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Money Daily has been providing business and financial market news, views, and coverage on a nearly continuous basis since 2006. Complete archives are available at moneydaily.blogspot.com.

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Stocks Suffering Through Brutal Week of Selling; Transportation Average Down More than 5%; Gold Near $2000; Bitcoin Bid

Friday, October 27, 2023, 9:20 am ET

Investor's Business Daily (IBD) is one of few financial reporting sites correctly calling the recent downturn on the NASDAQ a correction.

They are correct in their assessment, as the NASDAQ is down 12.27% since its closing high at 14,358.02 on July 19, just prior to the Dow and S&P peaks on August 1 and July 31, respectively.

Since then, the Dow Jones Industrial Average has shed some 2,856 points, or 7.99%. The S&P has been knocked down by 452 points, or 9.84%.

The broadest measure of stocks, the NYSE Composite, peaked at 16,427.29 on - you guessed it - July 31. Since then, it's down 9.55%, 1,569 points.

Other media outlets, like the notoriously Biden-biased Yahoo! Finance (remember: never trust a financial site with an exclamation point in its title) which featured this morning a screed by Miles Udland about why a recession isn't something, not bad, not expected? As far as cogency is concerned, Mr. Udland gets an F, as in WTF. He's a poster boy for Woke.

As far as this week in perspective is concerned, it's been a disaster for equity holders but great for short-sellers. The Dow has been harmed the least, though it may receive due punishment on Friday after Chevron missed third quarter estimates, reported earlier this AM. The Dow is down 343 points, just over one percent. The NASDAQ is down 388 points, 2.99%, after dropping by more than three percent last week. Looks dire, for tech, despite early morning futures pointing to a positive open, just like Thursday. That didn't work out so well.

The S&P 500 has dropped just over two percent this week, 87 points, and the NYSE Composite is off 174 points, 1.16%. Not horrible.

Finally, the index nobody wants to mention, the Dow Jones Transportation Average, is down a whopping 796 points, or 5.51%. That's a whopper! It is the worst weekly decline for the trannys since at least March, its close Thursday at 13,654.46, sending the average down 1.70% on the day and 18.21% since its peak of 16,695.32, back on July 28. The Transportation average was already in a correction. It is close to an outright bear market. The few remaining Dow Theorists extant have their ears perked up over this development.

So, entering the last trading session of the week, futures are mixed, with the Dow down (thanks to Chevron) and the NASDAQ and S&P up, but less so than earlier in the morning. As far as futures are concerned as indicators, they're completely useless and should be regarded as irrelevant. They are only on display every morning because of the practice initiated by CNBC years ago and now followed by virtually every other media platform. The cash session - when the bell is rung - is completely detached from the futures, which, in turn, are often detached from reality.

Overnight, Asian markets were higher. Even India's Sensex posted a one percent gain. European stocks are well off earlier highs and stressed. They've had an up and down week, but are uniformly close to flat-lining.

By most indications - especially those provided by individual stocks and the indices themselves - the wholesale shedding of assets is nowhere near finished. Friday might bring some relief, or not. The S&P is showing severe stress signals. This was the first week in the last 16 that it didn't end on the upside on Monday and it has worsened since then.

Elsewhere, gold is holding above $1,990 per ounce, with silver lagging, just below $23. WTI crude is bid this morning, but well off recent highs, just under $85. Bitcoin is trending just below $35,000 for reasons as yet unknown.

At least the House of Representatives has gotten their act together and elected a speaker, Louisiana representative, Mike Johnson. He is more conservative than what most deep state loyalists would have preferred. With any luck, he may pave the way toward fiscal sanity in the bloated federal government.

On the breaking news front, word is out that the US has struck "Iran-linked" sites in Syria in retaliation for attacks on US bases. The Middle East situation is heating up. It's about Iran, not Israel, not Palestinians. That's just the cover story. Looks perilous. Direct confrontation with Iran would be about the worst foreign policy blunder anybody could make, so, it's probably in the cards.

Oh, well.

At the Close, Thursday, October 26, 2023:
Dow: 32,784.30, -251.63 (-0.76%)
NASDAQ: 12,595.61, -225.62 (-1.76%)
S&P 500: 4,137.23, -49.54 (-1.18%)
NYSE Composite: 14,858.70, -55.42 (-0.37%)


The Planned Collapse of the Tech Bubble is Well Underway; Everything is About to Be Sold Off

Thursday, October 26, 2023, 9:21 am ET

It's all becoming crystal clear now.

For the past few days, Money Daily has tried to stay on the positive side of the narrative, but that approach may have been a disservice to regular readers because what has been occurring in markets the past few months, weeks, and days is the culmination of trades that were initiated at or near the very bottom of the 2022 selloff.

On October 14, 2022, the NASDAQ closed at 10,321.39. That was the bottom, the very bottom. Being largely composed of speculative tech stocks and driven by what's become known as "The Magnificent Seven" - Apple, Amazon, Alphabet, Tesla, Microsoft, Meta Platforms, and Nvidia - which represent the seven largest stocks in the S&P 500, collectively making up more than 25% of the entire index. Those tech names and others had been shot down, then bought up at bargain prices.

They didn't all bottom out at once, but most of them hit their lows near the bottom of the NASDAQ's decline.

For instance, Facebook parent META Platforms (META) closed at a low point of 88.91 on November 4, 2022. The stock hit a high of 325.48 on July 28, 2023. The next trading session, on July 31, the date on which "distribution" for all stocks began, META closed at 318.60 and has wavered since. Today, in the aftermath of its latest earnings report, issued after the horrific close on Wednesday, it is slated for a decline of 12 to 15 points, which will likely leave it around 282-285, possibly lower.

Google parent, Alphabet (GOOG) hit a closing low of 83.49 on November 3rd, 2023 and peaked just a week ago, closing at 140.99 on October 17. Yesterday, it closed at 126.67, and is looking to open even lower today.

Amazon (AMZN), which reports third quarter results after the bell Thursday (today), hit the bottom of the well on December 28, 2022, at 81.82. On September 14, it closed at 144.85. After losing 5.5% on Wednesday, it is going to have an ugly open, down another 1.5-2.5%.

Similar patterns are in play for the rest of the tech titans. Others, like eBay, which was down four percent yesterday and has dropped from 48.80 on July 26 to 39.30 at the close Wednesday, are on similar paths lower.

The tech marvels of the past 12 months were nothing of the sort. They were bid up by insiders and heavier hands, only to be slaughtered near the one year anniversaries of their spectacular, Phoenix-like ascents. There are, for many of the players on these trades, capital gains considerations. Certainly, nobody bought everything at the bottoms. Trades in these behemoth companies were spread out over many months.

Now, they're making hay by selling calls or buying puts on the very names on which they profited.

Paraphrasing the late, great George Carlin, "It's a big club, and you aren't in it."

This is far from over. Despite Wednesday's deluge resulting in NASDAQ's biggest point loss of the year, it didn't even crack the top 25 all-time. Not even close. Bigger, more violent sessions lay ahead. Dow Industrials were almost untouched outside of Boeing (BA), so when it comes time to "shoot the generals" those 30 stocks will be under severe pressure. That's likely being saved for a few months hence, when interest rates cannot finally be contained and 10-year notes and 30-year bonds are sporting yields of six to seven percent, rivaling the laughable dividend yields on the industrials, mostly falling in a range of 2.50-4.50%.

For today, however, it appears that all systems are go for a continuation of the stock slide. Stock futures are rising after collapsing overnight to the point that a positive open may be just ahead. All bets are off at this point, however. Nothing concerning Wall Street trading can be trusted. Even if stocks open modestly lower or higher, there's almost certain to be a point at which the course heads lower.

Do not be fooled by short-term noise and one or two-day rallies. The bear market that began in January, 2022 never ended, and it's been catching a second wind.

At the Close, Wednesday, October 25, 2023:
Dow: 33,035.93, -105.45 (-0.32%)
NASDAQ: 12,821.22, -318.65 (-2.43%)
S&P 500: 4,186.77, -60.91 (-1.43%)
NYSE Composite: 14,914.12, -111.64 (-0.74%)


Fed Saves Stock Market; Investors Hopeful on Tech, Earnings Rebound; Oil Lower as WWIII Averted (for now)

Wednesday, October 25, 2023, 9:17 am ET

Looking ahead to Wednesday's stock session, interest rates are moving futures closer to unchanged. The 10-year note has been pushed down to 4.84%, roughly were it was a week ago, along with the 30-year treasury, at 4.96%.

As long as long-dated rates remain under control (below 5.00%), stocks should benefit, as they did on Tuesday when the thinly-disguised ploy of having billionaire Bill Ackman publicly announce that he closed his short position in bonds set off a firecracker of a rally in stocks and sent bond shorts running for the exits. How long the Fed and its allies can dance around the fixed-income campfire is now the question. It's obvious they cannot suppress rates forever, but, if their power is such that it rivals their policies concerning gold and silver, they might be able to keep interest rates in a state of suspended animation for a considerable period, beyond months, but also through multiple series of business cycles over years.

That kind of manipulative power is exactly what is wrong with the global economic system. It is not free, nor open, and hasn't been for quite some time. Central banks, with governments in cahoots, have far too much fiat currency to throw around, pitching it at every manifestation that doesn't agree with their narrative or the wholesale looting of capital from the marketplace.

Eventually, mistakes are made or the degree of distortions become so extreme that something breaks, as in 2000, 2008, 2020, and certainly at some date in the future. Conditions today are so fraught with uncertainty that the entire structure of the bond market remains inverted, and Tuesday's stealthy intervention only exacerbated an already stressed situation. Five percent is inevitable unless the economic narrative suddenly reverses and the reality of weakening domestic demand force a course correction, lower rates and a deep recession, which is likely what's in store for 2024, or maybe even later this year.

Make no doubt, the Fed continues to stick its prodigious nose where it shouldn't and the resulting cataclysm from out-of-control distortions in all markets will not end well for most people. By just about any measure, stocks remain overvalued. Distribution has been evident since the end of July though hardly enough to bring equities back down to realistic levels. The NASDAQ is still up 25% year-to-date. Those kinds of gains are unsustainable and everybody - except maybe the Fed - knows it. There may be more to this minuscule, one-day rally, especially with the deluge of earnings reports spewing from corporate America this and next week. Stocks may make further gains, but they're only designed to get the smart money out at higher prices.

After the close on Tuesday, Microsoft (MSFT) and Alphabet (GOOG) announced third quarter results. Both were impressive and above estimates, but while Microsoft was lauded for its AI efforts, Google will be punished for missing revenue estimates in its cloud division. It's a rather hair-splitting decision on Google as the magnitude of the miss was a stumble, not a fall.

Wednesday morning brought earnings from Visa (V), which beat the Street, but caused a pre-market slide of 1.50-2.00% in the stock. For what it's worth, Boeing (BA) might as well be a government agency. The company has posted just one profitable quarter in the past three years, yet after announcing a third quarter loss of $3.26 per share this morning, investors cannot get enough of the stock, sending shares soaring by more than three percent. This morning's rise is likely to inconsequential. The company long ago abandoned shareholders by going ex-dividend, so buying or selling shares of America's only large aircraft manufacturer is purely speculation, or faith, or a mirage. The company may become profitable some day, but not many are betting on it. Rather, it moves on the whims and instincts of insiders who regard it as a personal plaything.

So, with the equity market due to open in less than 30 minutes, futures are mixed with the Dow up, the S&P and NASDAQ lower. Asian markets were modestly higher, outside of India, and European stocks have exploded off of intra-day lows over the past three hours (and now seem to be heading down again) for reasons undisclosed. Perhaps in anticipation of the ECB pausing in their own rate-hiking cycle come Thursday is enough for investors to overlook the last reading of eurozone manufacturing PMI being 43, on a scale where readings below 50 indicate deteriorating conditions.

Europe, by and large is already in recession. If the US follows suit, market dynamics will change from hoping the Fed is also done to defending against recession and economic calamities. On its own, the Fed holding rates right where they are through the end of the year could be enough to send stocks higher for the remainder of 2023.

Don't fight the Fed and don't fight the tape. The trick is to know which way the Fed is leaning and how much effort they're willing to expend on keeping stocks elevated versus crashing the US dollar.

WTI crude is below $84/barrel as conditions in the Middle East remain muddied and not overtly barbaric. If a regional conflict is avoided, oil could stabilize at current levels or even move lower.

One real wild card on the global chessboard is the Republican leadership void in the House of Representatives. The current lineup doesn't have a single member over which the caucus can coalesce. As long as the House remains Speaker-less, nothing moves. They have a deadline of November 17 by which to pass another stop-gap spending bill or face the charade game of a government shutdown.

It's sad to see how entirely incompetent Washington has become.

At the Close, Tuesday, October 24, 2023:
Dow: 33,141.38, +204.97 (+0.62%)
NASDAQ: 13,139.88, +121.55 (+0.93%)
S&P 500: 4,247.68, +30.64 (+0.73%)
NYSE Composite: 15,025.76, +79.75 (+0.53%)


Stocks Set to Rebound After 10-Year Note Reverses Course; Gold, Silver Lower

Tuesday, October 24, 2023, 9:09 am ET

October 23rd was a Monday, so stocks should have closed to the upside.

According to Bespoke Investment Group, the S&P 500 had posted gains for 15 consecutive Mondays, until this Monday, when the record streak was broken.

The 15 straight Mondays of gains was easily the longest streak since at least 1952 when the five-day trading week began. The prior record of eleven up Mondays ended in June 2005.

Monday's trading went like this: Stocks started lower because the 10-year note almost closed above 5.00% on Friday and was threatening to do so again Monday morning. Around 9:45, billionaire (and well-connected) Bill Ackman announced on X that he had closed out his treasury short position. That sent yields screaming lower and stocks ripping higher, to the degree of a 290-point move on the NASDAQ through 1:00 pm ET.

Then came the rug-pull, with stocks selling off into the close. Final result was the NAZ up 34 points, S&P down seven and the Dow off 190. Nice going if you were on the inside of that particular play, and too bad for holders of Dow stocks, which have been in the loss column four straight sessions and finished at the lowest level since May 31.

On Tuesday, large cap earnings reports are grabbing attention ahead of the bell. General Motors (GM) withdrew its 2023 profit guidance as costs related to the UAW strikes dented its balance sheet. GM Chief Financial Officer Paul Jacobson said strike costs are now running at $200 million a week.

However, the company reported a solid third quarter, with earnings of $2.28, ahead of Wall Street expectations, and up slightly from $2.25 a year ago. The fourth quarter already looks troublesome, with costs from ongoing strikes already at $600 million.

Spotify (SPOT) turned a profit of $34.08 million, its first quarterly profit since 2021. Analysts were expecting a loss. The company raised prices and increased its subscriber base simultaneously.

Verizon's earnings for the third quarter fell 7% to $1.22 on an adjusted basis. Revenue for Verizon stock dipped 2.6% to $33.3 billion. A year earlier, Verizon made $1.32 a share on revenue of $34.2 billion. Analysts had projected Verizon earnings of $1.18 a share on revenue of $33.3 billion for the quarter. Shares were higher by one to two percent in the pre-market.

Coca-Cola (KO) beat street estimates with higher prices and strong demand, raising full-year guidance.

Even though EPS and gross revenue were down from a year ago, 3M (MMM) managed to beat estimates, returning $2.68 per share, citing continuing cost-cutting measures for surging profitability.

More big names, including Visa (V), Microsoft (MSFT), and Google parent, Alphabet (GOOG).

All of the stocks that reported prior to the opening bell were higher, signaling a strong open. Futures, a half hour prior to the open were up sharply (Dow: +150; NASDAQ: +89; S&P: +24).

Gold slipped to $1,976 per ounce, after Monday's trading left it largely unchanged. Silver was also lower, at $23.05. WTI crude oil was also trending lower after slipping from above $88 to below $86 on Monday.

Yield on the 10-year note slumped to 4.85%. The 30-year bond was yielding 4.99%.

From all appearances, investors are embracing stocks this morning, as bond yields have temporarily been shuffled lower. How long the Fed and its allies can keep a lid on interest rates remains a matter of considerable speculation, though deep analysis suggests it won't be long before the 5.00% level on the 10-year is breached.

At the Close, Monday, October 23, 2023:
Dow: 32,936.41, -190.87 (-0.58%)
NASDAQ: 13,018.33, +34.52 (+0.27%)
S&P 500: 4,217.04, -7.12 (-0.17%)
NYSE Composite: 14,946.01, -87.30 (-0.58%)


WEEKEND WRAP: Stocks Rocked (again), Yields Sky-High; Gold, Silver, Oil Remain on the Move; Gas Prices Tame

Sunday, October 22, 2023, 2:27 pm ET

Despite the seemingly orderly retreat in stocks, this past week was one of the most significant of recent years, with long-dated bond yields spiking to 2007 levels and home mortgage rates touching eight percent, their highest since 2000.

Stocks continued their downward flight since the end of July and war in the Middle East is spreading well beyond Israel and Gaza, into Lebanon, along with Syria and Iraq, where US bases have been assaulted. Israel bombed Syria's main airports in Damascus and Aleppo, knocking both out of service, and also bombed central Damascus, killing at least five civilians.

Joe Biden delivered a brief televised message on Thursday night, calling on an impotent congress to approve $100 billion in military and "humanitarian" aid to Ukraine and Israel. The House of Representatives continues without a Speaker, barring passage of Biden's spending plan or any other legislation (probably a good thing).

Days earlier, Biden had visited Israel, claiming to have calmed president Netanyahu (Bibi) down from a ground assault on the Gaza Strip. During the Middle East visit, Biden was rebuffed by the leaders of Iran, Saudi Arabia, and Egypt, none of whom would meet with him after scolding Secretary of State Antony Blinken in very public manners.


Stocks

Bank of America's Michael Hartnett, who was bearish when stocks were rallying earlier this year, now thinks it's time to buy stocks according to BofA's proprietary "Bull & Bear Indicator" dropping below 2.0, indicating extreme bearishness. (BTW: this is the very same information atop the ZeroHedge stack this morning, "for subscribers only" of course. What a joke. The information is widely disseminated across the internet.)

Geez, Mike, no foolin'. Stocks got stacked, packed, smacked, and racked this week, led by the NASDAQ's 3.16% decline.

Further, "investors are sufficiently bearish" for the S&P 500 to hold above 4,200 points and the yield on the 10-year Treasury to find a ceiling at 5% for the next three-to-four weeks, Hartnett said. "Put another way, if the index can't hold at 4,200 with this level of bearishness, then there may be imminent risks of a credit event or hard landing," he added.

Please, Mike, that's a nice CYA statement, but, maybe there already exists imminent risk of a credit event. Investors this week turned their focus away from Wall Street's favorite tease, the Fed's insistence on raising interest rates, and turned their attentions to a crashing economy built on tapped out consumer spending and government borrowing at record levels.

Since the end of July, the Dow is down 7.1%, and 9.98% since the all-time closing high of 36,799.65 on January 4, 2022. That's about as close to correction diving one can get without getting wet.

The S&P is down 7.95% since July 31, and 11.93% since its record close of 4,796.56 on January 3rd, 2022. The SPX backed into correction levels two weeks ago.

The bubbly NASDAQ, suffering its fifth weekly loss in the last seven, has slipped 9.53% since topping out at 14,358.02 on July 19, and is down 19.14% since its record close of 16,057.44 on November 19, 2021.

It hasn't escaped notice that stocks have been in what's loosely known as a consolidation phase since the end of July, in which investors gradually begin taking profits on stocks they've owned for considerable periods. In growing economies, after these consolidations, buying resumes, with fresh investors looking to capitalize on good stocks that have pulled back incrementally. In times of chaos, confusion, or outright economic decline, consolidations precede further pullbacks, making fools of these late stage investors.

Advice for Mike and his acolytes is to wear gloves, because catching a falling knife may cause bleeding hands and portfolios.

Earnings season is in full swing, though reports have varied from ebullient (JPM, NFLX) to dismayed (TSLA, DFS). The coming week is chock-full of big movers, especially high-flying tech names.

Tuesday: Alphabet (GOOG), Microsoft (MSFT), Archer Daniels Midland (ADM), Spotify (SPOT), Verizon (VZ), 3M (MMM), Visa (V), Texas Instruments (TXN), Coca-Cola (KO), General Electric (GE).

Wednesday: Meta Platforms (META), Boeing (BA), Hilton (HLT), ADP (ADP), IBM (IBM), T-Mobile (TMUS) General Dynamics (GD).

Thursday: Amazon.com (AMZN), Royal Caribbean (RCL), Ford (F), US Steel (X), Mastercard (MA), Merck (MRK), Intel (INTC), Southwest Airlines (LUV), Altria (MO), Chipotle Mexican Grill (CMG), Valero (VLD), Northrop Grumman (NOC), United Parcel Service (UPS), CapitalOne (COF), Newmont Mining (NEM).

Friday: Exxon Mobil (XOM), Chevron (CVX), Colgate Palmolive (CL), AutoNation (AN), AbbVie (ABBV), T Rowe Price (TROW), Charter Communications (CHTR).


Treasury Yield Curve Rates

Date 1 Mo 2 Mo 3 Mo 4 Mo 6 Mo 1 Yr
09/15/2023 5.51 5.56 5.56 5.60 5.49 5.43
09/22/2023 5.52 5.58 5.56 5.61 5.52 5.46
09/29/2023 5.55 5.60 5.55 5.61 5.53 5.46
10/06/2023 5.59 5.60 5.63 5.64 5.59 5.43
10/13/2023 5.60 5.58 5.62 5.62 5.57 5.41
10/20/2023 5.56 5.56 5.58 5.61 5.54 5.41

Date 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
09/15/2023 5.02 4.72 4.45 4.41 4.33 4.59 4.42
09/22/2023 5.10 4.80 4.57 4.53 4.44 4.70 4.53
09/29/2023 5.03 4.80 4.60 4.61 4.59 4.92 4.73
10/06/2023 5.08 4.87 4.75 4.79 4.78 5.13 4.95
10/13/2023 5.04 4.80 4.65 4.66 4.63 4.97 4.78
10/20/2023 5.07 4.93 4.86 4.93 4.93 5.27 5.09

Spreads:
2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47

The market's most popular bond vehicle, iShares 20 Plus Year Treasury Bond ETF (TLT) closed out the week at 83.24, down from its July 31, 2020 peak of 171.00. For those of the percentage persuasion, that's a 52.32% loser.

Figuring out bond yields versus price is confounding for most people but it comes down to risk assessment and trust. As bond yields rise, prices move in the opposite direction because people won't pay a premium for an asset that's falling in value.

For instance, a 10-year note, purchased at three percent a year ago isn't worth much in the secondary market when the same note is yielding close to five percent.

The simple reason yields on long-dated notes (5-10 years) and bonds (20-30 years) are rising so rapidly is because of two things: 1) the US Treasury is issuing lots of paper; 2) there isn't much demand, especially from foreign sources. A third reason involves the Fed's dumping (QT) on to the market.

Basically, people, businesses, and sovereign nations aren't buying 10s, 20s, and 30s especially because they don't trust the issuer to pay back the principal, or continue making interest payments (coupon) for the full term. The 30-year bond should be yielding much more than it is presently, maybe as much as seven or eight percent. After all, the US government, the primary issuer of such, is $33 trillion in the hole, starting wars all over the world, and facing more domestic unrest, crime, and distrust of government than at any time in recent memory. Put flatly, there are people who believe the United States might default on its obligations within 10, 20, or 30 years, so they want to be rewarded with a premium (yield) on their investment.

Thus, these long-dated securities are being shunned at the same time the government is desperate for funds (tax revenues are declining). Meanwhile, the market for bills (3 months - 6 months) is overheating, with rates in excess of 5.5% across the board. As long as the Fed keeps the federal funds target rate at 5.25-5.50% or even higher, these short-dated bills will offer high yields, ideal for CDs, savings accounts, and other short term investments.

As far as normalizing the yield curve is concerned, refer to the charts above. Notably, the five-year dis-inverted (is lower now) from the 10-year note, and threes and sevens offer the same yield as the 10s (4.93%).

Spreads on 2s-10s dropped to -14 this week, closing in on dis-inversion, aka, normal. Full spectrum moved closer to normalizing, rising to -47, a huge move from -82 just last week.

Should the Fed decide to pause on rates at their next FOMC meeting (October 31 - November 1) and maybe even do the same in December, look for the curve to steepen as the short end stays around 5.60% and long rates rise to six, seven percent or higher. It's a safe bet that when the curve dis-inverts, a recession will follow in four to six months, so, at the current breakneck pace, figure on second quarter of 2024 for people to be losing jobs and the economy "officially" going into a tailspin.

For those of us who can still recall the 1970s and 80s, and those who have the misfortune of being born post-1980, here's a review of what a double-dip recession looks like, courtesy of investopedia:

The last double-dip recession in the United States happened in the early 1980s, when the economy experienced back-to-back episodes of recession. From January to July 1980, the economy shrank at an 8 percent annual rate. A quick period of growth followed, and in the first three months of 1981, the economy grew at an annual rate of a little over 8 percent. The economy fell back into recession from July 1981 to November 1982.

We are right on track after the not-a-recession recession of January to June 2022, for a longer, deeper recession by June of next year, possibly sooner. History is a guide. Follow it and be rewarded.

Oil/Gas

WTI crude oil closed out the week at $88.30, down from $90.77 the week prior.

The instability in the Middle East and elsewhere is causing ripple effects across the spectrum of pricing. Biden lifted some of the sanctions on Venezuela this week in hopes of getting some of their oil back in US hands. Speculation is for higher oil prices, which is actually the normal case in that particularly rigged market.

The US national average for a gallon of unleaded regular gasoline dropped again over the course of the week, from $3.57 to $3.51. Inventories of gas and other distillates have built up recently on slack demand and oil price swings have only been effective to the downside. There haven't been disruptions in US refineries and there's still plenty of crude supply.

According to gasbuddy.com, Georgia breached the $3.00 mark to the downside, checking in at a welcome $2.98/gallon. Mississippi continued to trend lower, to $3.00, and Texas prices continue to drop, to $3.01. Next are Louisiana ($3.05), South Carolina and Alabama ($3.07), and Tennessee ($3.09). Florida fell to $3.18 from $3.30, a full 12 cents lower than last week.

In California, the average fell another 18 cents to $5.45, down from a high of $6.07 three weeks ago. Prices also eased elsewhere in the West, with Washington ($4.79) down another 12 cents. Nevada fell to $4.66, down 12 cents. Oregon ($4.43) and Arizona ($4.20) were also lower over the week, along with Utah ($3.80) and Idaho ($3.92). Prices remain higher than usual in Montana, but remain below $4.00, at $3.89 this week. There are now only five states in the $4.00+ club.

In the Northeast, the highest gas prices remain in Pennsylvania ($3.72) and New York ($3.73). The lowest prices in the region are to be found in Ohio and Indiana ($3.25) and Kentucky ($3.14). Illinois ($3.61) regained the top spot in the Midwest, with North Dakota nearby ($3.60). The remainder of midwest state range from $3.25 to $3.49, most states lower over the past three weeks.


Bitcoin

This week: $29,955.20
Last week: $26,888.30
2 weeks ago: $27,856.60
6 months ago: $27,519.80
One year ago: $19,330.40

Back on August 29, the US Court of Appeals for the D.C. Circuit ruled that the SEC had no legitimate grounds to deny Grayscale's request to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.

Following Grayscale's court victory and the SEC's failure to appeal the ruling, speculation on the future of bitcoin and the potential for a bitcoin sport ETF has gone parabolic. Anthony Scaramucci (the "Mooch"), the diminutive investment scalper, believes bitcoin could eventually be valued as high as $330,000, 11 times its current price.

The Mooch may be on to something. If the inflation continues to rise and the value of the US dollar collapses, sure, one bitcoin could be worth $330,000, maybe even $1 million. Of course, a loaf of bread would be $200 and a new car $400,000, but, hey, if you like your hyper-inflated vapor currency, you can keep your hyper-inflated vapor currency.

Bear in mind, the Mooch supported everybody - from Barack Obama to Hillary Clinton, Mitt Romney, Donald Trump, and eventually Joe Biden - for president, tied the record for the shortest stint as White House Director of Communications - 11 days - as President Trump told him on July 31, 2017, "you're fired." In 2022 alone, his investment firm, SkyBridge Capital, lost 39% of client money on bad crypto bets, including involvement in the notorious, bankrupt FTX scam.

With this kind of people involved with bitcoin, the decision to run, not walk, away from what is likely the biggest monetary scheme ever foisted on unsuspecting people (well, outside of the Federal Reserve, that is) should be an easy one.

Now that bitcoin has been completely embraced by Wall Street con artists like the Mooch, BlackRock, JP Morgan, Fidelity, and a host of sketchy hedge funds, employed as a black hole slush fund for all manner of nefarious activity, SEC approval of a bitcoin spot ETF - a derivative of a fiary tale currency priced in fiat $US terms - would be the perfect vehicle to drive sales to snake oil extremes.

SEC Chairman, Gary Gensler, is said to be considering proposals from BlackRock, Grayscale, and others. There are strong indications that a bitcoin spot ETF could be launched on the NYSE as early as December.


Precious Metals

Gold:Silver Ratio: 84.70; last week: 84.97

Per COMEX continuous contracts:

Gold price 09/22: $1,944.90
Gold price 09/29: $1,864.60
Gold price 10/06: $1,847.00
Gold price 10/13: $1,945.90
Gold price 10/20: $1,993.10

Silver price 09/22: $23.82
Silver price 09/29: $22.39
Silver price 10/06: $21.76
Silver price 10/13: $22.90
Silver price 10/20: $23.53

Gold and silver continued their recent rally, with gold briefly surpassing $2,000 on Friday, posting as high as $2,008. Mideast tensions seemed the perfect tonic to spark renewed interest in real money, though we all wish it were otherwise. There's no need for people to die to appreciate what's been money for thousands of years. China, Russia, India and other various countries around the world (the Global South) already know the value of gold and silver. Only the Western nations are slow on this understanding. They're beginning to catch on, albeit too late.

It's not yet time to get excited over future prospects for the metals, especially in fiat currency terms. Gold and silver are like dual puts against the US dollar, Japan's yen, the pound, the euro, yuan, et. al. As such, transitioning to gold and silver based economy will take some time. A new record for gold is not far off, but silver still lags considerably. Silver stackers can begin shouting when the price exceeds $26 and heads to $30. It's in that range that supply is likely to dry up completely and prices begin to catch up to those for gold.

Year to date, gold is up about eight percent while silver is down about three percent. $24.25 puts silver in the plus column for the year. That could happen this coming week. If not, it appears certain to exceed that level by December.

In what was one of the more memorable past two weeks for precious metals, they advanced as stocks declined. Maybe there is hope for the world.

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping included):

Item/Price Low High Average Median
1 oz silver coin: 27.50 42.95 35.36 34.84
1 oz silver bar: 29.28 40.63 34.86 34.50
1 oz gold coin: 2,038.48 2,163.48 2,103.25 2,106.76
1 oz gold bar: 2,063.47 2,097.18 2,073.82 2,071.54

The Single Ounce Silver Market Price Benchmark (SOSMPB) rebounded strongly this week, up $1.51, to $34.89, from the October 15 price of $33.38 per troy ounce.

WEEKEND WRAP

Well, that was a busy week, but, with earnings galore the next two weeks and everything else in the world - including college football and the baseball playoffs - unresolved, volatility has returned to markets, with the VIX topping out over 21 last week. While there's been impressive selling pressure in both stocks and bonds the past few months, a relief rally wouldn't be a surprise, though if one does develop, it's likely to be short in duration and long bull-speak.

Stocks look to be headed back towards late-summer 2022 lows and interest rates stable to higher. Inflation is far from being conquered. As long as there's a Federal Reserve and a computer keyboard (replacing the worn out printing press) there will always be inflation.

It's almost a religion.

At the Close, Friday, October 20, 2023:
Dow: 33,127.28, -286.89 (-0.86%)
NASDAQ: 12,983.81, -202.37 (-1.53%)
S&P 500: 4,224.16, -53.84 (-1.26%)
NYSE Composite: 15,033.31, -163.07 (-1.07%)

For the Week:
Dow: -543.01 (-1.61%)
NASDAQ: -423.43 (-3.16%)
S&P 500: -103.62 (-2.39%)
NYSE Composite: -290.39 (-1.90%)
Dow Transports: -249.02 (-1.69%)


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idleguy.com July 2024
IdleGuy.com July 2024, Vol. 1 #6