Boockvar on Midterms, Gold, Earnings
The following is from Peter Boockvar:
Midterms matter but…/They still love gold/RBA/Earnings
The elections are finally here and we’ll get a split government, with extent to be determined but we are not changing our portfolios, not one iota in response. There will be a lot of drama, a lot of noise, a lot of harsh rhetoric but in terms of actual legislation that would matter policy wise, we’re not going to get any over the next two years.
Most relevant for the economy and markets will be the AI buildout and stock trade, the direction of interest rates and the price of oil and direction of inflation.
With regards to the AI trade and its financing, this was a great chart from Bloomberg on how far and wide some of the hyperscalers have gone to raise money:
Gold has been under pressure over the past few weeks even though real interest rates have rolled over and the US dollar is off its highs. What I’ve been waiting for is the updated Q3 gold data from the World Gold Council to see the extent at which central banks continue to buy. Well, we got it today and they bought a lot.
After buying more than 200 tons per quarter in the 2nd half of 2025, that pace shrunk to just 58 tons in Q1, in part I believe to the onset of the Middle East conflict but central banks rebounded with 296 tons bought in Q2 and now out, 321 tons in Q3. The WGC said this eclipsed “recent typical quarterly buying levels and lifting y-t-d demand to 675 tons (+6% y/y).”
So, while bar/coin investors saw less demand, along with jewelry, central banks continue to be voracious buyers of the yellow metal as they continue to diversify their holdings away from the US dollar. For the price of gold, I don’t know how much longer the corrective phase will last but I’m still positive on the fundamentals and we remain long.
https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-q3-2026
The Reserve Bank of Australia raised rate by 25 bps as expected to 4.85%, a level last seen 18 years ago and that rate is now above where the RBA took it in 2023 but Governor Bullock hinted that they are going to take a pause from here. “I’d not be interpreting this as saying we’re not going up. I wouldn’t be interpreting it as saying we definitely are going up. We’re basically preserving our options.”
As for why they hiked again, “Given the revised inflation outlook and the continuing upside risks, the board judged that a further tightening in financial conditions is warranted to support the return of inflation to target.”
On the hint of a rate hike pause, the 2 yr Aussie yield fell 6.5 bps to 4.82% and the Aussie$ is down a touch. The ASX rallied by .3% in response.
RBA Cash Rate
I’ll finish up with a few notable comments from the earnings calls I went through from yesterday.
From Marriott, up 4.3% yesterday:
“Excluding the World Cup, third quarter RevPAR in the US and Canada rose 6.2%. Growth continued to be broad based across customer segments and chain scales. Luxury and resort hotels again led the region in the quarter, with luxury RevPAR increasing 12%, while select service RevPAR had its third quarter of solid y/o/y growth, rising over 6% compared to the prior year quarter.”
“Third quarter international RevPAR rose over 4%, led by the APEC region…RevPAR in Greater China was around flat in the quarter, reflecting an uneven consumer spending environment and the impact of major typhoons across the region. Continued strength in luxury and in Hong Kong, Taiwan, and Hainan markets was offset by slower domestic leisure demand across much of the rest of the Chinese mainland.”
RevPAR in the Caribbean and Latin America region rose over 3% in the 3rd quarter, driven by strong luxury and leisure demand across the Caribbean, which offset continued softness in Mexico.”
RevPAR in EMEA rose over 4%, with Europe and the Middle East both outperforming prior expectations. RevPAR in Europe rose over 6% in the 3rd quarter, with strength broad based across key markets, chain scales and customer segments. Middle East RevPAR declined 12% in the quarter, a meaningful improvement from the 2nd quarter when RevPAR declined over 40%, helped by healthy local and regional demand.”
Segment wise, “leisure RevPAR rose 7% globally and 9% in the US and Canada, as people around the world continue to prioritize in person experiences like travel. Group RevPAR rose 6% globally and 7% in the US and Canada. Third quarter business transient RevPAR rose 4% globally and 5% in the US and Canada.”
This was from Clorox on how they are managing the sharp rise in costs and whose stock was up 2% yesterday:
“In this challenging input cost environment, a strong holistic margin management program is more important than ever. We delivered near record-level cost savings and implemented targeted pricing actions across all four of our reportable segments. Overall, pricing implementation is progressing largely as expected. At the same time, we are continuing to make select price investments to improve the value equation where needed. With cost pressures of this scale, we will continue to lean into every tool we have in our holistic margin management toolbox, including pricing and revenue growth management actions in the back half of this fiscal year. We will take these actions while preserving the progress we have made in overall market share.”
On the consumer, “Category growth has been largely in line with our expectations, underscoring the resilience of our household essentials products even as consumers remain under pressure. Consumers are continuing to engage in value seeking behaviors such as opting for smaller sizes that offer a lower absolute price point or choosing larger packs that provide better value over time. We are also seeing consumers manage their budgets tightly by buying closer to need rather than stocking up. In some categories, particularly among lower-income households, they are also extending purchase cycles.”
From Estee Lauder, a stock we own that was down 4% yesterday even though numbers were better than expected, digesting the gains over the past month:
To a question on the consumer and their beauty spend, “I’m very confident that the Beauty category is remaining a very strong category in consumer goods in general. We’re seeing an acceleration. If you remember in the last fiscal year, we guided to 2% to 3%. Actually, the industry actually more or less delivered close to 3% growth in fiscal ‘26.”
“You’ve mentioned market like China, like the US is very strong, but the emerging market also continues to be very strong.”
From Apple, down premarket with a focus on less than expected gross margin guidance:
“In addition to September quarter and fiscal year records in total company revenue, iPhone set a September quarter revenue record, capping its best fiscal year ever. Services achieved an all time record during the quarter to close out our best year ever there too. We grew in the vast majority of markets we track, setting September quarter records in the Americas, Europe, Greater China, and the rest of Asia-Pacific. We also set September quarter revenue records in both developed and emerging markets, in addition to an all-time record in India.”
With expectations of 47% for their December quarter, “We expect growth margin to be between 45% and 46%. This includes primarily the impact of higher memory costs, as well as some costs related to the ramp of Siri AI.”
From ON Semiconductor, trading up premarket:
They had a good quarter “with growth above seasonal trends, continued acceleration in AI data center and improving demand in industrial.”
“AI data center continues to be our fastest growing market, scaling more rapidly than we anticipated entering the year…In automotive, we continue to gain content and secure new platform wins in every region, while industrial demand continues to improve, led by power infrastructure and energy applications.”
