Stocks Suffer 2 Week Fall, One Big Name is Betting on Gold

U.S. stocks have just finished a second week of significant drops. One big name has been counting on physical gold to help keep his US$100 million asset management company afloat. This week will be packed with announcements and economic data which has the potential to dramatically sway markets.

The U.S. stock market had another volatile, yet negative week. Sellers took control in the early trading hours of Thursday and continued the selloffs of the Nasdaq and S&P 500. The previous day had been the worst trading day since the end of 2022 and yesterday simply continued the bloodshed. The S&P dropped 36 points and the Nasdaq an astonishing 308 points. The Nasdaq has already suffered substantial punishment by falling 655 points the day before. This left the index with a roughly 1,000 point drop in just two days.

Later in the day, both indices saw significant bounces, but those were eventually erased. The S&P and Nasdaq moved back to negative before closing. The Dow Jones and the Russell 2000 indices managed to crawl higher as investors changed their focus from the tech sector, with astronomical P/E ratios, to the underperforming sectors.

Friday’s inflation data allowed the stock market to gasp for air, but the bounce was nothing outstanding. After a nearly 2 week fall of 4.62%, Friday’s 1% bounce did little to turn sentiment positive.

Burry Bets on Physical Gold as Markets Dive

Michael Burry, of The Big Short fame, has made physical gold his 5^th largest holding in 2024 so far. Burry's Scion Asset Management hedge fund has purchased 440,729 shares in Sprott Physical Gold Trust. This equates to US$7,624,612, and 7.37% of his portfolio.

Burry's investments are often pounced on by those calling for another drastic market crash like the one he famously predicted before. Stories about his investments are often sensationalised as if they are an omen of a similar crash. 

In this article, Burry is being referenced as a successful investor with over US$100 million under management. As someone who is competent in making money on both bull markets and surprise market crashes, it is interesting that even he chose gold as a safe haven investment. Even more interesting is his insistence that his investment is physically backed.

Data Incoming

This week will be packed with high-impact announcements. CPI data will be released for Australia on Wednesday at 11:30AM (Mel, Syd, Bris time), with Eurozone’s coming out 7:00PM the same night. The FOMC press conference will come Thursday at 4:30AM. And the week will finish with the Nonfarm Payrolls on Friday at 10:30PM. All of these announcements have the ability to aggressively swing markets, so keep your eyes peeled.