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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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The Beginning of the End of Wokeness as Elon Musk Acquires Twitter, Fires Execs; Dow Seeks 4th Straight Winning Week

Friday, October 28, 2022, 9:27 am ET

At last, some hope for sanity.

Elon Musk has completed his purchase of Twitter. Among his first official acts were the firing of top executives, including Parag Agrawal, CEO; Ned Segal, CFO; Sean Edgett, General Counsel, and Vijaya Gadde, top legal and policy executive (censorship czar). Gadde's removal is particularly pleasing to those who appreciate the 1st Amendment, freedom of speech, and American values, as she was the person most responsible for banning President Trump and hiding the Hunter Biden laptop story just days before the 2020 stolen election.

Musk's successful purchase of the company largely responsible for pushing false narratives and censoring the truth is a major step toward restoring traditional American values of hard work, family, and love of country and a major blow to the criminally insane "woke" ideology that has so deeply wounded and divided America by promoting deviant sexuality, transgenderism, vaccine and lockdown mandates, open borders, climate change, anti-Russia propaganda, and other assorted lunacies.

It cannot be understated how important Musk's takeover of Twitter really is. It's a major blow to leftist and communist ideology and a big boost to conservatism, coming less than two weeks before midterm elections in which Republicans are poised to slam the door shut on Democrats in the House and quite possibly the Senate.

Today, Friday, October 28, marks the beginning of the end of identity politics and the ugly cancel culture produced by fake news from mainstream media. As Twitter advances, expect other developments to follow. It's likely that President Trump will have his Twitter account reinstated, media mouthpieces for the unintelligible, illegitimate Biden administration will be terminated or, at least, exposed for the liars and propagandists they are, and voices of truth shall emerge from the shadows into which they were thrust by the former regime of censorship and fake news.

Before getting too far ahead of the story, be reminded of Downtown Magazine and Money Daily's position since November 3rd, 2020, which has never changed nor even wavered:

TRUMP WON BY A LANDSLIDE

As the midterms of November 8 come nearer, expect embattled Democrats to pull out all the stops to try to cancel, shade, or steal the elections for every member of the House and 34 Senate races. The probability of Republicans taking the House is nearly 100%, while the Senate - currently deadlocked with 50 Republicans and 48 Democrats plus two independents (Bernie Sanders (VT), and Angus King (ME). Key races include Pennsylvania, Arizona, Georgia, Wisconsin, Nevada, and North Carolina, all states that conducted shady election practices the night of November 3, 2020 and in the days which followed, turning Trump leads into Biden wins and eventually deciding the election in favor of the barely-coherent, basement-dwelling candidate over the wildly-popular Trump, whose rallies were attended by 10s of thousands across the country.

The "Big Lie" is that Biden won, not what the media has been pedaling for the past two years, that the election was on the up-and-up, fair and square. Trump won, and everybody knows this, including the media liars like Chuck Todd, Martha Raditz, Nora O'Donnell, George Stephanolpolis, and many others who have drunk liberal doses of woke Kool-aid and whose livelihoods are not at risk. They knew the truth, but decided to stick with the propaganda narrative and continuously promote it and other agendas like COVID-19, vaccinations, lockdowns, standing with Ukraine and other policies straight from Klaus Schwab and the World Economic Forum (WEF), promoting the "Great Reset."

There will be no Great Reset, at least not in any form favored by the WEF and its proponents. Change will be more on the order of a great restoration, complete with a wall at the southern border, energy independence, and a less-restrictive federal government. They tyranny of the minority (and the left has always been a minority) is ending and the world is watching. Economic, social, and political conditions are about to change for the better, that is, unless Brandon and his handlers nuke everybody back to the stone age first.

It's not going to happen overnight, and probably not without more violence, soul-searching, and courage, the final element needed by American citizens to stop the madness of stolen elections, corrupt career politicians, the situation in Ukraine, and all the rest that's been thrust in their faces the past two years.

Democrats are not the only enemies to freedom. There are more than a few Republicans - mostly called RINOs or neocons - that willingly went along with the Russia, Russia, Russia narrative, anti-Trump rhetoric and the evils of big government. They too will hopefully be exposed, called out and eventually removed from positions of power. Freedom and liberty demands no less.

/Rant over

On the economic scene, the Dow Jones Industrials look to complete a fourth straight week on the positive side. As of Thursday's close, the Dow was up 950 points, riding a five-day win streak. Other indices have not been so lucky. The NASDAQ is down 67 points for the week, and, following disastrous, or at least disappointing, third quarter results from Google, Microsoft, Meta, and last night, Amazon, the tech wreckage continues. On a weekly basis, NASDAQ has returned a positive result just twice in the past six weeks. NASDAQ futures are deep in the red again this morning, while the Dow is mildly positive, the S&P also down, about 15 points.

With the S&P up 54 points for the week, Friday's prospects appear iffy for a second straight winning week and three of the last four.

Futures are mixed, Europe, and Asia overnight, are a sea of red. Gold, siver, and bitcoin are down. Yield on the 10-year note is once again above four percent.

Good luck. Have a happy weekend.

At the Close, Thursday, October 27, 2022:
Dow: 32,033.28, +194.17 (+0.61%)
NASDAQ: 10,792.67, -178.32 (-1.63%)
S&P 500: 3,807.30, -23.30 (-0.61%)
NYSE: 14,569.90, +38.20 (+0.26%)


Big Reporting Day for US Corporates Shows Resilience; ECB Hikes 75 Basis Points; META Self-Destructs

Thursday, October 27, 2022, 9:21 am ET

Thursday figures to be quite the volatile day on Wall Street and in equity and fixed income markets.

Not only is it one of the top days for Q3 reporting, with more than 750 companies releasing reports, and, additionally, the ECB has announced a third straight 75 basis point hike to their deposit rate, similar in structure to the US federal funds rate, the Twitterverse is reacting to Elon Musk's surprise visit to Twitter headquarters on Wednesday in anticipation of his taking over the company on Friday, and markets are reacting to another poor quarter from Meta Platforms (META), the former Facebook, which bet its future on virtual reality, a mental diversion of which almost nobody is adopting.

With all that has already happened or is about to, the Dow managed to close up an entire two points on Wednesday, while the NASDAQ continued to dive and the S&P exceeded and then failed at the 38.2% Fibonacci retrace (3860) of the August-September decline. Bucking the trend was the NYSE Composite, with a 91-point gain. Overnight, Asian equities were mixed, showing little enthusiasm, and, as the day progresses across the Atlantic, European stocks are recovering off midday lows, led the DAX (Germany) and the CAC-30 (France).

Here's a rundown of stocks reporting Wednesday night and Thursday morning:

Ford Motor Company (F), as expected, fell short of expectations, posting 0.30 per share for the third quarter while trimming forward guidance. Pre-market trading is down nearly two percent on the iconic automaker.

Tobacco giant, Altria (MO) Reported diluted EPS of $0.12 and Adjusted diluted EPS of $1.28, excluding special items. Since financial accounting has become such a bastardized profession, Wall Street prefers to look primarily at the adjusted figures, which still fell two cents short of expectations, but were still six cents better than year-prior results. Revenue was down, as are shares trading in the pre-market, -2.5%.

McDonald's (MCD) reported Q3 revenue of $5.87 billion versus $5.70 billion expected, adjusted EPS of $2.68 versus $2.57 expected, US same-store sales up 6.1% versus 3.66% expected, and international same-store sales up 8.5% versus 5.60% expected, mostly to to price increases, furthering the argument that food inflation is being exacerbated by multi-national corporations, who are unable to see the future of higher prices as unsustainable as the economy continues to be dragged down.

Caterpillar (CAT) bucked all trends, reporting sharply higher EPS of $3.95 per share, against estimates of $3.16 per share. Revenues of $15 billion also topped expectations for the heavy equipment manufacturer. Share are up four to five percent pre-market.

Drug-maker Merck (MRK) had adjusted earnings for the third quarter at $1.85 per share, up 5.7% from the same period in 2021, solidly ahead of the Street consensus forecast of $1.71 per share. Group revenues rose 13.8% to $14.96 billion, against a $14.1 billion tally forecast.

MasterCard (MA) reported adjusted net income was $2.6 billion, and adjusted diluted EPS of $2.68 for the third quarter, with net revenue of $5.8 billion, an increase of 15%, and gross dollar volume up 11% and purchase volume up 15%, on a local currency basis. The solid results haven't translated into gains for the stock, down marginally in pre-market trading.

Southwest Airlines (LUV) saw net income, excluding special items1, of $316 million, or $0.50 per diluted share for the third quarter and record third quarter operating revenues of $6.2 billion. Shares are two to three percent higher prior to the opening bell.

As for META, to call the company's performance a virtual disaster would be a pun too far. Let's leave it at dumpster fire as the company smolders under the leadership of the clueless zombie, Mark Zuckerberg. Shares of the stock were already down 61% year-to-date and are dropping by more than 23% in the pre-market, to $99.70, from a high of $336 on January 4, 2022.

Amazon (AMZN) reports after the close, along with Apple (AAPL), two more tech giants looking to reverse the recent trend lower.

Nothing really surprising from the earnings reports other than companies displaying unusually strong resilience under challenging conditions. A number of bright spots detected, especially from Southwest Airlines, Merck, and Caterpillar.

Additionally, the first estimate of third quarter GDP came in at +2.57%. What recession? It's over. The Fed can now raise interest rates only 50 basis points next Wednesday, just in time for the midterms. Everybody vote Democrat because they are so awesome.

At the Close, Wednesday, October 26, 2022:
Dow: 31,839.11, +2.37 (+0.01%)
NASDAQ: 10,970.99, -228.12 (-2.04%)
S&P 500: 3,830.60, -28.51 (-0.74%)
NYSE: 14,531.69, +91.00 (+0.63%)


Catastrophe Coming at Full Speed as Wall Street Whistles Past the Graveyard; S&P Closed Tuesday at 38.2% Fibonacci Retrace

Wednesday, October 26, 2022, 9:19 am ET

Skeptics eventually become cynics when they see everything around them encased in multiple layers of fraud, self-dealing, obfuscation and propaganda.

The world is already highly skeptical of Western politicians and business leaders. On the whole, they're a failure on orders of magnitude not seen since the American (1775-1783) and French Revolutions (1789-1799) did away with the status quo.

Unless the midterm elections are irretrievably broken and stolen by Democrats, on Tuesday, November 8, the entire planet is going to go into convulsions, if not sooner.

Anybody tired of hearing about the CBDC and social credit score that will ensue in the aftermath Great Reset has to be aware that the US is years behind in its development and in Europe it's been delegated to back burners which are only operable a few hours a day due to their ongoing - and worsening - energy crisis, the one they themselves instigated. Besides that, between the Fed, US Treasury, and the ECB, they don't have the brains to implement anything more innovative than Brrrrrrrr with the printing press and trotting out the occasional economist, banker, or official to deliver hollow bullet points to swing markets on a day-to-day basis.

The endgame is coming for all fiat. Just in case you haven't noticed, despite rising against other doomed currencies, the US dollar buys less and less of everything every day. The entire structure is fractured at the base and is ready to topple over at any time. The Fed can raise interest rates to 100% and it will not stop the inflation genie that's already escaped from the bottle from destroying the remaining 2% of value in the good old greenback.

Once everybody and everything is denominated in US$, the plug gets pulled, chaos ensues, gold, silver, real estate, and other hard assets will be the only survivors and they will be priced in their own values, as in "your car is now now worth 200 ounces of silver," etc..

CBDCs will never gain a strong enough foothold to sustain long term, if they even are implemented. The WEF crowd that promotes all the things that are wrong with their imaginary future in which people "will own nothing and be happy" will be taking their Great Reset back to their collective globalist garage for a re-tuning.

November 8 will not be the end of globalist reaching for a duller future. They've managed to break down so much of the world - especially the UK Commonwealth and the EU - that the damage done may be irreparable in places like Australia, England, Germany, and Italy, that these countries will no longer be mentioned as "developed" but rather as "devolving third and fourth world dung-holes." Maybe. We'll see.

In the meantime, the run-up to the US midterms is being managed as close to the script as possible by the proponents of WEF-ideology. Stocks are up despite continued bad news. Many of the companies reporting earnings "beats" are reporting third quarter figures that pale against year-ago results. In other words, even with inflation of 8-10%, revenues may be up, driven by inflation in cyclical fashion, but the bottom line reeks of failure.

Here are some examples:

Alphabet Inc. (GOOG) reported after the bell Tuesday, Q3 2022: EPS 1.06 (exp. 1.25), Revenue 69.1bln (exp. 70.61bln). Google advertising revenue 54.48bln (exp. 56.98bln). Google Cloud revenue USD 6.87bln (exp. 6.61bln). -6.51% in pre-market trade.

A year ago, Alphabet returned $1.53 per share. $1.06 in inflated dollars is an outright disaster. The stock closed Tuesday at 104. Look for 75 by February, maybe, hopefully, sooner. Google reeks of wokeness and disruptive practices.

Microsoft Corp. (MSFT) also reported after the bell Tuesday, fiscal Q1 2023: EPS 2.35 (exp. 2.30), Revenue 50.1bln (exp. 49.61bln). Sees Q2 Intelligent Cloud Revenue 21.25-21.55bln (exp. 22.01bln); More Personal Computing Revenue 14.5-14.9bln (exp. 16.92bln); Productivity and Business Processes Revenue 16.6-16.9bln (exp. 17.19bln). Fittingly, -6.66% in pre-market trade.

Microsoft is exactly the kind of company that will fail spectacularly when the wheels come fully off the globalist constructs. Shares of the company closed Tuesday at 250.66, now trading around 233 in the pre-market. Even with their pie-in-the-face forward guidance, a few analysts are reiterating their buy recommendations with price targets of 270 to 300. It's likely that MSFT will see 200 before then and even 150 as the economy deteriorates further in 2023. Forget about a chips shortage. Crashing consumer demand for PCs took care of that little problem.

This morning, Kraft Heinz (KHC) reported net income attributable to common shareholders of $432 million, or 35 cents per share, for the quarter ended Sept. 24, compared with $733 million, or 59 cents per share, a year earlier. Make note that all of the financial pundits are going with the "adjusted EPS" of 65 cents, accompanied by copious footnoting. All of the key metrics are down substantially.

Net income/(loss) decreased 40.8 percent versus the year-ago period.

Year-to-date net cash provided by operating activities was $1.5 billion, down 38.0 percent versus the year-ago period.

Year-to-date Free Cash Flow was $885 million, down 50.7 percent versus the comparable prior year period.

Is this a stock anybody should own? They've followed the same path as Coca-Cola (KO) and PepsiCo (PEP) this year, increasing prices by 15%. You see food inflation, these globalist companies which produce mostly food that's full of chemicals, GMOs, and assorted other nastiness, see profits. Kraft Heinz, the result of a merger between two big "food" producers, has the Heinz family as a major shareholder, including former senator and presidential candidate (2004) John Kerry, who doesn't care what ketchup the peons put on their burgers or fries, as long as it's Heinz. Thank welfare, food stamps.

Later today, after another sickening session of fakes, re-takes, PPT pumps and dumps, and insider fraud trading, the company formerly known as Facebook will report third quarter earnings. Now known as Meta (META), this figures to be only the latest tech wreck, though it is likely to be spectacular. META shares are already down nearly 60% year-to-date, from a share price of 336 in January to 137.51, and is down to 131 and change pre-market. And they haven't even reported yet! Astonishing.

Just a couple of quick takes a half hour before the opening bell: Bitcoin has rallied on two distinctive spikes overnight, to as high as $20,729, the first big jump since mid-September, when it shot up above $22,000. Meanwhile, gold and silver were up, but are being beaten back down prior to the market open. Somehow, somewhere in an alternative universe, bitcoin is a better buy than gold or silver, which have been money for most of the past 5000 years.

And, in case you're scoring at home (or even if you're alone - h/t the former Keith Olbermann), that close Tuesday on the S&P could not have been any closer to the 38.2% Fibonacci retrace Money Daily has been touting for the past three weeks.

Fibonacci ratios encompassing the most recent substantial movement for the S&P are as follows:

S&P 500
August 16: 4,305.20
September 30: 3,585.62
Total decline: 719.58

Fibonacci ratios: 100%, 61.8%, 50%, 38.2%, 23.6%

Retraces:
23.6%... 169.82... 3,755.44
38.2%... 274.88... 3,860.50
50.0%... 359.79... 3,945.41
61.8%... 444.70... 4,030.32

At the Close, Tuesday, October 25, 2022:
Dow: 31,836.74, +337.12 (+1.07%)
NASDAQ: 11,199.12, +246.50 (+2.25%)
S&P 500: 3,859.11, +61.77 (+1.63%)
NYSE: 14,440.69, +214.59 (+1.51%)


Banks, Lenders Concerned as Credit Loss Provisions Rise in Q3; Big Earnings Week Rolls on as Coca-Cola, UPS, GM Report

Tuesday, October 25, 2022, 8:44 am ET

This is a huge week for earnings, as nearly half of S&P 500 companies are reporting third quarter results. Thursday looks to be the make or break day for stocks as Shopify (SHOP), Caterpillar (CAT), Southwest Airlines (LUV), MasterCard (MA), McDonald's (MCD), Merck (MRK), Comcast (CMCSA), Altria (MO) and Credit Suisse (CS) open their books before the opening bell, and, Apple (AAPL), Amazon (AMZN), and Intel (INTC) report after the close.

Monday, after the close, Discover Financial Services (DFS) kept pace with their peers, reporting a credit loss provision of $773 million, an increase of $588 million from the prior year.

That stacks up against the likes of some of the major financial firms, such oas Bank of America (BAC), Goldman Sachs (GS), JP Morgan Chase (JPM), PNC Financial (PNC), Citigroup (C) and others. Overall, the nine largest banking and lending institutions have set aside a combined $6 billion in loan-loss provisions in the third quarter, up 23% from Q2 and the most since Q3 2020.

Discover found its credit card net charge-off rate was 1.92%, up 27 basis points from the prior year period and down 9 basis points from the prior quarter. The 30+ day delinquency rate for credit card loans was 2.11%, up 63 basis points year-over year and 35 basis point from the prior quarter.

The company's results were not all bad, though they missed the EPS target of $3.73, reporting net income of $1.0 billion or $3.54 per diluted share for the third quarter. Shares were off more than one percent in the after-market.

Higher provisions for loan losses normally indicate banks seeing higher late payments, 30+ day delinquencies, defaults and charge-offs, the current environment concerned over a combination of high inflation and wage stagnation, with consumers struggling to make ends meet.

Recent optimism in stocks, has been driven to a large extent by the banking and finance sector, outpacing the 5.9% gain on the S&P since September 30. Bank of America and JP Morgan Chase are two exemplars, respectively up 13 and 14% over the past month.

Bank coffers have swelled in recent months, spurring a buying spree in the beaten-down sector, the increase in potential deliquencies and defaults being largely ignored at present, though investors risk being wrong-footed if loan loss porivisions rise again when companies report year-end and fourth quarter earnings in January.

As the finance sector has led the charge higher in October, individual names appear vulnerable to inflation/recession risk heading into the holiday season and beyond. Benefitting from higher interest rates on credit cards, personal loans and mortgages, the banks face a double-edged sword as consumers struggle with higher monthly payments and tighter budgets.

It's a situation warranting careful consideration.

3M (MMM), a major component of the Dow Jones Industrial Average, reported third quarter results Tuesday morning, the stock taking a two to three percent hit in pre-market trading as the company earned $2.69 per share, up 9.8% from the same period last year and 9 cents ahead consensus forecast. Revenues fell 4% to $8.6 billion.

Looking into the final months of the year, 3M said it now sees adjusted earnings in the region of $10.10 to $10.35 share, down from the $10.30 to $10.80 per share range it forecast in April, citing strength of the US dollar against other currencies as the primary cause. A global concern, 3M and other multi-nationals are experiencing currency conversion pain as a strong dollar has battered other sovereign currencies, especially the yen, pound, and euro.

Should the dollar continue its ascent, these companies will be under increased pressure. 3M is already down 33% year-to-date. Trading around $113 per share, the stock is down from a high of 181 in early January.

On the other end of the spectrum, the Coca-Cola Company (KO) has displayed resilience and innovation through three quarters of 2022, reporting Q3 EPS of $0.65 Tuesday morning and net revenues of $11.1 billion, a 10% gain.

Shares for the beverage company are trending three percent higher in the pre-market on a one cent earnings beat and positive forward guidance. Like rival PepsiCo (PEP), the consumer brand cites higher pricing on its products a primary catalyst for its strong showing.

United Parcel Service (UPS) adjusted third-quarter profit rose to $2.99 per share beating Wall Street estimates of $2.84 per share. Unlike rival FedEx (FDX), UPS managed slightly reduced package volumes, offsetting the decline with higher prices on domestic and international deliveries.

General Motors (GM) handily beat street estimates of $1.88 per share, earning $2.35 for the quarter, up 48% versus a year earlier. Revenue was up 56% to $41.89 billion. Despite a blowout quarter, GM did not raise full-year guidance. Shares are up three to four percent in brisk pre-market action.

Despite the mixed to generally good results reported overnight and this morning, stock futures are down significantly with an hour remaining to the opening bell, likely the result of an overbought market which has seen spirited buying the past two sessions and the major indices up sharply since Thursday, October 13. The Dow has been the strongest, finishing above its 50-day moving average on Monday for the first time in over a month.

Elsewhere, gold and silver are getting their usual beatings, with gold down $6.20 per ounce to 1,647.90 and silver off nearly two percent at $18.83.

With earnings reports coming fast and furious, midterm elections looming and the situation in Ukraine continuing to deteriorate, the market is very tradable, though extremely volatile.

At the Close, Monday, October 24, 2022:
Dow: 31,499.62, +417.06 (+1.34%)
NASDAQ: 10,952.61, +92.90 (+0.86%)
S&P 500: 3,797.34, +44.59 (+1.19%)
NYSE: 14,226.11, +82.05 (+0.58%)


WEEKEND WRAP: Suspicious Trades, Suspicious Minds

Sunday, October 23, 2022, 9:20 am ET

"Inflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output."
-- Milton Friedman

"The secret to your financial success is inside yourself. If you become a critical thinker who takes no Wall Street 'fact' on faith, and you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing your discipline and your courage, you can refuse to let other people's mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave."
-- Benjamin Graham

In the event that Friday's mass formation to the upside surprised anyone, the game was rigged by the Federal Reserve, as the case may be, when, just prior to the opening bell, Fed "whisperer" Nick Timiraos of the Wall Street Journal sent out a tweet suggesting a step down from a 75 basis point interest rate hike in November to 50 in December.

Though not substantial news, it managed to turn heads and turn the pre-market mood from deeply negative to overwhelmingly positive. That's how badly this market is (not) functioning. When one tweet can turn the entire market on a dime, that's not a market anybody should be trading. Worse yet, there wasn't even any news there. The Fed's done three straight 75 basis point raises, and November's has been pretty much locked in. A 50 basis point hike in December would surprise exactly nobody.

So it goes. Eerily suspicious.

Stocks

For the Dow Industrials, this was the fourth-best weekly point gain of the year. At 4.89%, it was in line with the top three, as shown below. Prices shown are closing figures, Friday to Friday.

March 11: 32,944.19
March 18: 34,754.93
Gain: 1810.74

May 20: 31,261.90
May 27: 33,212.96
Gain: 1951.06

June 17: 29,888.78
June 24: 31,500.68
Gain: 1611.90

October 14: 29,634.83
October 21: 31,082.56
Gain: 1447.73

What is disturbing to investors is that each of these large gains came off a significant low from the prior week, except for the most recent. The Dow made a new low on September 30, at 28,725.51, so this move was three weeks in the making. The Dow has actually closed higher on a weekly basis for three weeks running.

Thus, for the month of October, the Dow has soared some 2,357.05 points. That's a substantial, 8.2% return over three weeks. Has buying the dip come back into vogue? Perhaps. Those of a more cynical view will note that there are important midterm elections upcoming November 8, and a rising stock market may work wonders for embattled Democrats seeking to maintain their hold on power. With two more weeks until the elections, corporate earnings could spur a continuation of the win streak, though results so far have been less than spectacular, the "all good" narrative boosted by lowered expectations. Many companies have shown third quarter results with EPS down from the same period in 2021.

This week's roster of reporting companies has quite a bit of breadth, covering numerous segments and featuring no less than 11 Dow stocks. Leading off is Discover Financial Services (DFS), after the close Monday. UPS (UPS), Coca-Cola (KO), General Motors (GM), General Electric (GE), 3M (MMM), and Raytheon (RTX) report Tuesday before the opening bell. After the close, Microsoft (MSFT), Visa (V), Chipotle (CMG) and Alphabet (GOOG).

Wednesday morning, Boeing (BA), Hilton (HLT), General Dynamics (GD), Hess (HES), and Kraft Heinz (KHC) report. After the close, Meta (META), Ford (F), and O'Reilly Auto Parts (ORLY).

Thursday will be the blockbuster day with Shopify (SHOP), Caterpillar (CAT), Southwest Airlines (LUV), MasterCard (MA), McDonald's (MCD), Merck (MRK), Comcast (CMCSA), Altria (MO) and Credit Suisse (CS) opening their books before the opening bell, and, Apple (AAPL), Amazon (AMZN), and Intel (INTC) after the close.

Friday offers ExxonMobil (XOM), Chevron (CVX), Colgate-Palmolive (CL), and Charter Communications (CHTR) prior to the open.

As for the S&P, the upside move only brought it back to the nearest Fibonacci retracement (23.6%). Here is the information and table Money Daily has now reposted four times.

Fibonacci ratios encompassing the most recent substantial movement for the S&P are as follows:

S&P 500
August 16: 4,305.20
September 30: 3,585.62
Total decline: 719.58

Fibonacci ratios: 100%, 61.8%, 50%, 38.2%, 23.6%

Retraces:
23.6%... 169.82... 3,755.44
38.2%... 274.88... 3,860.50
50.0%... 359.79... 3,945.41
61.8%... 444.70... 4,030.32

With the S&P closing out the week at 3,752.75, that appears to be close enough to call it a full retrace. Also, the most recent intra-day high for the SPX was 3,762.79 (October 18), again, close enough for only Fib fans. If that level holds and stocks reverse off the week's big gains, it's a wrap and a selloff should commence. If not, look for 3,860 for the next upper resistance level.


Treasury Yield Curve Rates

Date 1 Mo 2 Mo 3 Mo 6 Mo 1 Yr
09/23/2022 2.67 3.07 3.24 3.85 4.15
09/30/2022 2.79 3.20 3.33 3.92 4.05
10/07/2022 3.03 3.34 3.45 4.09 4.24
10/14/2022 3.30 3.61 3.81 4.31 4.50
10/21/2022 3.55 3.78 4.09 4.43 4.58

Date 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
09/23/2022 4.20 4.21 3.96 3.85 3.69 3.87 3.61
09/30/2022 4.22 4.25 4.06 3.97 3.83 4.08 3.79
10/07/2022 4.30 4.33 4.14 4.03 3.89 4.13 3.86
10/14/2022 4.48 4.47 4.25 4.15 4.00 4.26 3.99
10/21/2022 4.49 4.52 4.34 4.28 4.21 4.54 4.33

The stock market rally did little to assuage the bond market. On the whole, the curve steepened slightly, from 69 basis points to 78 for the week, from 1-month out to 30-years. Yield on the one-month bills rose 25 basis points, but the 30-year gained 34, to a whopping 4.33%. A sub-par auction on 20-year bonds sent the yield to 4.54, up 28 bp.

One and three-year yields were as high as 4.66% on Thursday, before retreating back to 4.58% and 4.52%, respectively. Inversion still holds, though the spread on 2s-10s shrunk from 48 basis points last Friday (10/14) to a mere 28 this week.

The entire curve elevated, the shocker for the holidays will be fives showing up in the 1, 2, 3, 5, and 7-year notes around Thanksgiving. While that may be stunning to some, those rates were normal back in the 70s and 80s. The Fed is trying to return the treasury market to sanity after 20 years of radical policy.

Oil/Gas

WTI crude oil was $93.20 at the close on Friday, October 7, but fell to $85.55 by the 14th, and remained subdued, finishing the week at $85.14. Attempts to scare consumers with ominous-sounding production cuts from OPEC+ are not working, mostly because the producers haven't been hitting their targets all year, so any reduction will only result in roughly the same amount of oil coming out of the ground.

In the US, the national average for a gallon of regular 87 octane gas fell, from $3.91 a week ago, to $3.79 this week. Only Nevada (5.08), Oregon ($5.06) and California ($6.14) remain over $5.00/gallon. Washington has fallen to $4.985. The cheapest gas can be found in Georgia and Texas, at $3.16 and $3.18, respectively. The Southeastern states continue to trend well under $4.00 per gallon.


Crypto

Bitcoin remains the most stable of all crypto, hanging around $19,000, mainly as a base price, for the last five months, this morning showing $19,156.50.

It's still not money in any real sense, but is tradable if that's your bag, though hardly un-trackable.


Precious Metals

Gold/Silver Ratio: 85.70

Gold price 09/23: $1,651.70
Gold price 09/30: $1,668.30
Gold price 10/07: $1,701.80
Gold price 10/14: $1,650.20
Gold price 10/21: $1,662.50

Silver price 09/23: $18.84
Silver price 09/30: $19.01
Silver price 10/07: $20.16
Silver price 10/14: $18.20
Silver price 10/21: $19.40

Gold and silver were looking squarely at another week of depressed prices as of Thursday evening. Gold dropped as low as $1623.10 in the wee hours of Friday morning, but, coinciding with the "Fed Whisperer" tweet, began a major ascent to close out the week with an overall gain of $25.70 on the day and $12.30 higher for the week.

Silver, which had held up better during the week, but was at $18.21 early Friday, took a similar path higher, with a 71 cent gain on the day, good for 3.40%. Silver continues to appear ready for a break-out. Both precious metals prices advanced on Friday as the dollar sold off, a phenomena not seen recently.

No lack of buyers (or sellers) present on eBay or via online dealers, though rumors of a silver shortage persist. As far as smaller denominations are concerned, premiums remain elevated, but buying trends remain brisk, to say the least. More and more money is moving into gold and silver and away from dollar-denominated assets.

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: 26.95 41.03 36.50 36.48
1 oz silver bar: 30.00 40.00 35.37 35.47
1 oz gold coin: 1,777.65 1,923.69 1,830.05 1,815.39
1 oz gold bar: 1,759.65 1,823.49 1,779.76 1,778.09

The Single Ounce Silver Market Price Benchmark (SOSMPB) gained again this week, to $35.96, losing 26 cents from the October 16 price of $35.70.


WEEKEND WRAP

Only one way to sum up the week:

We can't go on together
With suspicious minds
And we can't build our dreams
On suspicious minds

-- Written and originally recorded by Mark James, released as a single by Elvis Presley, August 26, 1969.

We're caught in a trap.

At the Close, Friday, October 21, 2022:
Dow: 31,082.56, +748.97 (+2.47%)
NASDAQ: 10,859.72, +244.87 (+2.31%)
S&P 500: 3,752.75, +86.97 (+2.37%)
NYSE: 14,144.05, +303.58 (+2.19%)

For the Week:
Dow: +1447.73 (+4.89%)
NASDAQ: +538.33 (+5.22%)
S&P 500: +169.68 (+4.74%)
NYSE: +536.75 (+3.94%)


Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2022, Downtown Magazine Inc., all rights reserved.

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