Sound bites: Insiders run to resources as geo-tensions rise

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On Tuesday, the world will get the first serious insight into the Trump administration's priorities when the president addresses a joint session of congress. We got a hint of what may be in that speech when the New York Times wrote Sunday that the president will be asking for a major jump in defence spending. That news comes on the heels of further reports on the weekend from Reuters that China is investing heavily in naval capabilities to beef up its territorial claims in the South China and East China seas.

In advance of the speech, insiders are positioned for future gains in precious metals and other commodity stocks. For example, our Integrated Mining Indicator (a sub-indicator of Basic Materials) is at a bullish 142% as of Friday which means there are about 1.4 stocks with key insider buying for every one with selling. Insiders are also sticking with the oil patch, with our Oil and Gas Indicator (a sub-indicator of Energy) at a healthy 183% as of Friday.

Insiders are less upbeat about the broader market with our INK TSX Indicator at a less impressive 72% as insiders outside of the resource area take a wait and see attitude towards the market. One other notable exception is in the small Utilities sector where our indicator has shot up to 400%. Insiders are finding room for a bit of safety in the early weeks of the Trump years.

I discussed how commodities could do well during the Trump years in a weekend interview with Jim Goddard on This Week in Money. Listen to or download the full interview below. You can also catch it on Howestreet.com's Youtube channel. The interview starts at the 36:50 mark.

This is an excerpt from the February 27th Market INK report. To access the full report which includes the Canadian stocks with the most insider buying and selling, join the Canadian Insider Club. Membership includes the weekly Market INK and daily Morning INK reports, and comes with a 30-day money back guarantee.

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