Metals stocks making the Magnificent 7 look like Treasuries – Goldman’s Pasquariello

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Metal and mining stocks (NYSEARCA:XME [https://seekingalpha.com/symbol/XME]) are making the mega-cap Magnificent Seven stocks (MAGS [https://seekingalpha.com/symbol/MAGS]) look like Treasuries, according to Tony Pasquariello, head of hedge fund coverage at Goldman Sachs.

Stocks that are levered to gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]), copper (HG1:COM [https://seekingalpha.com/symbol/HG1:COM]), and rare earths (REMX [https://seekingalpha.com/symbol/REMX]), among other metals have seen extreme volatility in returns vs. the more “stable” and historically high-performing “Mag 7” stocks: Alphabet (GOOGL [https://seekingalpha.com/symbol/GOOGL]), Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]), Apple (AAPL [https://seekingalpha.com/symbol/AAPL]), Meta Platforms (META [https://seekingalpha.com/symbol/META]), Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]), Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]), and Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]).

As U.S. treasuries are known for their low volatility, maybe these “Mag 7” stocks are better positioned as safe havens against the sharp swings and speculative nature of the metals and mining sector (NYSEARCA:XME [https://seekingalpha.com/symbol/XME]) in the past years, according to Pasquariello.

[Metals and mining stocks]
Metals and mining stocks (Tony Pasquariello, Goldman Sachs, Bloomberg )

Rare earths have been at the center of the U.S.-China trade war, as China's launch of export controls on the rare earth supply chain has seen global pushback [https://seekingalpha.com/news/4504833-chinas-rare-earth-export-controls-sparks-global-pushback-report].

Also, gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) has reached more than $4,200 per ounce for the first time this week, while silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) has also hit all-time highs, now trading at $54/oz.

The Roundhill Magnificent Seven ETF (MAGS [https://seekingalpha.com/symbol/MAGS]) has risen more than 35% in the past year, with Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) reaching a market cap of $4.3T, and the rest of the stocks rebounding after lagging earlier this year as AI enthusiasm reigns.

“This remains one of the most dynamic market environments that I’ve ever seen – with both right tails and left tails revealing themselves in recent weeks,” Pasquariello said.

MORE ON SPDR® S&P METALS AND MINING ETF:

* Consider The XME ETF For Rising Metals Prices [https://seekingalpha.com/article/4825196-consider-the-xme-etf-for-rising-metals-prices]
* XME: Materials Dashboard For September [https://seekingalpha.com/article/4823409-xme-materials-dashboard-for-september]
* Seeking Alpha’s Quant Rating on SPDR® S&P Metals and Mining ETF [https://seekingalpha.com/symbol/XME/ratings/quant-ratings]
* Dividend scorecard for SPDR® S&P Metals and Mining ETF [https://seekingalpha.com/symbol/XME/dividends/scorecard]