. Then, stock-market volatility was still declining toward multi-decade lows while rates and yields were on the rise. The opposite conditions are in place now, with a strong dollar the final pillar for gold,” he wrote. A more dovish Federal Reserve is also helping gold breach its resistance levels, BI’s report added. Read more here-http://bit.ly/2uJUsQ4

-Clive Maund: Gold and Silver Updates. Read more here-http://bit.ly/2IbmNGO

-Russia Is Dumping U.S. Dollars to Hoard Gold. Vladimir Putin’s quest to break Russia’s reliance on the U.S. dollar has set off a literal gold rush. Within the span of a decade, the country quadrupled its bullion reserves, and 2018 marked the most ambitious year yet. And the pace is keeping up so far this year. Data from the central bank show that holdings rose by 1 million ounces in February, the most since November.

The data shows that Russia is making rapid progress in its effort to diversify away from American assets. Analysts, who have coined the term de-dollarization, speculate about the global economic impacts if more countries adopt a similar philosophy and what it could mean for the dollar’s desirability compared with other assets, such as gold or the Chinese yuan.

French President Emmanuel Macron said in an interview with CNN in November that European corporations and entities are too dependent on the U.S. currency, calling it “an issue of sovereignty.” Last year, Poland and Hungary surprised analysts by making the first substantial gold purchases by a European Union nation in more than a decade. For Russia, experts are starting to question whether it can afford to keep up its intense pace of buying.

Some say the country will import more gold to guard against geopolitical shocks and the threat of tougher U.S. sanctions as relations between the two powers continue to deteriorate. Gold buying last year exceeded mine supply for the first time. Still, others argue that Russia’s bullion demand is set to slow. “Should it reach the limit for domestic purchases, I think the central bank will start to import gold,” said Oleg Kouzmin, chief economist at Renaissance Capital in Moscow and former adviser in the central bank’s Monetary Policy Department. Given the geopolitical risks, it’s likely the central bank will keep increasing gold’s share of reserves, he said.

A representative for Russia’s central bank declined to comment on its gold purchases.

One thing that could keep Russia’s dollar reserves at high level is the country’s dependence on exporting commodities, like oil which are denominated in the greenback. Three-quarters of the nation’s annual $600 billion of trade is in dollars. Central bank buying has helped “strengthen gold from a weak hand to a strong hand” and supported gold prices in recent years, according to Ronald-Peter Stoeferle, managing partner at Liechtenstein-based asset manager Incrementum AG.

Bullion has risen more than 20 percent since the start of 2016. It traded up 0.5 percent at $1,297.15 per ounce at 12:40 p.m. in London. “If it wasn’t for Russia’s central bank, last year would have been the worst year for gold buying in a decade, so it helped put a floor on the price,” said Adrian Ash, head of research at gold brokerage BullionVault Ltd. “However, Russian buying is now well known so it would take a significant increase in their purchases to materially impact the gold price.” Bloomberg

-Saudi Arabia’s Gold Miner Plans to Be a Global Top-20 Supplier. Saudi Arabian Mining Co. wants to more than double gold output within five years. Maaden, as the state-backed company is known, plans to boost gold output from about 415,000 ounces this year to one million by 2025, Chief Executive Officer Darren Davis said in an interview. That would catapult the oil-rich kingdom from a marginal gold producer to one of the world’s top-20 suppliers. Gold demand is rising as U.S.-China trade tensions and fear of a recession persist.

With declining prices of some commodities including aluminum, which generated 40 percent of Maaden’s revenue last year, the company may be counting on the precious metal’s allure as a safe-haven investment to soften the hit. “Global tensions have an impact on gold in a positive way,” Davis said. Saudi Arabia plans to spend more than $7.4 billion exploring for metals and minerals by 2035, part of a $426 billion infrastructure spending plan that in part seeks to exploit what could be $1.3 trillion in resources. Maaden will boost its exploration budget to 250 million Saudi riyals ($66.7 million) this year, about triple its average annual spending over the past decade, Davis said. The company will focus on gold, copper and zinc. Bloomberg

-Gold Bugs With ‘FOMO’ Want to Get In on the Stock Rally. Investors are yanking money out of gold exchange-traded funds as hints of improving global growth and surging stocks lure them into riskier assets. The largest fund in the space, the $32 billion SPDR Gold Shares fund, or GLD, lost more than $671 million of assets this week. And around $153 million was pulled out of the $10 billion VanEck Vectors Gold Miners ETF, ticker GDX, over the last five trading days. GLD tracks the commodity while GDX tracks shares of gold mining companies. “The precious metal has been out of luck as investors are interested in buying riskier assets than parking their money in safe-haven assets,” Naeem Aslam, chief market analyst at ThinkMarkets, wrote in a note Wednesday. “The reality is that everyone is looking at the quarterly performance of equity markets and they are feeling FOMO.” Bloomberg

-The Palladium ‘Bubble Has Burst’ With Biggest Drop Since 2010. Palladium fell for a third day, heading for the biggest drop in almost nine years and fueling concern that the metal’s multi-month rally has run out of steam. The commodity used in pollution-reducing auto catalysts, which surged to a record last week on the outlook for tightening supplies, fell as signs of slowing economic growth sparked demand worries. The sell-off comes after hedge funds cut bullish bets and some analysts warned of a growing potential for a price correction. A strong dollar added to headwinds. While it’s difficult to speculate on what triggered the sharp drop, “I think that the bubble has burst,” said Georgette Boele, senior FX and precious metals analyst at ABN Amro Bank NV. “Palladium is finally feeling some gravity.” Bloomberg

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Investing In Fancy Colored Diamonds

Investing in rare colored diamonds is a long-term investment. The economic cycles of the past 15 years have seen colored diamonds reach new heights in value as price records were broken.

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1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1980
  • Total Price: $50,000
  • Price per Carat: $50,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 1990
  • Total Price: $150,000
  • Price per Carat: $150,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2000
  • Total Price: $500,000
  • Price per Carat: $500,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2008
  • Total Price: $1,000,000
  • Price per Carat: $1,000,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2009
  • Total Price: $1,090,500
  • Price per Carat: $1,090,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2020
  • Total Price: $2,828,187*
  • Price per Carat: $2,828,187*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Pink

  • Year: 2025
  • Total Price: $4,361,506*
  • Price per Carat: $4,361,506*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1980
  • Total Price: $1,000
  • Price per Carat: $1,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 1990
  • Total Price: $3,000
  • Price per Carat: $3,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2000
  • Total Price: $9,000
  • Price per Carat: $9,000
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2008
  • Total Price: $23,500
  • Price per Carat: $23,500
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2009
  • Total Price: $26,300
  • Price per Carat: $26,300
  • Source: Auction

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2012
  • Total Price: $32,000
  • Price per Carat: $32,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2020
  • Total Price: $53,993*
  • Price per Carat: $53,993*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Intense Yellow

  • Year: 2025
  • Total Price: $74,873*
  • Price per Carat: $74,873*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1980
  • Total Price: $60,000
  • Price per Carat: $60,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 1990
  • Total Price: $200,000
  • Price per Carat: $200,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2000
  • Total Price: $600,000
  • Price per Carat: $600,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2008
  • Total Price: $1,350,000
  • Price per Carat: $1,350,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2009
  • Total Price: $1,494,000
  • Price per Carat: $1,494,000
  • Source: Auction

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2020
  • Total Price: $4,555,497*
  • Price per Carat: $4,555,497*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Vivid Blue

  • Year: 2025
  • Total Price: $7,561,708*
  • Price per Carat: $7,561,708*

*Estimated value based on current market trend

1 Carat Radiant Cut Fancy Red

  • Year: 1950
  • Total Price: $13,800
  • Price per Carat: $13,800
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 1987
  • Total Price: $927,000
  • Price per Carat: $927,000
  • Source: Auction

1 Carat Radiant Cut Fancy Red

  • Year: 2008
  • Total Price: $2,000,000
  • Price per Carat: $2,000,000
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2009
  • Total Price: $2,074,600
  • Price per Carat: $2,074,600
  • Source: Private Sale

1 Carat Radiant Cut Fancy Red

  • Year: 2020
  • Total Price: $3,103,720*
  • Price per Carat: $3,103,720*

*Estimated value based on current market trend