(Beijing)

For the average investor the biggest risk exposure is how…see the full story on our partner Magnifi’s site

(New York)

Everyone jumped off the three-month gold rally last week after regional Fed President Jim Bullard spoke of tightening in response to the recent CPI releases. This erased over a month of gains in a week as the price sank from $1900 to nearly below $1780. However, the Hulbert Gold Newsletter Sentiment Index which tracks the average recommended gold exposure among a subset of short-term gold timers is at -9.7%. This contrarian take is that gold rallies when this index sinks. The typical threshold for this index is -14.8%, but the dramatic move could be enough to start to buy. This index is one of the key items to watch as the price of gold falls so that you don’t miss the rebound.

FINSUM: Additionally Powell made it very clear that inflation is transitory and Bullard is in the minority on the FOMC. The Fed won’t pull back the reins until inflation is above its long-term goal and persistent.

(Las Vegas)

ESG may have started as a play from the conscience but as of late it has turned out to be just as potent of play for the wallet. Since the start of the pandemic green power exposed stocks in the S&P 500 such as First Solar, NextEra, Albemarle, LG Chem, and Samsung SDI have averaged 140% return compared to the S&P’s 41%. But the real hidden gem has been at home solar company Sunrun which posted a 212% return over the same time frame. The CEO says its wide base of customers draws in democrats and republicans and boosts demand. It also has dealt with Ford Motor Co. to cooperate on in-home charging for the new F-150 Lightning. It has risks as Tesla and Home Depot are trying to take up market share but Sunrun is the leading market contender.

FINSUM: At-home solar is one of the top plays right now, but wider ETFs could provide the exposure with less risk.

(New York)

Another jobs report hit the tape today, and another good reading, with job growth outpacing expectations. Crucially, there were also no signs of heavy wage growth that could stoke the market’s inflation fears. According, Treasury yields fell across the board, with the short end of the curve falling the most. Analysts feel that the report did not bring the dreaded Fed Taper any closer, which led to the fall in yields. Fed minutes will be released next week and that is the next time the market will get a peek into what the central bank may do next.

FINSUM: Two divergent paths here—either the market is falling into complacency, or the Fed’s view that inflation is “transitory” is starting to come true. It might only take an errant sentence form the Fed to spark a big correction.

(New York)

Any advisor likely already knows it, but it is worth repeating: ESG funds are troubling space. They are significantly more costly than traditional funds, have middling returns, and perhaps worst of all, these days they seem quite undifferentiated from conventional funds. One of the big problems in the space is that there is no universal definition of ESG or standard convention for defining ESG risks or parameters, so anyone can call anything “ESG”. For example, take a look at the top ten holdings of two funds, one a basic S&P 500 tracker, the other labeled “Large Cap ESG”, and you will see they have virtually no differences except that the ESG fund costs 40 bp at best and the conventional fund costs 9 bp.

FINSUM: Some people call ESG a pure marketing scam. To some extent that is true as it is pretty easy for fund providers to take advantage of ESG pricing without really doing anything under the hood. But at the same time, there is also genuine interest on the consumer and provider sides to expand opportunities in the space.