Name: Will The Fed Crash Markets? Warning Signs 'Flashing Red' | Adrian Day
Uploaded: 2025-09-16T17:22:01+00:00
Duration: 2322 s

Speakers

Adrian Day — President, Adrian Day Asset Management

Summary

Adrian Day argues the Fed is boxed in by a weakening labor market and sticky inflation, likely forcing rate cuts and continued dollar weakness. He remains bullish on gold and especially gold mining stocks, expecting miners to outperform bullion despite new highs. He also warns US equity leadership is overvalued and sees a likely S&P correction with rotation into laggards and commodities.

Fed is boxed in; Adrian expects quarter-point cuts, possibly more, but not necessarily 75 basis points.
Labor market is weaker than headline data; interest expense and deficit pressure are tied to rates.
Dollar likely remains weak due to loss of foreign appetite and slow erosion of reserve status.
Gold is supported by central-bank buying, de-dollarization, and a macro mix of lower rates, higher inflation, and weak dollar.
Gold miners should outperform bullion due to under-leverage, margin expansion, and new investor flows.
US stocks show warning signs: high valuations, poor breadth, and insider selling; S&P correction and rotation risk.
Rotation candidates include small caps, value, income, commodities, and commodity stocks at 100-year relative lows.
Silver is riskier and more volatile; bond market depends on Fed choices; Tether/EMX may bring crypto attention to gold.

Ideas

Adrian Day President, Adrian Day Asset Management 0:07

Gold miners outperform bullion from under-leverage.

Gold mining stocks should significantly outperform bullion because the sector has only delivered about 2:1 leverage to gold recently versus the historical 3.5:1, since central banks and Chinese nonofficial buyers bought bullion, not North American miners. US retail advisors and family offices are only starting to allocate, potentially buying large-cap miners such as Barrick, Newmont, or GDX; margins have expanded sharply while cash-flow and NAV valuations remain undemanding.

Adrian Day President, Adrian Day Asset Management 0:18

Gold biased higher over 12 months.

Gold is supported by central-bank buying and diversification away from the dollar, a long-term de-dollarization trend not dependent on Trump, and an expected macro mix of weaker US growth, lower rates, higher inflation, and a weaker dollar. Adrian says he cannot easily envision gold meaningfully lower over the next 12 months, though a pullback or correction is possible.

Adrian Day President, Adrian Day Asset Management 15:41

Dollar weakness likely continues.

The dollar is likely to continue weakening because the Fed is boxed into cutting rates, foreign appetite for US assets and dollars has weakened sharply, and there was no meaningful bounce after the largest first-half dollar decline since 1973. White House-Fed conflict and long-term de-dollarization/weaponization trends further reduce confidence in the dollar.

Adrian Day President, Adrian Day Asset Management 25:49

S&P risk/reward poor; correction likely.

The US stock market is at a tipping point where leadership may roll over and the S&P 500 could see a correction, though not a crash. Valuations, worsening market breadth, and extreme insider selling make the risk/reward unattractive and imply lower future long-term returns from this starting valuation.

Adrian Day President, Adrian Day Asset Management 27:30

Rotate into small-cap value income laggards.

Because US large-cap leaders are overvalued, market breadth is worsening, and insider selling is extreme, investors may rotate out of leaders and into lagging or undervalued areas such as smaller-cap stocks, value stocks, and income stocks.

Adrian Day President, Adrian Day Asset Management 27:40

Commodities at 100-year relative lows.

Commodities and commodity stocks are at 100-year lows relative to financial stocks and global equities, so they remain a major laggard and a logical rotation destination. Even with the recent gold and silver run, the long-term relative value gap is still extreme.

Adrian Day President, Adrian Day Asset Management 31:52

Agnico cheap on cash flow, safe jurisdiction.

Agnico Eagle is Adrian's favorite example of an undervalued large gold miner because it lacks the jurisdiction problems that make names like Barrick cheap, such as Pakistan or Mali, and its price-to-cash-flow is near its lowest level in 10 years aside from last year, showing miners are not expensive on historical cash-flow metrics.

Adrian Day President, Adrian Day Asset Management 33:39

Silver more volatile; be more nervous.

Silver can be much more volatile than gold due to its holder base, so after the run-up investors should be even more nervous about silver than about gold.

Will The Fed Crash Markets? Warning Signs 'Flashing Red' | Adrian Day

Summary

Ideas

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