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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.
PRIOR COVERAGE:
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Friday, November 1, 2024, 9:07 am ET So, how did October work out for you?
For the month, 10/1-10/31 If you were holding stocks through most of October and got out before the 31st, you likely ended up with a profit. For those in long-term holding patterns, sorry. Better luck next time (month). The markets seem to want to tell us something. What could it be? Stocks are fake and gay? Maybe, but more to the point, they're massively overvalued, whereas real money, gold and silver, had a solid showing in the haunting month just passed. Apologies go out to ghouls and Yankee fans. Game five's fifth inning showed exactly why the Dodgers won four games to one. The Yankees were undisciplined and overconfident, while the Dodgers took nothing for granted and pressed hard in critical situations. By the way, the Yankees were also badly out-managed. Dave Roberts made Aaron Boone look like he should have been coaching Little League. Of course, Series MVP Freddie Freeman was simply fantastic, possibly the greatest pure baseball player of this era and a certain first-vote Hall of Famer. But, enough about the baseball season. It's over. We'll get 'em next year. Stocks took a severe downturn the last day of October. It was ugly, most likely because companies like Microsoft and Meta Platforms are spending ungodly amounts of money on AI infrastructure and producing very few tangible results that might result in making life for people - just anybody, not rich folks, or poor, or white or green - better. Like most everything out of Wall Street or Washington, D.C., it's a sham, a fraud, a waste. But, if you're slick enough, and quick enough, you could have made massive amounts of fake fiat money betting on Nvidia or META or any of the darling Magnificent Seven tech darlings. You could have invested in Alphabet, parent of Google, the company that routinely shades the truth, de-platforms conservative opiners or anybody who doesn't toe the company line, and trashes search to a point at which you only see what they want you to see. So, that's a good investment, right? Sorry. Wrong. Just like Pfizer wasn't a good investment during the COVID panic. Sure, you made money on the stock, but at the cost of your soul. And that's sad. The saddest part of economics and stocks and investments is how people who might, in another scenario, actually be honorable and good, but when it comes to money, they're ruthless and unscrupulous. There were more earnings reported after the bell on Thursday. Apple (AAPL) had earnings per share (EPS) of $0.97 on revenue of $94.9 billion, its profits slashed by a one-time charge imposed by a European General Court decision that required Apple to pay 13 billion euros to Ireland for back taxes. The stock is down sharply, more than four percent in the pre-market. Amazon (AMZN) fared better, with EPS of $1.43, well ahead estimates of $1.14. The world's largest online retailer is trading higher by more than seven percent. Intel (INTC), which traded as high as 50 less than a year ago but is now mired in the teens and low 20s, is also getting an AI boost this morning, up about seven percent, after reporting a $16 billion loss, but tempered that with an improved forecast. Who does that? And why? Friday, prior to the open, Wayfair (W) lost money in the quarter but since that was expected, the stock is up four to five percent. Charter Communications (CHTR) beat and the stock is up more than five percent. Finally, ExxonMobil (XOM) is up about two percent after beating earnings estimates and raising its dividend. Chevron (CVX) topped estimates on improved production, sending shares higher by two percent in the pre-market. Of course, none of this matters since its the first of the month and the BLS released the October Non-Farm Payroll report, showing that America the Beautiful created 12,000 new jobs. Employment was essentially unchanged and the unemployment rate was stable at 4.1 percent. Needless to say, this was shocking news. So shocking in fact, that stock futures shot higher. The BLS, as honest a bunch of bureaucrats as can be found in Washington, D.C., blamed hurricanes and strikes for the lowball number. (They are probably promising to revise it higher next month)
The change in total nonfarm payroll employment for August was revised down by 81,000, from +159,000 to +78,000, and the change for September was revised down by 31,000, from +254,000 to +223,000. With these revisions, employment in August and September combined is 112,000 lower than previously reported. OK, now we believe you. Such a joke. Four days until Election Day. Have a nice weekend.
At the Close, Thursday, October 31, 2024:
Thursday, October 31, 2024, 9:11 am ET Stocks ended Wednesday's session in an ugly manner, closing lower across the board. After the close on Wednesday, a slew of companies reported third quarter results, including Etsy (ETSY), Carvana (CVNA), Starbucks (SBUX), Coinbase (COIN), Meta Platforms (META), Microsoft (MSFT), and Roku (ROKU). Thursday, prior to the open, Merck (MRK), Conoco Phillips (COP), Altria (MO), Estee Lauder (EL), Uber (UBER), Mastercard (MA), and Peloton (PTON) reported, though far and away the big tech names received the most attention. Microsoft (MSFT) was trending three to four percent lower in pre-market trading after beating on both top and bottom lines, but forecast that higher spending on AI would cut into future profits. Meta Platforms (META) posted solid results but Mark Zuckerberg. forecast a "significant acceleration" in AI spending. Both stocks were down overnight and into the pre-market session, though only by two to three percent. Starbucks (SBUX) missed on key metrics, including same-store sales down seven percent, reduced revenue and adjusted earnings per share that fell short of expectations. The company's reported 0.80 EPS missed estimates of 1.03. Coinbase (COIN) posted EPS of 28 cents, missing estimates of 41, sending shares sliding 2.5%. Mastercard (MA) earned $3.89 per share, topping expectations of $3.74, excluding one-time costs. Estee Lauder (EL) was being savaged pre-market, down 24% as it missed revenue and earnings expectations, slashed its quarterly dividend and withdrew its 2025 forecast, citing uncertainty in its China business. Shares of UBER were down nearly 10% as gross bookings for its ride-sharing service fell sharply during the quarter. Drug-maker Merck (MRK) reported adjusted EPS of 1.57, though that figure was well short of prior quarter and year-ago figures, sending shares down more than two percent. Adding to the troubling earnings picture, the Fed's preferred inflation gauge, Core PCE, came in hotter than anticipated, reading 2.7% on an annualized basis, rekindling fears that the Fed might not be as diligent in cutting rates over the next six to eight months. The Fed is widely expected to cut the federal funds rate another 25 basis points next week after cutting 50 basis points at the September FOMC meeting. All of this added up to some trepidation heading into the Halloween session, the last of the month. Stock futures were down sharply. Dow: -222; NASDAQ, -144; S&P, -38. Gold flirted with $2800 late Wednesday and has since pulled back to around $2785. Silver was also down, trending around $33.50 per ounce. With U.S. Election Day five days off, some people are being spooked by numbers they didn't want to see.
At the Close, Wednesday, October 30, 2024:
Wednesday, October 30, 2024, 9:26 am ET Election Day is six days away. The situation is appalling. To think that a candidate so distinctly unqualified as Kamala Harris has any reasonable chance of winning the presidential election is a mind-boggling exercise conditioned on either the American public being completely brainwashed or stupid or a combination of both. The end of this post examines one particular poll. Getting down to the politics of Wall Street, the overwhelming narrative the past few weeks has been the growth of the so-called "Trump trade", predicated on the idea that Trump will win the election. Anything that appreciated since mid-October is assigned a Trump victory insignia, whether it be gold, silver, bitcoin, tech stocks, bonds, or mutual funds. Obviously, the price of oil (and, by extension, home heating and gas at the pump) is going to be lower once Trump takes up residence in the White House. Bitcoin will likely go over the moon. Stocks will continue to levitate, but probably even higher, we are led to believe. Talk about gaslightining, this is just plain stupid. Otherwise, some companies reported third quarter earnings after Tuesday's close or prior to Wednesday's opening bell. Here's a quick rundown: Reporting after Tuesday's close, Alphabet (GOOG), parent of Google, smashed expectations and is indicated up by more than six percent pre-market. Reddit (RDDT) is up 22% pre-market on earnings beat and big forecast. Visa (V) topped estimates and is ahead by two to three percent. Chipolte Mexican Grill (CMG) missed earnings estimates and noted same-store sales lower, The stock is trending down roughly three percent. Chubb (CB) beat, flat. Snap (SNAP) shares jump 7-10% on profit beat, stock buyback. Advanced Micro Devices (AMD) failed to impress with their forecast and is being sold down the river by more than seven percent. Apparently, the executives didn't say "AI" enough on the conference call. Tuesday morning, Eli Lilly (LLY) missed bottom line and issued a sour forecast, sending shares down 10 percent. ADP (ADP) is flat, no relevant news. Humana (HUM) 3Q revenue topped estimates; the company adjusts FY24 outlook, stock is down about two percent. Finally, Dow component Caterpillar (CAT) missed top and bottom line, cut the annual forecast and shares are tumbling three percent pre-market. Taking all of this noise into account, stock futures are flat to lower, with Dow futures off 78 points, NASDAQ and S&P futures essentially flat. Has the "Trump trade" stalled out or are some people looking at the Shiller CAPE PE at 37.17 and beginning to think this boom might soon bust? Gold hit another record high on Tuesday and futures are up again this morning, at $2795.50. Silver is moving in the opposite direction, down 20 cents to $34.24 on the COMEX. Trying to understand the methodology of polls, for example, this New Jersey poll, conducted by Rutgers/Eagleton [PDF] shows Harris winning by a margin of 51% to 37% over Trump, is a challenge. Bear in mind, these are a few of the percentages employed by this poll are published at the very end of the document linked above.
Type, percentage, margin of error
Democrat 39%, +/- 6.3% Somehow, out of these margins of error, and others (income, education, location, etc.) that are the same or larger, the entire poll comes out to a margin of error of +/- 4.2 percentage points. Really? Statisticians may want to note that with such large margins, the chance that those margins would be amplified across the entire poll spectrum, resulting in a nullity is enormous. In mathematics, if some calculations are off by 3 or 4 percent - to say nothing of the 6 to 8 percent and higher in the New Jersey poll - and are imputed to other variables with equal or higher errors, the result would be a monstrous error. It's like building a bridge that would collapse immediately if even able to be constructed. While it's understandable that there are far fewer registered Republicans than Democrats in the state, and, out of 100 people, 54 of them would be women and 46 men, it still boggles the mind that people in New Jersey are so hopelessly brainwashed that Kamala Harris would win by such a large margin. Polls like this are constructed to give false impressions and to provide the media and polling outfits with plausible deniability. They should in no way, shape, or form be trusted or employed by the media to offer an "accurate" estimate, but they are, almost exclusively in mainstream media. It's a pack of lies.
At the Close, Tuesday, October 29, 2024:
Tuesday, October 29, 2024, 12:04 pm ET Editor's Note: Due to some emergency scheduling problems, today's post was delayed some hours, so here's a midday report. The last four trading sessions of October started with Monday's orgy of buying, sending the NASDAQ to record highs, but, after the close and into the early morning, earnings from various companies sent stock futures tumbling. Ford (F) reported thrid quarter earnings after the bell on Monday. Despite a top-line beat, shares of the automaker were sharply lower, down six to seven percent in after-market and pre-market trading as the company lowered its earnings forecast for the full year to the lower end of the range. During regular hours, Ford was down eight to nine percent. Tuesday morning, McDonald's (MCD) reported same store sales down in the quarter, sending the stock lower by two to three percent. That didn't last, with shares in positive territory headed toward noon. Other companies reporting prior to the open on Tuesday include Sofi (SOFI), PayPal (PYPL), JetBlue (JBLU), Pfizer (PFE), British Petroleum (BP), Royal Caribbean (RCL); and after the closeing bell, Alphabet (GOOG), Reddit (RDDT), Visa (V), Chipolte Mexican Grill (CMG), Chubb (CB), Snap (SNAP), and AMD (AMD) are scheduled to report. Paypal (PYPL) reported $7.85 billion in revenue for the third quarter, a year-over-year increase of 5.8%. EPS of $1.20 for the same period compared poorly to $1.30 a year ago. Shares were down as much as four percent, but have been gaining ground throughout the morning. Pfizer beat on both revenue and profit, reporting third-quarter adjusted EPS of $1.06, up sharply from loss of 17 cents a year ago, beating the consensus of 62 cents. The U.S. drugmaker reported sales of $17.70 billion, up 31% year-over-year, handily beating the consensus of $14.95 billion. The stock has been cut in half from its high in December, 2021, at nearly $60/share. Pfizer is trading two percent lower nearing the noon hour. British Petroleum (BP) posted its lowest profit in four years, sending shares down five percent nearing midday. Royal Caribbean (RCL) beat top and bottom line, sending the stock price to a record high, up four percent. The biggest story of the day could be in the oil pits, where WTI crude has slumped below $67/barrel, the lowest in more than a month, approaching the September 10 low of $65.75. Losses incurred Monday are extending through Tuesday, suggesting severe demand destruction and an overall global glut. Gold is being bid, up around $20, approaching $2800. Silver also was taken higher, up to $34.45 at noon Eastern. At 12:00 pm ET, stocks are mixed, with the Dow down, NASDAQ up and S&P straddling the UNCH line.
At the Close, Monday, October 28, 2024:
Sunday, October 27, 2024, 11:24 am ET With the BRICS Summit and meetings of the World Bank and IMF staring each other down on the global diaspora, stocks got a little shaky during the week, with all of the major indices other than the NASDAQ ending the week under water. Days to the U.S. election run under two weeks, with both campaigns taking swipes at each other, though Republicans appeared to have the best of it, Trump taking the lead in nearly all the battleground states while Kamala Harris suspended her word salad tour, taking some time off and declining the invitation for an in-depth interview on the grand Poobah of podcasts, the Joe Rogan Experience. Donald Trump was more than happy to sit down with Rogan, racking up more points with voters just for being accessible, sitting down for a three-hour marathon session. Full interview:
On Saturday, Israel got busy, bombing strategic targets in Iran, escalating the Middle East conflict to higher levels, but falling short of crippling strikes on energy infrastructure, a calculated move to ensure some stability in the price of oil and keep Iran from more serious retaliation. As of Sunday, the countdown to Election Day has reached single digits (9 days). So far, in what's somewhat of a surprise to conspiracy theorists, there hasn't been any significant false flags or high level hijinks by either side outside of the dual assassination attempts against Donald Trump. For whatever it's worth, both parties have been fairly well behaved, though the cat-calling against Trump late this week - comparing him to Hitler, calling him a fascist - reeks of desperation on the left. Along with the presidential polling, the Senate appears to be heading toward a slim Republican margin, maybe 52-48, while the House is pretty much up in the air. The best result for all involved might be Trump in the White House, a Republican senate and a split House, forcing compromise all around and more focus on Executive Orders from the White House guiding policy.
The NASDAQ was the only major index to post a positive week, and it did so only marginally. Here's the rundown:
Dow: -1161.51 (-2.68%) Apple (AAPL), Alphabet (GOOG), Amazon.com (AMZN), Meta Platforms (META), and Microsoft (MSFT) all report third quarter earnings next week. These mega-caps have a combined market value of more than $12 trillion, about one-quarter of the S&P 500's entire $48.6 trillion valuation. Along with election anxiety and global tensions, those corporate reports will drive equity markets, especially the NASDAQ and S&P. Here are the major earnings announcements for the week ahead: Monday: (after close) Ford (F), Waste Management (WM). Tuesday: (before open) McDonald's (MCD), Sofi (SOFI), PayPal (PYPL), JetBlue (JBLU), Pfizer (PFE), British Petroleum (BP), Royal Caribbean (RCL); (after close) Alphabet (GOOG), Reddit (RDDT), Visa (V), Chipolte Mexican Grill (CMG), Chubb (CB), Snap (SNAP), AMD (AMD). Wednesday: (before open) Eli Lilly (LLY) ADP (ADP), Hamana (HUM), Caterpillar (CAT); (after close) Etsy (ETSY), Carvana (CVNA), Starbucks (SBUX), Coinbase (COIN), Meta Platforms (META), Microsoft (MSFT), Roku (ROKU). Thursday: (before open) Merck (MRK), Conoco Phillips (COP), Altria (MO), Estee Lauder (EL), Uber (UBER), Mastercard (MA), Peloton (PTON); (after close) Apple (AAPL), Amazon (AMZN), Intel (INTC). Friday: (before open) Wayfair ((W), Charter Communications (CHTR), Fubo (FUBO), ExxonMobil (XOM), Chevron (CVX).
Bond vigilantes were out in force this week, selling everything with duration long than three months, especially at the long end of the yield curve, with yield on the 10-year note gaining 17 basis points and the 30 year up 13, both at the highest levels since July. Spreads reflected the movement toward normalization. 2s-10s were fairly static at +14, while the full spectrum from 30 days out to 30 years was squeezed from -54 to -38, well above levels seen a year ago (10/20/2023: -47; 10/27/2023: -54). Here's the oddity of the situation: 6-month yields are the same as those on the 30-year bond. Obviously, that can't continue, and won't. Yield on the short end is headed lower, by as much as one percent or more over the next six months while the long end stabilizes at slightly higher rates than currently showing. The Fed is probably looking to lower the federal funds rate down to around 2.50-3.00%, or roughly 200 basis points from current levels, which would give relief to short-term borrowers (individuals and small business) while satiating the yield seekers at the longer durations. The entire exercise should take roughly eight more FOMC meetings, so that by this time next year the U.S. economy will be going gangbusters with inflation still a problem, but maybe not as damaging an entity as in 2022 and 2023. The FOMC meets after the election, on November 6 and 7, with the rate policy announcement on the 7th. Election results may still not be settled in a few states, leaving the Fed in a condition of uncertainty. However, as a group, the voting members of the committee that sets the federal funds rate appear to be unwavering toward normalization, so dropping the rate to 4.25-4.50% in November and 4.00-4.25% in December would go a long way towards that end. Back-of-the envelope calculus sees 30-day bills around 4.15%, 2-year notes at 4.25-4.35%, 10-year notes at 4.40-4.50% and the 30-year bond, the bedrock of the reserve currency, at 4.50 to 4.70%, closing off the inversion of the yield curve before whoever is inaugurated on January 20 takes the oath of office. Spreads:
2s-10s
Full Spectrum (30-days - 30-years)
As tensions in the Middle East escalated once again, WTI crude oil prices bounced higher. $$71.69 was the final price on Friday, October 25 after finishing at $68.84 on Friday, October 18, in New York. Oil seems to rise and fall on what's occurring in the Middle East, so the price on Friday isn't likely to change much this coming Monday, after Israel retaliated against Iran, but appears to have spared energy facilities. The cat-and-mouse games will likely continue right up until the elections in the U.S. and probably beyond. A change in U.S. leadership (Trump) might prove to tamp down tensions, but the tinderbox that is the Middle East is far from settled in any manner, whoever sits in the Oval Office. There's little doubt that both presidential candidates and nearly everybody in congress supports Israel, though their actions have raised questions about America's continued role in the region. Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump at $3.11 a gallon, a drop of four cents from last week. California continues to lead pricing, at $4.55 a gallon. In Pennsylvania, prices were static, at $3.34, with the Keystone State remaining the price leader in the Northeast, though close to the lowest level in 18 months. New York remained subdued, at $3.17. Connecticut ($3.06) and Massachusetts ($3.03) were lower, while Maryland prices fell another three cents, to $3.13 per gallon. Prices in the Midwest continue to decline, with Illinois - just above $4.00 two months ago - down another nine cents this week, to $3.28 Sunday morning. Fuel prices in Texas are now the lowest in the nation ($2.60), while Mississippi, at $2.65, and Oklahoma, at $2.66, rank second and third-lowest. South Carolina ($2.75) is followed closely by Alabama, Kentucky, and Arkansas (all $2.76), and Tennessee ($2.77). Georgia and North Carolina are both at $2.90. Though prices are well off summer highs, Florida ($3.14) remains the outsider, above $3.00 in the South. Sub-$3.00 gas can now be found in at least 23 U.S. states, mostly in the Southeast and Midwest, but now including New Jersey, New Mexico, Wisconsin, Iowa, Rhode Island, New Hampshire, and Ohio. Arizona, at $3.24, remained below $4.00 for a 25th straight week, down another nickel, leaving only California and Washington ($4.03) above the $4.00 mark. Oregon is at $3.61 and Nevada at $3.77, both lower for the week. Utah ($3.35) and Idaho ($3.33) remain well off summer highs and were both lower.
This week: $67,351.77 Bitcoin backed down from last week's high, though only by just more than $1,000. Bitcoin and other cryptos have benefitted from both presidential candidates making positive statements about the crypto-verse and global flash-points. Bitcoin remains atop the asset leaderboard, up 52.33% year-to-date.
Gold:Silver Ratio: 81.30; last week: 80.67 Per COMEX continuous contracts:
Gold price 9/27: $2,680.80
Silver price 9/27: $31.92 Gold and silver held onto gains for the most part. Silver was quoted at a high of $35.07 on Tuesday (Oct. 22). Gold topped out at $2771.20 on Wednesday (Oct. 23). There's little doubt about where precious metals prices are headed. Escalation in the Middle East over the weekend and BRICS' teasing the idea of a precious metals exchange should make for interesting developments on the COMEX on Monday and through the week. As far as silver is concerned, it continues to outpace gold on a year-to-date basis, up 41.04%, compared to $32.85. It is likely to continue to do so for the remaining two months of 2024 and into 2025 as it inexorably rises to record levels above $50. With middle-class and lower level stackers all but priced out of gold for now, silver remains a viable alternative and shortages may begin to reflect the reality of above-ground supply and diminished mining the past few years. Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):
The Single Ounce Silver Market Price Benchmark (SOSMPB) was substantially higher this week, at $42.13, a gain of $1.01 from the October 20 price of $41.12 per troy ounce. Premia on silver and gold continue to reflect sufficient demand amid higher prices in international markets. The most in-demand gold coins are American Gold Eagles (AGE) and American Buffaloes with prices for either well above $2,850. Silver bars drove the average and median one ounce price of silver well beyond anything seen in 12 years.
A confluence of events on the geo-political landscape will drive market action in the final week before the U.S. elections. With Ukraine on the brink of surrender to Russia, Middle East tensions reaching the boiling point, earnings releases by mega-tech names and ear-piercing election rhetoric should make for a wild ride to close out October. Just one last thing: Any bloviation from either shrill Donna Brazile or RINO-turned-Democrat shill Chris Christie should be summarily dismissed as pure filth. They are the absolute worst liars and propagandists in the media jungle.
For the Week:
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