Dear Reader,
The Trump administration has been pumping massive cash into small resource companies lately…
Companies vital to national security.
As you can imagine, these “government targeted” stocks have soared in value.
Just look at the results:
Trilogy Metals – up 388% in 8 days.
MP Materials – up 216% in 4 months.
Lithium Americas – tripled in 3 weeks.
And America’s Economist, Dr. Mark Skousen, says it’s about to happen again.
Keep in mind… Skousen knows the President personally after Trump spoke at his FreedomFest conference.
And he’s also developed close relationships with Senators Rand Paul, Mike Lee, and others.
He’s learned what’s important to them.
And one thing they’ve made clear.
The current administration will take stakes in companies they deem important to national security.
Now, Dr. Skousen says he believes it will happen again.
This time with a much smaller company.
And in anticipation, he’s purchased 10,000 shares of his own.
Here’s why…
This company is the only domestic producer capable of delivering one strategic mineral America can’t do without.
That’s why Tesla just signed a binding agreement to purchase 75,000 metric tons from this company.
And it’s why the government has already handed the company grants totaling $130 million.
Dr. Skousen believes the U.S. government could take a stake at any moment in the days ahead..
He breaks down the full situation right here – read it before this stock makes headlines.
Good investing,
Rachel Gearhart
Publisher, The Oxford Club
P.S. The last time Mark felt this way about a resource stock, he turned $50,000 into a rare $1.3 million over just three years. Don’t sit on this one.
The Nikkei Hit 71,000. The BOJ Meets October 28. Here Is the Trade.
The Nikkei 225 touched 71,054 on Tuesday, October 6, up 48% over the past year. On Wednesday it pulled back 0.9% to close at 70,036 on profit-taking in financial stocks. That single-session reversal illustrates the core tension in every Japan position held by a U.S. investor right now: a spectacular equity rally sitting on top of a currency that continues to erode.
Where everything stands. USD/JPY settled at 158.18 on October 6, with the yen down 2.47% over the past month and 4.13% over the past year. The BOJ raised its policy rate to 1.25% on September 18 in a 7-2 vote, the second hike in three months. The Fed’s upper bound sits at 4.00%. That 2.75-percentage-point gap is what keeps the yen carry trade alive and the yen weak, and one 25-basis-point BOJ move at October’s meeting would barely touch it.
What the October 28 meeting is really pricing. TONA futures still lean toward no change at the October 28-29 meeting. BOJ Governor Kazuo Ueda addressed securities firms on October 6 and changed nothing: he reiterated the bank will keep raising rates in line with the economy and prices, but gave no signal of urgency. USD/JPY’s entire range on Tuesday stayed inside Monday’s trading band. Markets heard what they wanted to hear: a pause is coming.
That consensus, though, has a live tail risk. Former BOJ executive director Kazuo Momma put the odds of a back-to-back October hike at 20% to 30% in a late-September interview, higher than what futures price. The quarterly outlook report the BOJ releases after the meeting may matter more than the rate decision itself. If that report signals an accelerated pace toward neutral, yen positioning could shift fast regardless of what the rate line says.
The ETF decision. This is where the trade becomes concrete. Investors holding EWJ, the unhedged iShares MSCI Japan ETF, own the Nikkei rally and the yen together. Investors in DXJ, the WisdomTree Japan Hedged Equity Fund, own the same Japanese exporters with forward contracts stripping out monthly yen moves. DXJ closed at $183.88 on October 6 with roughly $7.1 billion in assets.
The historical case for DXJ has been strong during yen weakness cycles. DXJ’s carry cost for the hedge runs approximately 4% annually. That cost only earns its keep if yen depreciation exceeds the toll. At 158, the yen is already cheap on almost any multi-year measure. If the BOJ surprises on October 28, or if its post-meeting report signals faster normalization than markets expect, the hedge flips from asset to liability. Unhedged EWJ would then outperform as yen strength translates directly into dollar returns for U.S. holders.
The setup for the next three weeks. The AI-related names that drove Tuesday’s Nikkei rally, including Taiyo Yuden up 6.58% and TDK up 5.60%, reflect a real earnings catalyst. Weak U.S. September payrolls, which came in at just 29,000 against an 84,000 forecast, reduced bets on a Fed October hike, which lifted risk appetite across Asia. That backdrop supports the Nikkei’s near-term trend.
Governor Ueda also named weak yen explicitly as an upside inflation risk in Tuesday’s remarks. A currency that the central bank views as an inflationary input, sitting at 158 against the dollar, gives the October meeting at least a small but non-trivial probability of a surprise. A futures-implied hike probability that is low enough to be comfortable, but high enough to punish a leveraged unhedged position if realized.
Trader’s Action Plan
The Nikkei’s underlying momentum is real. The currency decision is the variable. Traders who want Japan exposure without betting on continued yen weakness should favor DXJ heading into October 28. Traders who believe the BOJ will hold and the yen softens further have an argument for EWJ. The key levels to watch are 158.50 resistance in USD/JPY and the 70,000 support level in the Nikkei that the index just reclaimed. A break below 70,000 on the index, or a yen move through 156 on a hawkish BOJ surprise, would each change the calculus materially.
