‘Monetary policy lunacy’ means there has never been a better time for this asset, says hedge fund analyst

Another rough week has equity losses piling up for August, with the S&P 500 already down around 4.5% just two weeks into the month.

Some may not be ready to throw in the towel here. We’ve consistently heard throughout this lengthy bull market that bang for your buck can be tough to find outside of stocks. And despite some bumpy days, keep the tin hat close by as calls to buy equities trickle in.

The “Great Panic of 2019” is a big buying opportunity for stocks, Thomas Lee, head of Fundstrat Global Advisors, told clients in a recent note. And Mark Mobius, co-founder of Mobius Capital Partners, told MarketWatch that he’s got his eye on dividend-paying stocks, which he expects will benefit as central banks race to stave off a recession with interest rate cuts.

Some investors do seem to be playing it safer lately, which brings us to our call of the day from Otavio Costa, global macro analyst at hedge fund Crescat Capital, who is advising they buy gold. “We are entering a period of monetary policy lunacy, and in our view, there has never been a better time to own gold,” said Costa, in emailed comments.

Central bank easing and perception that interest rates will keep falling, along with jitters over the global economy and trade, have driven gold up nearly 20% this year. “Precious metals are “one of the few pockets of this market offering tremendous value to hedge against extreme monetary policies, bursting asset bubbles, and record global leverage,” says Costa.

He’s in good company. Euro Pacific Capital’s Peter Schiff has been telling clients the metal will “go ballistic” as the dollar tanks when markets realize the trade war is lost. The dollar tends to move inversely to gold. The metal closed at just over $1,531 an ounce on Thursday, the best settlement for an active contract since 2013, but some are saying $2,000 may not be far away.

The market

Dow












YMU19, +0.90%,










S&P












ESU19, +0.90%










 and Nasdaq












NQU19, +1.07%










  futures are in rally mode, following that bounce for stocks Thursday.

Oil












CLU19, +0.62%










 is higher, but the price of gold












GCQ19, -0.51%










 is retreating, while the dollar












DXY, +0.15%










is up.

A technical glitch delayed the start of trading in London in the worst outage for the exchange in eight years. Europe stocks












SXXP, +1.11%










are up, while Asia












ADOW, +0.33%










saw mixed session.

Read: Junk bonds are getting worse, and investors are starting to take notice

The chart

Bank of Merrill Lynch’s “Darlings Index”, which tracks the performance of some growth superstars that have helped lead the bull market, has seen better days. Our chart of the day from the bank shows how that group has dropped a collective 8% since July 26.



The group includes: Microsoft












MSFT, -0.22%










 , Japanese conglomerate SoftBank












9984, -1.11%










 , South African tech and internet group Naspers












NPN, -0.39%










 , American Express












AXP, -0.22%,










Visa












V, +1.74%










 , airline giant Airbus












AIR, +0.51%,










ASML












ASML, +0.55%










 ,












ASML, +1.55%










 , luxury goods group LVMH












MC, +0.56%










  and retailers Home Depot












HD, +0.10%










 and Walmart












WMT, +6.11%










 .

The buzz

Earnings from tractor-maker Deere












DE, +0.38%










 look to have disappointed with shares down. Shares of Nvidia












NVDA, -0.87%










 are climbing after the tech group’s results beat Wall Street forecasts, though some aren’t sure the hard times are over. Shares of Applied Materials












AMAT, +0.96%










 got a lift after beating earnings expectations, but also gave a downbeat outlook.

At a rally in New Hampshire, President Trump warned Americans should vote for him in 2020, or watch the market crash, and reiterated that China wants to make a trade deal.

Read: NASA scientists track Greenland’s melting ice, and the findings are not good

Data for the number of new homes on which construction has begun, along with building permits are coming early, followed by a consumer sentiment reading.

The tweet

Twitter is still having fun with a report that President Trump has expressed interest in buying Greenland, which has far less glacier to offer these days.

Random reads

Hong Kong protesters new nonviolent tactic: pull all their money from ATMs

Hundreds of Google workers demand company promise not to work with U.S. immigration officials

North Korea fired more missiles into the sea Friday, says its southern neighbor

Arkansas woman arrested after holding group of black teens at gunpoint

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