- Science races to treat cancer with… electrical fields
- Gold rises, and not because the dollar falls: What’s going on?
- Uh-oh: Another “hard data” divergence in U.S. manufacturing
- Oil slammed 5% in a day: Why our income maven doesn’t care
- How Uncle Sam “lost track” of $1 billion in military hardware… Lights Out: The dialogue continues… the inflationary effects of corporate tax reform… and more!
We ease into the holiday weekend with a “feel good” story… and we apply a couple of different meanings to that expression.
Last February here in The 5, Ray Blanco clued us into a groundbreaking treatment for brain cancer — which is one of the most common cancers in children and also one of the deadliest.
“The most common form of brain cancer is glioblastoma,” Ray told us. “In children, the five-year survival rate is a depressing 20%.”
In his FDA Trader service, Ray had just recommended a company fighting the disease not with drugs — but with electricity. The patient wears a device on the head that bathes the brain in alternating low-intensity electrical fields.
“Brain cells tend to divide only rarely compared with other bodily tissues,” Ray explained. “Tumor cells, however, divide rapidly. The electrical field interferes with the alignment of cellular structures during cell division. This disruption kills the cell while it is trying to gestate its evil twin.”
Fast-forward less than four months, and Ray tells us progress has been coming at a breakneck pace.
As he predicted, the company is going to charge into pediatric brain cancers. The latest research with glioblastoma brain cancer patients is startling: The electricity treatment combined with existing therapies improves several quality-of-life measures relative to existing therapies alone.
And now the therapy has been approved for humanitarian use in pleural mesothelioma — a rare and vicious form of cancer caused by asbestos.
Readers who acted on Ray’s recommendation back in February are already up 110%. Two days ago, he urged them to sell half their position and let the rest of it ride.
Patients are feeling better… and investors in this treatment are “doing well by doing good,” as the expression goes.
And there’s another cancer play Ray thinks has even more potential. Learn all about it at this link. Please note this link will come offline next Tuesday, May 30.
Gold is pushing toward a one-month high as the long weekend approaches.
The buying started overnight during the trading session in Hong Kong. At last check, the bid is up nearly $11 at $1,266.
And you can’t chalk up the move to dollar weakness; in fact, the dollar index is up a quarter percent at 97.5.
There’s no obvious news driving the buying, which means bigger forces are at work.
“The contributors to gold’s strength are not hard to find,” says Jim Rickards. “The first reason is simple supply and demand. Russia and China continue to buy more than 100% of annual global output. Russia added another 7 tons of gold to its reserves in April alone. It has almost tripled its gold reserves in the past 10 years, from 600 tons to 1,650 tons.
“China is buying even more and has larger gold reserves, but it is much less transparent than Russia about its monthly additions. Western central banks and the IMF have almost completely stopped official sales, while Russia, China and other Asian central banks continue to buy.
“Another driver of gold’s price is geopolitical concern. These concerns are more intense at certain times than others, but developments in North Korea, Venezuela, Iran and Syria promise to get worse and to increase the demand for gold. Unrelenting attacks on the Trump administration from the media, Democrats, the ‘Resistance,’ the Deep State and many Republicans will create a climate of policy uncertainty that also favors gold.”
Meanwhile, the few stock traders who haven’t knocked off early for the long weekend are driving the major U.S. indexes slightly into the red.
At 2,414, the S&P 500 has shed a point from yesterday’s record close.
The government delivered two economic numbers of note today. The Commerce Department’s latest guess at first-quarter GDP rings in at an annualized 1.2% — weak, but not nearly as weak as the earlier guess of 0.7%.
But the big story in the numbers today is orders for durable goods — that is, anything designed to last longer than three years. It’s down 0.7% for April. And if you factor out the volatile transportation category (airplane orders are notoriously “lumpy”), the number is minus 0.4% — lower than the most pessimistic guess among dozens of economists polled by Bloomberg.
It’s yet another instance this year of dollars-and-cents “hard data” not supporting the survey-driven “soft data” showing optimism in the factory sector…
Crude is recovering from yesterday’s beat-down, but it’s still stuck below $50.
The sell-off yesterday was over 3% when we went to virtual press, and it ended up 5% by day’s end. Traders were hoping OPEC would extend its production cuts for another year, but in the end, the ministers opted for nine months.
The short-term action matters little to our income hound Zach Scheidt. Nine months or 12, what’s important is this: “The decision by OPEC allows U.S. oil producers to capture an even bigger portion of the global market share. As a result, I expect to see production continue to pick up in the U.S., and for U.S. energy companies to grow profits.”
And there’s another development in the energy patch this week that caught Zach’s eye. It’s buried deep within the budget proposal the White House issued this week.
It calls for selling off a portion of the government’s Strategic Petroleum Reserve (SPR) — the crude stockpile Uncle Sam stores in the salt caverns of Louisiana and Texas.
“This makes a lot of sense to me,” says Zach, “because the U.S. is producing more oil than ever before and has massive shale deposits that can now be efficiently drilled using fracking technology. Since the SPR isn’t necessary for our national security, selling some of this oil will help to ease short-term strains on the U.S. budget.”
Now here’s why these two developments matter to Zach — option prices.
“With OPEC extending their production cuts, the U.S. preparing to sell some of its strategic reserves and U.S. companies ramping up production, there’s a lot of uncertainty in the oil market,” Zach goes on.
Uncertainty leads to higher option prices for companies involved in drilling, producing, transporting and storing oil.
In Zach’s Income on Demand service, subscribers have the chance to generate income by selling put and call option contracts. Higher prices for options translate to more income.
Now, if you glaze over at the thought of selling options, we urge you to think twice. It can be much simpler than you think. Our publisher, Joe Schriefer, is so keen on the strategy he put it to the “kid test” — having an 8-year-old execute a trade in his own account.
Elapsed time: less than three minutes. Total income generated: $192.
It really is that simple. But don’t take our word for it. See the demonstration for yourself.
Your government in action: The U.S. Army has lost track of $1 billion in weapons and other military gear shipped to Iraq.
That’s according to a federal audit conducted last year and obtained recently by Amnesty International.
Under a $1.6 billion program called the “Iraq Train and Equip Fund,” the Pentagon shipped tens of thousands of military rifles, hundreds of Humvees and scads of other gear to Iraq starting in 2015.
It was supposed to go to the Iraqi army and its allied militias to fight ISIS. But with no effort to track what happened to it, there’s a high likelihood some of it has been looted and/or captured by ISIS.
For its part, the Pentagon says it has no responsibility to track what happens to the gear once it reaches Iraq because it’s no longer U.S. government property.
Besides, once it’s lost, that just means more has to be ordered from U.S. contractors, right?
“Government action relating to almost any serious problem almost always trails behind events and circumstances,” a reader writes as we continue to get feedback about a cyberattack on the power grid.
“The classic pattern is: A) A big problem is identified. B) The big problem is written about and discussed by experts. C) Politicians gradually become aware of but ignore the big problem. D) Sure enough, a predicted, catastrophically big problem event occurs. E) Politicians start a slow process to, at least partially, fix the big problem.
“Again and again, the above script plays out across the whole range of issues confronting America. Everything from air traffic control… to nuclear waste… to affordable health care is ‘handled’ this way.
“Therefore, sadly, it seems most likely that the clear message Ted Koppel presents in his totally informative book Lights Out will be largely ignored… until… some rather large number of lights really do go out… and then… stay out for a while… maybe a long while.
“At the end of the day, I guess my takeaway message is: Buying some solar panels, car batteries and flashlights now, when they are, in context, relatively cheap and available, is a really good idea.”
“You don’t need a cyberattack or a computer glitch to exploit vulnerability in the grid,” writes another.
“If we are not ready, a solar flare will eventually take out the grid in many populated places.”
The 5: Ah yes, a coronal mass ejection (CME) from the sun, also known as a Carrington event — so named for the astronomer who recorded the event in 1859. It knocked out large portions of the nascent telegraph network.
More recently, a similar incident in 1989 knocked out power to a large portion of Quebec. Fortunately, that outage lasted only nine hours or so.
And in July 2012, we had a near miss: The sun fired off a massive CME, but it didn’t make a direct hit on the Earth. Definitely cause for concern.
“I keep hearing how a drastic cut in the corporate tax rate will bring over $2 trillion in corporate cash being held overseas back into the U.S. economy,” writes our final correspondent.
“While I am a perennial fan of lower taxes, can anyone explain how this would be less inflationary than, say, printing another $2 trillion?
“And along those lines, the Fed is praying for a little inflation, while Congress wants revenue-neutral tax cuts to avoid inflationary pressures from bigger deficits. Seems like the inmates are firmly in charge of the asylum. Just sayin’…
“BTW, love The 5 but have learned not to click on any blue links.”
The 5: It’s hard to envision how Corporate America repatriating $2 billion or more will be inflationary — if you mean rising consumer prices.
Far more likely is a continued inflation of the stock market through dividends and share buybacks.
What else would they do with the cash? Invest it in new plant and equipment and hire more people? Why on earth would they do that when they have no idea what damn fool thing the government’s going to do next?
But at this point, it’s an academic discussion: The likelihood of any tax package passing this year is vanishing quickly. And there’s still a looming debt ceiling drama to get past. Good times!
Have a good weekend,
The 5 Min. Forecast
P.S. We’re back tomorrow with our weekly wrap-up/countdown edition, 5 Things You Need to Know. U.S. markets will be closed Monday for Memorial Day, so the weekday edition of The 5 returns on Tuesday.
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