Relative to Gold
The S&P 500 dropped 0.2%, the Dow Jones lost 344 points, while the Nasdaq 100 edged higher by 0.2%.
Homebuilders and megacaps pulled back, though Nvidia gained 4.1%, reaching a record.
Builders FirstSource (-5.2%) and Lennar (-4.3%) saw significant declines. Meanwhile, Tesla (-0.8%) generated market anticipation ahead of its upcoming earnings report, despite disappointment from its recent robotaxi unveiling.
Treasury yields surged further, pushing consumer and homebuilder stocks down.
Boeing shares rose 3.1% following news of a tentative union deal.
With gold continuing to print new record highs, let's take a look at historical extremes in the ratio of gold prices to two key asset prices.Â
Here's a look at gold prices relative to crude oil (WTI) …
As you can see to the far right in the chart, we are at an historic extreme, where the price of gold is 39 times the price of a barrel of WTI crude oil. Â
If we look back over 75 years of data, these extremes in the ratio were resolved (i.e. turning point in the ratio) in each case by a sharp rise in the price of crude oil.Â
Next is the S&P 500 to gold …
The S&P is currently 2.2 times the price of gold. Notice that the extreme of the late 90s tech bubble, which was ultimately resolved with a crash in stock prices, began at a much higher multiple of gold prices.
