ASH BENNINGTON: Welcome to Real Vision Daily Briefing. It's Wednesday, March 9th, 2022. I'm Ash Bennington, joined today by Jared Dillian of The Daily Dirtnap. Here's what's happening. Stocks up, oil down. That's the summary. Let's take a look at these numbers here because we've seen some momentum here.

Dow Jones industrial average selling out on the day, 33,285, up exactly 2% on the session. S&P 500 up more than 2.5% on today's trading session, closing out the day 4,277. NASDAQ up nearly 3.6% on the day, 13,255. Russell 2000, a shade under 3% up on the day, closing out at 2,021. VIX down almost 8.5%, settling down here it looks like 32.16. Oil off 11% on the day, closing out right now looks like 109.70, call it about $110 a barrel.

Lots going on in the world. Jared Dillian, welcome back to the show. Always a pleasure to have you here, especially on a day with such an active trading.

JARED DILLIAN: Yeah, I'll try to help. I'm just another idiot here.

ASH BENNINGTON: Our longtime viewers know that is not true. You're a guy with decades of experience trading these markets. Headline numbers here, obviously a lot of momentum, some news stories coming out of Ukraine, how do you process it? How are you thinking about what happened today?

JARED DILLIAN: It's funny because I don't really consider myself a technical analyst. But over the last, I would say three weeks, I've been pretty heavily focused on the charts to look for a turning point in stocks and commodities and everything else. One thing I pointed out yesterday on Twitter is that I said that commodity markets typically make V tops. And stocks typically make V bottoms.

But when commodities bottom, they don't make a V bottom, it's usually a big, rounded bottom. And when stocks top, they make a big rounded top. Commodities in the last couple of days have been making V tops all over the place, whether it's oil, or nickel, or wheat or stuff like that, we're seeing these panic blowoff tops. And I've been looking for a spot to buy stocks. And today, I actually published in my newsletter, I said today's the day to buy.

And that was really informed by my take on commodities. Stocks in the S&P 500 as of yesterday was only down 12%. And a lot of people are saying that's not enough given what's going on in the world, given the war in Ukraine and everything else. And I said, look, the panic isn't in the stock market, the panic is in the commodities market. That's where you're seeing it. And that's where from a sentiment standpoint, I got the courage to say, okay, now it's time to go back into stocks.

ASH BENNINGTON: Yeah. Lots happening in the world. Just so that people can be informed of the things that are happening, a lot of news stories coming in from Ukraine, obviously, humanitarian crisis on the ground continuing, we see this continued siege of the city, Mariupol in the south of Ukraine. Today, an interesting story, Russia accused the United States of "economic warfare" for its sanctions regime.

However, tomorrow, we're going to see high level talks set to begin between the Russian Foreign Minister Sergey Lavrov and his Ukrainian counterpart Dmytro Kuleba. This is scheduled to begin in Turkey. Obviously, a lot of news flow coming out of Ukraine while a humanitarian crisis clearly still happening there. Jared, how do you process all of this news flow? How do you think about it in the context of what's happening in markets?

JARED DILLIAN: Well, I think we're all learning the names of cities in Ukraine, which we didn't know before, so we're all getting educated on this. The thing that stands out to me is what you said about the US sanctions against Russia. This has the potential to escalate. Russia has made comments like this in the past, that not necessarily that they view the sanctions as an act of war, but that it's an act of aggression.

And those types of things make me worried. And I just mentioned that we're buying stocks today and stuff like that, but if we're going to have round two of this, and things get worse, it's going to be because of those provocative statements. It's going to be because Russia views these sanctions as an act of war. And that's when you have the potential to get contagion. It's a little bit too early to make any predictions on that, but that's the type of thing that I'm looking out for.

ASH BENNINGTON: Jumping around here a little bit just because we've got so much news flow today, and I wanted to get you to weigh in in a couple of these points, the job openings and labor turnover summary. This the official report from the Bureau of Labor called the JOLTS report, 11.26 million in January, an actual beat on the 10.9 million consensus estimate. Here's the headline or the interesting component of this to just frame it and give some context.

That means those 11.6 million jobs, 4.7 million more vacancies than workers. A little bit of context, there are approximately 157 million employed persons in the United States, 4.7 5 million vacancies. For every 100 workers, there are three jobs for which there are no workers. That's the back of the envelope number. I know a macro economist would point out that that's not the scientific way to look at it. But it does give you an order of magnitude estimate on just how big this gap is in terms of vacancies versus workers.

JARED DILLIAN: Yeah. And it also tells you right now, I think the unemployment rate is 3.9, I think was the last print. But it tells you-- think about this, if workers came back into the labor force, and people took these available jobs, where would the unemployment rate be? It would be much, much lower. It would be 3%, 2.5%, 2%.

People make these generalizations about the economy. They say, well, it's hot, or it's cold or whatever. And at this particular moment in time, it's both hot and cold, because we do have this hot labor market and hot housing market, but we're dealing with this inflation. But yeah, I think absent any exogenous shock, I think you're going to see the unemployment rate continue to go down over time.

ASH BENNINGTON: Yeah, by the way, if I didn't say so at the top, that 11.2 6 million is the January number for the total number of job openings. Jared, for people who are just getting into thinking about markets through the framework of macro-economic data, you gave a little bit of color and some context on the JOLTS report, what are your thoughts of what it means more broadly for inflation and for markets?

JARED DILLIAN: Oh, it's hugely bullish for inflation. A couple of months ago, if you go back to where we were in December and January, the Fed was very, very hawkish. We were pricing in like seven or eight rate hikes. And at the time, I was saying I think inflation is going to moderate because I think this jawboning is having an effect on the yield curve, and it's financial tightening, and I do think inflation is going to moderate. That's what I thought two or three months ago.

I don't think so anymore. Gundlach today says that he thinks that inflation is going to be 10% this year. And actually, I agree with that. I don't think-- and now we're in a position where we're stuck, where we don't have the ability to raise rates seven or eight times this year because of the war. And now we have the war, which is a big inflationary impulse, which means that it's going to get a lot worse.

I think 10% inflation this year is totally possible. And we're actually, I can't remember who it was, it was somebody in the Biden administration, maybe it was Psaki, and she said that she expects the CPI number, the headline number to be pretty hot.

ASH BENNINGTON: Yeah. By the way, for those who may not know, Jeff Gundlach, of course, from DoubleLine Capital, often called the bond king, a man who knows something about fixed income and about inflation and the relationship between those two points. With that said, Jared, I wanted to jump in and show this clip, because I think it's an excellent illustration of the point that you just made.

This is Maggie Lake hosting Anneka Treon, who is the managing director of the Competence Center at Van Lanschot Kempen. This is from today's Real Vision episode for Essential Plus and Pro tiers. Let's take a look at the clip.

ANNEKA TREON: If you're an equity investor, there are two words to go away with in the era that we're in. If you could just close your eyes, wake up in six months' time, a year time, and there's two words that you have to remember, those two words are pricing power. We've just discussed that the inflationary environment, it's complex, inflation has massive lags behind it, a broadening of inflation or an inflation discovery environment.

The only thing you can do as an investor is make sure that you are exposed to businesses that have a proven track record of pricing power. A, because it's the only way to keep up earnings. If multiples are going to continue to derail, if equity risk premia are continuing to inflate, which could be or could not be, because quite a lot has already happen there, at least you can feel comfortable about the E in your PE, at least you can feel more comfortable about the cash flow, because of the hedge in terms of its self-fix mechanism in terms of putting that opex cost through.

And the other thing is, again, with a long-term horizon, those businesses will ultimately benefit from their peer group getting crushed by their lack of ability to pass through higher opex, their lack of ability to be able to pass through this painful environment. And it will weed the weak out. And if you're in one of the stronger names with, as I said, a proven track record of being able to pass pricing through, that's probably the very best thing that you can take out from all of this.

ASH BENNINGTON: Following up, Jared, on some of the points that you made on the broadening and deepening of inflation, I think it's a great clip, because it's crystal clear. What she's saying is if you're investing in businesses in an inflationary environment, you better make damn well certain that those businesses have pricing power in markets.

JARED DILLIAN: Yeah. And the funny thing is, just for a little history, if you go back 15 years ago, in the mid-2000s, actually, we were having a bit of an inflationary impulse and commodities prices were going up. And a lot of people thought that we would get inflation, but firms did not have pricing power. Anneka said that you want to invest in firms that have pricing power, I would say everybody has pricing power nowadays. I don't know anybody that doesn't have pricing power, like everybody has the ability to raise prices indiscriminately.

ASH BENNINGTON: Yeah, and maybe she's talking about this on more of a comparative basis relative to other investments. Everyone does have pricing power, because obviously, these input costs are moving so rapidly.

JARED DILLIAN: Yeah, for sure. Yeah, I think this could be an environment which our estimates of inflation turn out to be woefully inadequate, where even Gundlach's estimate for inflation could be a little bit conservative. Just when we're talking about banning US oil exports, and we're talking about banning Russian oil imports and trade nis closing off around the world, this is hugely inflationary.

And this was happening before. We were under a period of deglobalization, where trade was drying up, and now it's being accelerated because of this war. This is going to feed directly into inflation.

ASH BENNINGTON: Yeah. By the way, let me just double click and zoom in on what you said, Gundlach at 10% could be conservative on inflation?

JARED DILLIAN: Yeah, I think so. Yeah. It's so early in the year. It's March. It's very possible by the end of the year.

ASH BENNINGTON: Yeah. Once again, a fast news day, I wanted to touch on something else, which is, I think, quite interesting, which is the President's executive order on digital assets and cryptocurrency. Let me just read you a little bit of a clip, the White House put out a press release on the website. Some of the things that they're talking about are "advances in digital and distributed ledger tech for financial services that have led to dramatic growth in markets for digital assets with profound implications for".

And here's just a list of some of the points they put forward. The need for the protection of consumers, for investors, businesses, including data privacy and security, financial stability, systemic risk, crime, national security, the ability to exercise human rights, financial inclusion, energy demand and climate change. It's everything but the kitchen sink is in there.

JARED DILLIAN: Yeah, I don't know. There's a lot going on right now in the crypto world talking about implementing US digital currency and stuff like that. This is not important right now, but it will be important at some point in the future, and it's good to keep an eye on this. Actually, it's funny, because for years, we talked about crypto, and nobody talked about gold.

And the news in the last three or four weeks has all been about gold. And Bitcoin is allegedly an inflation hedge, but it hasn't worked very well. And gold has suddenly exploded to the upside. It was down today.

ASH BENNINGTON: Yeah, let's take a look at some charts. First, let's hit Bitcoin and Ethereum. I think we have those charts ready. Bitcoin right now as we speak, trading at 41,785. That's up on a 24-hour basis, 8.5%, seven-day basis, down 4.5%. Obviously, a lot of volatility there. Ethereum, basically the same story, trading right now at 2688, up 5.25% on the last 24 hours, seven days, down. 8.75%, down nearly 9%.

But I wanted to click over to what you just said when you were talking about gold, because this is obviously something where we've seen a lot of activity, gold/US dollar spot right now, 1,992 on my screen. Boy, if you look at the six-month chart on gold, obviously, as you say, giving a little back today, but quite a chart. What's your interpretation on that? I know you've been thinking about this for a long time.

JARED DILLIAN: Yeah, this is my biggest position. And I significantly increased it after it broke out from the consolidation. This is a long-term trade for me and when commodities peaked yesterday, I knew I was going to take it in the shorts on gold. And that's what happened.

But I think what's going to happen going forward is that we're going to have a period of consolidation that's going to last a couple of weeks, maybe a couple of months. Gold is going to rattle around between 1,950 and 2,060. The technicals on this were perfect. It got exactly up to the previous highs, and stopped so, yeah, I think we're in for a period of consolidation. It's just going to take a while.

ASH BENNINGTON: Yeah. Jared, what are you going to be watching on gold to make those determinations? Obviously, a lot of macroeconomic factors that could, underlining could, influence the future price of gold. What are you looking at? And how are you thinking about some of those correlations?

JARED DILLIAN: Well, one thing that I've seen recently is that there's a handful of gold miner CEOs that have been buying their own stocks, which I thought was pretty interesting. And the other thing that I'm looking at is this whole idea that when people pointed this out a couple of days ago, we froze currency reserves at the Russian Central Bank.

And if you have currency reserves, whether it's in dollars, or Euros or anything else, and all of a sudden, you can't access it, really, the only alternative is to go into the spot gold market and buy reserves. I think there's going to be huge demand for gold from central banks. And trust me, anything I tell you is not my idea. I'm telling you stuff that I read from someplace else, I'm getting ideas from other people.

This is, when I saw that, I don't know if it was Luke Gromen or it might have been Luke Gromen, that he had said that this was going to happen. This makes a lot of sense to me. Like I said, I'm sticking with it.

ASH BENNINGTON: Jared, I would say you are doing what you do best. And you do it better than just about anyone, which is synthesizing all of the information that you see out there on these streams and trying to figure out a way to stitch it together into a coherent narrative.

JARED DILLIAN: Yeah, well, I think, look, the last time we talked, I believe we talked about gold. And I talked about the fact that there were all these people crapping on it. And I said, Jesus, just look at the chart, just zoom out, look at the chart, look at the consolidation that's been happening for the last two and a half years. And it is one of the most powerful chart formations that I've seen in my entire 20-year career of trading. You know what I mean? It's just an obvious setup.

ASH BENNINGTON: For people who don't have the background in this that you do, tell us why you see that setup as being so powerful.

JARED DILLIAN: Well, if you have a consolidation that lasts for a period of years, that means that the breakout is going to last for a period of years. This breakout that we've had, it's not just two weeks and we're done, and we're going to go back to where we started. This has unleashed a powerful, impulsive move that's going to last for a long time.

ASH BENNINGTON: Yeah. Very interesting. Any idea on the timing or what the horizons might look like?

JARED DILLIAN: Well initially, I said gold had to get to 2,500. I said that that would happen this year. I think I said that on the last Daily Briefing. I believe that, and I think that's actually a little bit conservative. I think it's a little bit conservative, so it could go higher than that.

ASH BENNINGTON: Yeah. Interesting. By the way, talking about original ideas, I'm going to give you a hot take on the President's executive order. And I want to get your opinion on it. Tell me what you're thinking about this. Actually, I when I read this story, and I've been looking into it and went onto the website and did some reading, I basically had two reactions to it.

And they're like divergent reactions. The first is the good, and the second is the cynical. I'm curious to hear your thoughts on this. In terms of the good, I thought they said a lot of good things in there. They talked about the future of money. That's a key phrase that people who are in the space have been thinking about and talking about for some time.

They talked about global leadership, which I think people who are really passionate about these digital assets care a great deal. Those of us here in the United States care a great