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When lumber crashes, will stocks follow? ‘Few understand this’ says Michael Gayed

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When the lumber to gold ratio spikes, it's normally a signal that danger on view will remain strong, claimed Michael Gayed, profile supervisor at Toroso Investments.

Gayed has actually been tracking the lumber to gold proportion as part of his Lead-Lag record, and his studies have found that peaks as well as troughs usually lead equity rallies and also declines, respectively.

However, given the spike in lumber rates, it's only a matter of time before rates mean return downward, indicating a stock market correction can be coming up.

0:00 – Lumber/gold ratio as well as macro
17:29 – Cryptocurrencies
23:34 – Asset appropriation

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When lumber crashes, will stocks follow? ‘Few understand this’ says Michael Gayed

When the lumber to gold ratio spikes, it's usually a signal that risk on sentiment will remain strong, said Michael Gayed, portfolio manager at Toroso Investments.

Gayed has been tracking the lumber to gold ratio as part of his Lead-Lag report, and his studies have found that peaks and troughs usually lead equity rallies and declines, respectively.

However, given the spike in lumber prices, it's only a matter of time before prices mean revert downward, meaning a stock market correction could be on the horizon.

0:00 - Lumber/gold ratio and macro
17:29 - Cryptocurrencies
23:34 - Asset allocation

__________________________________________________________________
Kitco News is the world’s #1 source of metals market information. Our videos feature interviews with prominent industry figures to bring you market-affecting insights, with the goal of helping people make informed investment decisions.

Subscribe to our channel to stay up to date on the latest insights moving the metals markets.

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Disclaimer: Videos are not trading advice and the views expressed may not reflect those of Kitco Metals Inc.