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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 15, 2024, 9:04 am ET If the Trump-quake hasn't awakened you to the new reality that Trump's overwhelming victory in last week's election was a mandate for change, there's probably no hope for you, or, you are a member of congress, seeing power slip through your grimy fingers. Official Washington is scared to death of people like Matt Gaertz, Tulsi Gabbard, Elon Musk, and Vivek Ramaswamy running over their pathetic cabal of corruption and identity politics. Just over a week since the election results affirmed that most Americans think (Ok, this is a long sentence) 2020 was stolen, Drag Queen Story Hours are bad for their kids, the war in Ukraine is draining our resources and a complete waste of human life, Joe Biden was numb well before he was ejected from the 2024 elections, nobody likes Kamala Harris, Tim Walz is a very strange dude, government statistics are complete BS, mainstream news media is a propaganda arm of the Democrat party, climate change, prescription drugs, open borders, rampant crime, and transgenderism, in addition to a plethora of other ills, are all part of a narrative designed to deny Americans of life, liberty and the pursuit of happiness. Well, now that you're finally paying attention, listen up.
The government that has ruled over Americans for the better part of the last 50 years was built on corruption, collusion, lies, and filthy politicians who desired nothing more than to be re-elected, soak up campaign contributions, and grift their way to wealth. How does a congress-person get from middle class to multi-millionaire? Spend more than four For those people - and there are a lot of them - who sop up the usual tainted "news" coming out of Washington and state capitals like kitchen sponges, you're going to have to think for yourself for a change. Big sis government is not going to provide for your needs. You're better off going with the idea that the government either could care less about you than a pile of dog poo on the sidewalk or that they would prefer you dead (but still capable of voting for them). Trump's win signals a massive shift change in America and the world. We're not going to bomb countries that don't agree with our policies. America is not going to harp on the rights of LGBTQ++? people, or Blacks, or Hispanics or any other fringe group that the deep state believes should be better represented. It's going to be OK to be white, carry a gun, laugh at stupid ideas, refuse to wear masks, refuse to take vaccines, tell bureaucrats they work for you, and engage in assorted other behaviors that were wrung out of basically good people over time. Along with the political crooks in Washington, there's the equally evil and corrupt banking and financial system we lovingly call "Wall Street", where more white collar crimes are committed every day than in probably the rest of the country. Anybody who's read a few quarterly reports of publicly-listed corporations realizes that most of the non-recurring, adjusted, non-adjusted, non-GAAP, smoothed, unaudited, unrealized earnings reports contain some of the best fiction writing in generations. Many corporations are less than candid about their far-flung operations, especially when it comes to employment of illegals, offshore activities, EBITDA (a biggie), executive compensation, stock repurchasing, and an assortment of other nifty accounting features that make CPA's heads spin. Executives at major corporations make in a single year what average Americans hope to make in 10 or 20 or more. CEOs in particular are overpaid to the point of stupidity. Who in their right mind would invest in a company that loses money or just scrapes by while the top executives take home millions? Likely not many, but money invested in these companies is done not by individuals, but by insiders, brokers, managers, and a host of subordinates who make their living off your dime. Wall Street, probably even more so than the Federal Reserve or "official" Washington, is a den of thieves that exists for a variety of purposes, but mainly, to skim money off other people's hard earned savings, just like income tax is nothing more than a "skim game" fattening the coffers of the government, from which the senators and chosen representatives can feed. Americans have been lied to, cajoled, ridiculed, and persecuted, especially those who veer away from the accepted narrative or dare to criticize it. Those with enough money and will power, like Trump, Musk, Ramaswamy, Tucker Carlson, and even Alex Jones, finally are going to get their due from the corrupt, sinister politicians and money-whores that have ruled over Americans for decades. There's going to be a fight. It's going to get ugly, starting with confirmation hearings and senators from both sides resisting the change that the American people insisted upon by electing Trump FOR A THIRD TIME. Make no mistake, 2020 was a complete fruad, Americans have paid a dear price, and now it's time to right the ship of state, eliminating the wicked, the wretched, the unlawful, the dishonest in our midst. When Trump spoke of "the enemy within" he wasn't just blowing smoke. There's been a culture in Washington that has seen itself as unaccountable and above everybody else and the law. Chuck Schumer, Nancy Pelosi, and Adam Schiff are the more obvious ones, but they have legions of followers, many of whom won re-election just days ago. As for Schiff, probably the most corrupt and malevolent figure in Washington, he got a promotion from the House to the Senate, where he will continue to disrupt, steal, and confound the new administration for the next six years. Thankfully, he's in the minority, but that's not going to stop him from trying to thwart the progress of the Trump administration at every turn. Plus, he's not alone, and there are already Republicans who will side with him on many issues. This is going to be a titanic fight for the soul of America and patriots need to remain vigilant and not rest until the job of dispelling the rot in our system is complete. Getting back to finance and economics, a stock market crash may occur at any moment, or not. There has been an incredible melt-up in stocks since November 5, but that seems to be on the wane. As Money Daily has been pointing out over the past year, stock market gains have been largely a pump-and-dump and re-pump scheme by the big money managers at Vanguard, BlackRock, BofA, JP Morgan and elsewhere. Look no further than bitcoin to see the level of slushiness pervading through the system. Bitcoin's purpose is to divert funds away from gold and silver, and over the past ten days, it's performed spectacularly, rising over the moon as precious metal prices have been decimated. It's unlikely to last, if only because the riggers boosting bitcoin are concentrated and greedy. They want their profits and they want it in dollars, not bitcoins of Satoshis, so they will sell when time suits them best. For Friday, which is a huge options expiration day (3rd Friday of the month), stocks are looking a bit tired, with equity futures all trending negative. Dow and NASDAQ futures are both down around 150 points, while the S&P is shedding 28 or so, after lopping off 36 points on Thursday. Stocks are prepared to end the week on a down-note. As of Thursday's closing bell, the Dow was down 238 points for the week, NASDAQ was off 179, and the S&P had shed 46. Of note on the earnings front, Applied Materials (AMAT) beat estimates on both top and bottom lines, reporting $7.05 billion in revenue for the quarter ended October 2024, representing a year-over-year increase of 4.8%. EPS of $2.32 for the same period was up from $2.12 a year ago, but the company's shares were being brutalized, down eight percent or more, as it offered uncertain guidance for 2025. Alibaba (BABA) is up two percent pre-market, fueled by beating revenue and EPS estimates. Cereal-maker ost Holdings (POST) also beat, with the stock up a little more than one percent prior to the opening bell. Bonds eased a bit on Thursday, though the two-year note rose back up to 4.34%, with the 10-year yield at 4.43%, squeezing the spread down to +9 entering Friday's trading. What was thought to be an important emotional support for gold at $2,600 turned out not to be so, with the real money down to $2,548 early Thursday. It has since rallied to $2,575, but, like silver, remains under pressure. Silver broke through magical support at $30, but fell only as low as $29.87, and only briefly on the COMEX. It too rallied through Thursday and overnight, now standing around $30.70 per troy ounce. WTI crude, as predicted by Money Daily, was clobbered on Thursday, dropping from just over $69/barrel to a low of $67.32 and currently trending around $68. Crude oil, of which there is a considerable glut currently, can only go lower based on supply-demand metrics. The entire world is slowing, especially China and Europe, and it's just a matter of time and futures contracts unwinding before the price tumbles in a significant manner. By Spring of 2025, the price of WTI crude could be approaching $50/barrel with gas prices in the U.S. falling closer to $2.35-2.60. Currently, gasbuddy.com calls the national average at $3.08, though more than half the states are below $3.00/gallon. One last thing to keep in mind as the week closes, the mainstream media, possibly now even more opposed to a Trump presidency than prior to his victory, continues to peddle the fiction that Trump's spending will increase the national debt and produce outsized deficits. Nothing that has been proposed by the incoming team has suggested increased government spending. In fact, most of the people being appointed to cabinet positions are fiscal conservatives. There will be an enormous battle with congress over spending and actual spending cuts, department-level cost reductions, and possibly wholesale destruction of departments, such as the useless Department of Education, which, in its current form is a considerable drag on both the economy and the intelligence of the nation's students. Trump is a very big fan of the 10th amendment and state's rights. His plan is to reduce the size of the federal government and give power back to individual states. A general rule of thumb is that "red" states will fare better under these policies, being fiscally more responsible than the blue team. Market opens in half an hour. See you Sunday for the WEEKEND WRAP.
At the Close, Thursday, November 14, 2024:
Thursday, November 14, 2024, 9:25 am ET Wednesday saw a bit of a pause in the Trump rally, with the NASDAQ lower, the Dow and S&P marginally higher. Bitcoin continues to impress, breaking above $90,000 and as high as $92,900. With the dollar strengthening, it appears there's sufficient liquidity for speculation in all areas other than precious metals, oil, and various commodities, which have responded in the usual fashion to the dollar's gains. In particular, gold, this morning, hit a low of $2,541, down 9.25% from its October 30 peak of $2,800 on the COMEX. Silver has been punished to an even greater degree, bottoming at $29.76 earlier this morning, a drop of 15% from its recent high of $35/ounce (October 23). WTI crude oil, the price of which had been declining throughout the summer, hitting a peak near $84/barrel on July 3rd, fell below $67 on Wednesday, but has been rallying off that low, currently edging above $69. Declining energy prices were the one big item keeping the past three month's CPI figures from exploding to the upside, putting the lie to the Fed's unorthodox interest rate declines in September (50 basis points) and just last week (25 basis points). Stripping out food and energy, core CPI, as expressed in Wednesday's report from the BLS, has been inching steadily higher, though not enough to cause alarm, especially in the minds of the great thinkers at the Federal Reserve. This morning's October Producer Price Index (PPI) was up 0.2 percent in October, and up 2.4% on an annualized basis. For the 12 months ended in October, prices for final demand less foods, energy, and trade services (core) rose 3.5 percent. These numbers should cause some worry about the Fed's policy decisions. If the public is to believe they're serious about fighting inflation, they should not be lowering rates and the gains should not be positive numbers, no matter how minuscule. There is a need for disinflation, to bring prices back down to more reasonable levels. The Fed risks its reputation by issuing policies that are counter-intuitive, but seems not to care. Wall Street, for its part, had been pounding the table for lower federal funds rate for the past two years, believing that lower interest rates would allow companies to borrow more cheaply to fund stock buybacks, helping the equity markets to even more extreme valuations. They seem to have gotten their wish, but at what cost? Another dose of inflation or even prolonged above-target (2%) readings month after month are not helpful to the general economy in any way. The Fed has erred by lowering rates when stocks are at all-time highs, unemployment at historic lows, but consumers are tapped out due to higher prices for essentials: food, energy, housing. This morning's PPI release was hardly noticed and didn't move the needle on equity futures to any great degree. While NASDAQ futures remain just below unchanged, Dow futures have ticked higher after Disney (DIS) reported strong results for the third quarter (the company's fiscal fourth quarter). Disney posted adjusted earnings of $1.14 a share on revenue of $22.6 billion, both slightly better than estimates. Shares of the entertainment company were up 10% in pre-market activity, boosting Dow futures. Bond vigilantes have taken notice of the government data and the Fed's apparent policy miscue. Yield on the 10-year note is closing in on 4.50%, with the 30-year yield at 4.63% as of Wednesday afternoon. The entire yield curve ranges from a low yield of 4.25% (3-year note) to 4.73% (20-year bond), the entire spread less than half a percent (0.48%), essentially flat, which should be of great concern to bank stocks and financials which generally make their money on the spread. With little to no spread, bankings' main function of borrowing on the cheap and loaning out at higher rates is a nullity that should be expressed in lower profits, though the rally of the past week has seen financials trending higher. With nobody seemingly concerned about anything other than the political landscape in Washington, D.C., the intuitive reflex is that something is about to break, and, in a big way. Stock valuations are beyond elevated, at extremes. The Shiller PE has remained above 38 times earnings for the past few days, the third highest level ever. According to Herb Stein (August 27, 1916 September 8, 1999), who coined "Stein's Law" in 1986, "If something cannot go on forever, it will stop." By all appearances, markets are not heeding the many octagonal red STOP signs flashing before them, careening through intersections, ultimately heading towards a crash.
At the Close, Wednesday, November 13, 2024:
Wednesday, November 13, 2024, 9:11 am ET On Tuesday, President-Elect Trump announced the creation of the Department of Government Efficiency (DOGE), to be headed by Elon Musk and Vivek Ramaswamy. The two will be tasked with cutting government waste and eliminating needless expenditures and unconstitutional regulations that have become a overwhelming burden on American businesses, among other things. Ramaswamy, an entrepreneur with a Bachelors' degree in biology from Harvard University and a Yale law degree, had, during the primary campaign in 2023, proposed eliminating half of the government workforce by simply designating all employees with Social Security numbers that ended in an odd number be fired. He went further, suggesting the federal government could operate just fine with a quarter of the workers, eliminating half of those remaining by similar means, thus cutting the number of government employees by 75%. While Ramaswamy's approach may be more akin to using a sledgehammer to swat a fly, it would be an effective way to avoid needless lawsuits and howls of unfairness from the government labor unions, as mass layoffs are not actionable events under government labor standards. Very roughly speaking, if Vivek and Elon are capable of firing half of the government workforce, or about 1,500,000 bureaucrats who essentially either do nothing or make life more difficult for the American public they're supposed to be "serving," the annual savings would amount to about $120 billion, using $80,000 as an average salary.
A drop in the bucket, you say. Well, that may be so, but, that number does not include the additional costs of all the perks, including healthcare, lavish retirement packages, and the costs associated with administering the pay and other bloated human relations costs. It also doesn't take into account the money saved on not having to supply them with computers, desks, office space, lighting, etc., all the things a bureaucrat needs to in terms of the economy, this department will at first produce a degree of deflation, especially in the housing markets around the District of Columbia and other locations where government employees work and live, but also will cut into business profits in those same areas. People without jobs tend to spend less and curtailing the spending of hundreds of thousands of employees who previously thought their jobs were sacrosanct will have a snowball effect. Without so much loose money from government largesse and lowering the prospects for high-wage government job availability will cut into housing and rent prices. There won't be buyers for the McMansions in Arlington, or Falls Church, and many of the government workers who were paying rent will be unable to afford their overpriced apartments. With any luck, the efforts of Vivek and Elon will produce a mini-depression in areas where government bureaucrats are concentrated and potentially spread even wider, as the knock-on effects of people losing high-paying, low-productivity jobs spreads across the country. This is not to say that a depression would be a good thing, or that people in bread lines is desirable, but, after decades of government jobs outpacing wage gains in the private sector, and nearly three consecutive years of high inflation (thanks, Joe and Kamala), some blowback and reordering of principles is a necessity that cannot wait. Lower prices, because businesses will either have to lower them or lose business altogether, will be a welcome change and long overdue. While the efforts of the Department of Government Efficiency will likely produce a reasonable degree of austerity, pain, and even a stock market swoon, it won't be immediate, but rather, the effect will be measured over the next two to five years as all the dead weight is removed from government, the deficit is reduced, laid off workers find new jobs, and a some balance is restored. The amount of pain incurred by those laid off or fired will be ameliorated by realistic severance packages and unemployment benefits. Mortgage defaults or inability to afford rent may be unavoidable for some, but most will survive. In the long run, the deflationary effects, which to some degree are actually desirable, will be substantially outweighed by the annual savings in the federal budget. A grateful American public will respond by paying whatever taxes they owe with a lot less griping and moaning, believing that the government may actually begin downsizing and working for the people rather than against them. Of course, getting rid of one-and-a-half million bureaucrats won't be the only effort undertaken by the dynamic duo of Musk and Ramaswamy. Waste, fraud, and abuse are rampant throughout government and DOGE will seek to trim as much of the fat from the federal budget as possible. There are enormous savings available in government contracts, especially in the military, as the annual defense budget has become unbearable. The longer term ramifications of trying to rein in government spending are vast and beneficial to sustaining our Republic. President=Elect Trump has given Elon and Vivek great latitude to complete their task. It's about time, and every American should support their efforts. Meanwhile, back at the money-changing markets, stocks took a bit of a nosedive on Tuesday, with the Dow suffering the worst of it, ending close to the lows of the day. The NASDAQ and S&P took some hits early in the day, but bounced back in the afternoon to close with marginal losses. CPI was expected to rise 0.2% from September, with the 12-month headline inflation rate ticking up to 2.6% from 2.4%. Core CPI was expected to rise 0.3%, leaving the 12-month core CPI inflation rate at 3.3%. The actual readings were spot on, in line with expectations. The all items index rose 2.6 percent for the 12 months ending October. The all items less food and energy (core) index rose 3.3 percent over the last 12 months. With stock futures already in the red leading up to the 8:30 am ET release, somehow, this managed to be sweet music to the ears of Wall Street hucksters, sending futures higher across the board and well into positive territory. It's somewhat of a conundrum, considering the CPI numbers, besides being barely believable, do not imply that the Fed will cut interest rates further at their December 17-18 FOMC meeting. October CPI, however, did manage to match expectations, which is likely all that matters to the investment whores. As anyone with eyes that see and ears that hear can attest, Wall Street will distort any news to suit their purposes, which is to make stocks more attractive, despite being at extreme valuations. Seriously, how high is up? Gold and silver appear to have bottomed, with gold bouncing off $2600 and heading higher and silver gaining from $30.35, reaching above $31/ounce overnight. WTI crude continues to tread water just below $70/barrel as OPEC+ lowered their demand forecast for a third straight month. Jerome Powell and his pals at the Federal Reserve shouldn't fret much about inflation now that Donald J. Trump will soon be back in the White House directing national policy. His creation of the Department of Government Efficiency and appointment of two businessmen to lead it should manage to wring out any inflationary trends left over from previous administrations and offset any ideas congress may have about funding the government going forward. The battle will be with congress over budget items, as the regime of unaccountability appears to be waning. The government cannot continue running deficits in the trillions of dollars. It's time for more fiscal responsibility, something the Fed might welcome, as it seems to have run into a rut in its effort to tame the inflation monster. Besides, the Fed is now working in the opposite direction. If they truly wanted to keep inflation low or eliminate it altogether, they would be raising rates, not cutting them. PPI data is out at 8:30 am ET Thursday. Prepare for some bumping and grinding between monetary and fiscal factions at the federal level. By all appearances, the Federal Reserve is now bracing for a recession by cutting interest rates, leaving their anti-inflation policies behind. They see what Trump is up to and probably cannot stomach the idea of lower prices on food, energy, housing, and all manner of goods and services. That would be deflationary or at least dis-inflationary, and the Fed just can't have that. One more thing: When you see Donald Trump Jr. hawking gold for Birch Gold Group, does it make you wonder what the Trump administration actually thinks of the Federal Reserve and their money-printing regime?
At the Close, Tuesday, November 12, 2024:
Tuesday, November 12, 2024, 9:10 am ET Since late night November 5, when it became clear that Donald Trump was going to be the next president of the United States, markets have responded with enthusiasm over prospects of change and the kind of dynamism a new administration - one with a rational, common sense approach and reasonable people in charge - would bring to the country in the years ahead. Stocks have been the main beneficiary of the so-called "Trump Trade", with all the major indices at record highs. Including trading on November 5, 6, 7, 8, and 11, the Dow has gained 5.47%, the best performance of the big three, with the NASDAQ up 5.11% and the S&P 500 ahead by 4.28%. Those advances are dwarfed by the small cap Russell 2000, which is up a stunning 9.26%. Better than all of them is bitcoin, the grand-daddy of cryptocurrencies driving close to $90,000, at its peak of $89,504, up 17.90% in just those five days. Currently, as of 8:35 am ET, it has backed off a touch, to just above $86,000. Gains like these are abnormal, and thus, likely unsustainable. There will be consolidation at some point, and a pullback, but for now, the investor class is basking in the afterglow of Trump's trouncing of the woke ideology and all the Democrat nonsense that have plagued the country since Biden took office in January 2017. Throwing off the yoke of the woke won't be easy for the Trump team, though they appear to be on track to hit the ground running, as the President-Elect has been making bold policy statements on Elon Musk's X platform regularly and appointments to cabinet positions and department heads have been announced at a rapid pace designed to keep the opposition off balance during the transition period. On the other side of the coin are gold and silver, which have been victimized by the advance of the dollar, which has been - somewhat expectedly - on the rise since Trump's victory. Gold touched down this morning at a logical support of $2600 per ounce, along with silver, which appears to have hit rock bottom at $30.35. Gold is down 4.86%, silver, $5.29, since November 5, suggesting that this brief correction may have found support, though the next few days and weeks might tell a different story. For now, however, serious precious metals investors are enjoying a break from the advances that have been the story of 2024 and may be enthusiastic about "buying the dip." WTI and Brent crude oil prices have also been lower since Election Day, though only by two to three percent. There seems to be a nagging commitment to higher prices, even though anybody with skin in the game understands that demand is down in China, Europe, and North America, OPEC+ can't cut production fast enough, and continued drilling by U.S. interests will ultimately lead to WTI crude oil at around $50-55/barrel if not lower. It's too early in the new regime to tell what comes next, but presently, it seems that Wall Street has embraced the change from the ridiculous policies of the Biden-Harris administration in anticipation of better days ahead under a Trump presidency. It's about time.
At the Close, Monday, November 11, 2024:
Sunday, November 10, 2024, 11:40 am ET
There is one thing stronger than all the armies in the world, and that is an idea whose time has come. - Victor Hugo Donald Trump won the electoral college 312-226 as well as the popular vote. Republicans have established a majority in the Senate of 52-47 with only the race in Pennsylvania yet to be fully decided. Currently, Republican Bob McCormick leads incumbent Democrat Doug Casey Jr. by more than 39,000 votes with more than 95% of the votes tallied. The Associated Press (AP) called the race for McCormick on Thursday, explaining that though there were an estimated 91,000 votes still outstanding at that time, there were not enough in areas supporting Casey for him to make up the difference of roughly 30,000 votes. There are still 11 House races undecided, with Republicans having secured 216 to the Democrats' 208. Republicans are leading in at least four of the remaining races. They need only win two to secure the slimmest majority. Not to belabor the point, but Donald J. Trump won a resounding victory that will have enormous implications over not just the next four years, but well into the future. Trump won because he campaigned relentlessly, delivered a strong message that resonated with a wide swath of an angry and disillusioned American public, and was opposed by a weak candidate with a hollow message. Here's a short and incomplete list of some of the things Americans voted for:
...and voted against:
With more than two months before Donald Trump is inaugurated, there's much that can happen, but there's little the opposition can do to derail the firestorm of change that is forthcoming. Trump and his quickly-forming administration are wasting no time outlining their agenda. Perhaps the best news since the election is the formal announcement by the Trump transition team that Nikki Haley and Mike Pompeo were not invited to join the new administration. On Friday, a video of President-elect Donald J. Trump (boy, does that ever sound good!) outlining plans to bury the deep state forever went viral on X and over the rest of the internet. Here is Trump's ten point plan to dismantle the Deep State:
Here's the viral video:
The following from Russia's Sergey Glazyev is also poignant in a geo-political sense.
"The ostriches are running away, Pax Americana is ending. The Leo Strauss sect, which ruled the USA and planned to establish a world dictatorship of the chosen few, is losing the election. The US deep state has no choice either - a repeat of the falsification will lead to a civil war and the collapse of the country. Pragmatists who recognize the fact of the transition to a new world economic order are coming to power in the USA. Brzezinski's strategy of defeating Russia, destroying Iran and isolating China, as expected, only strengthened China, which has become a global leader. Together with India, it will form a new bipolar center of the new world economic system. The USA can integrate into it as another center of the world economy if it abandons imperialism and stops the global hybrid war. It is in the US national interest that Trump liberate the US from the ostrich [Straussian] sect that has saddled it. Bringing Washington's policies in line with the US national interest will entail poisoning Europe and the fall of the anti-human traitorous regimes in Germany and France. As we predicted, the world hybrid war, started by the US power-financial elite for world domination in 2001 with the attack of the US intelligence services on the Twin Towers in New York, will end next year with the universal recognition of its defeat and the completion of the transition to a new world economic order. The world will become poly-centric and poly-currency, the significance of national sovereignty and international law will be restored." Trump released another video Saturday outlining his approach to the media.
OK, just in case, here's Scott Jennings schooling a CNN panel that simply refuses to accept why Trump won:
Stocks There is no doubt that Wall Street was overjoyed at the election results, sending stocks to their best week since the beginning of the current rally, in the last week of October, 2023. Not much more needs to be said. Wall Street is firmly behind most of Trump's campaign policies. The day after the election, the FOMC cut another 1/4 percent off the federal funds rate, bringing it down to a range of 4.50-4.75%, though signaling that they are uncertain about reaching thier stated goal of two percent annual inflation. There are a few more companies reporting earnings this week, the flow has slowed to a trickle. Most influential will be Dow components Home Depot, Cisco, and Disney. Monday: (before open) Aramark (ARMK), Bridgestone (BRDCY); (after close) Live Nation (LYV), Vaalco Energy (EGY). Tuesday: (before open) Shopify (SHOP), Hertz (HTZ), Bitfarms (BITF), Home Depot (HD); (after close) Spotify (SPOT), Instacart (CART). Wednesday: (before open) Tower Semi (TSEM),; (after close) Cisco (CSCO), Beazer Homes (BZH), Helmerich and Payne (HP) Thursday: (before open) Disney (DIS), Advance Auto Parts (AAP), JD.COM (JD); (after close) Applied Materials (AMAT), Post Holdings (POST), Inovio (INO). Friday: (before open) Alibaba (BABA), Aim ImmunoTech (AIM).
The FOMC cut the federal funds rate by a quarter point on Wednesday, to 4.50-4.75%. Reaction in the treasury market was immediate, though somewhat perplexing. Rates pretty much came down across the board, most pronounced at either end of the yield curve, with the 30-year bond yield down 10 basis points from a week ago, and the 30-day yielding 0.05 lower (4.70%). The middle, or "belly" of the curve was more nuanced, with the 2-year rising by five basis points along with seven-year notes, the 10-year note dropping seven basis points, effectuating a seriously buff, i.e., flat, belly. Spreads shrank with 2s-10s down to a mere five basis points, and full spectrum out to -23. Expectations for 30-day yields to drop into a range of 4.55-4.60% and the 30-year bond to yield 4.60-4.70% would complete the dis-inversion (normalization) already well underway. One more rate cut in December of 25 basis points ought to do the trick and then the Fed may be close to being done with a very short-term cycle of cuts amounting to a mere one percent overall if they cut another 25 basis points in December. With Trump in office and largely in favor of lower interest rates, there may be more cuts forthcoming, though the Fed risks reigniting inflation. The next FOMC meeting is December 17-18, and the first of 2025 will be after Trump's inauguration, on January 28-29. Spreads:
2s-10s
Full Spectrum (30-days - 30-years)
WTI crude oil prices were fairly stable, hovering around $70/barrel, closing at $70.43 on Friday, up from $69.33 on November 1. Oil continues to react to what's occurring in the Middle East, which seems to be somewhat subdued, for now. With Donald Trump likely to revive calls to "drill, baby, drill", WTI crude could see prices in the low 60s within a short time. Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump at $3.05 a gallon, a further drop of two cents from last week. California continues to lead pricing, at $4.47 a gallon, down again from the prior week. In Pennsylvania, prices were slightly lower, at $3.28, with the Keystone State remaining the price leader in the Northeast, though nearing the lowest level in 18 months. New York is stable, at $3.14. Connecticut ($3.04) and Massachusetts ($3.01) also showed little change, along with Maryland, at $3.05 per gallon. Prices in the Midwest continue to decline, with Illinois - just above $4.00 a few months ago - down another eight cents this week, to $3.16 Sunday morning. Fuel prices in Oklahoma ($2.51) are by far the lowest in the nation, edging out Texas ($2.60), while Mississippi, at $2.65, ranks third-lowest. Florida ($3.10) remains the outsider, with all Southeastern states well below $3.00. Sub-$3.00 gas can now be found in at least 28 U.S. states, mostly in the Southeast and Midwest, but now spreading far and wide, to places like New Jersey, New Mexico, Wisconsin, Iowa, Rhode Island, New Hampshire, and Ohio. Arizona, at $3.18, remained below $4.00 for a 27th straight week, leaving only California above $4.00. Washington checked in at $3.99. Oregon is at $3.56 and Nevada at $3.75. Utah ($3.26) and Idaho ($3.25) were both lower on the week and remain well off summer highs.
This week: $79,690.52 Bitcoin has skyrocketed since the election, absorbing the rhetoric of Trump's campaign in the belief that he will remain a staunch supporter of crypto-currencies. It's likely to be more myth than truth, as the newly-minted president faces a three-headed monster of opposition in the Federal Reserve, the SEC, and the IRS. The Fed doesn't like competition with the dollar, the IRS wants to tax any gains in cryptos, and the SEC continues to classify bitcoin and other tokens as securities. All of this works to undermine the most appealing aspects of crypto: anonymity, ease of use, and as a store of value. If bitcoin is being considered some sort of alternative to the U.S. dollar, the latest assessment concerning Donald Trump makes little sense. Trump will be a leading voice for a stronger dollar, with enhanced purchasing power. It is his only choice and bitcoin will eventually be seen as a poor replacement and a novelty. Bitcoin does however remain atop the asset leaderboard, up a stunning 80.57% year-to-date. Talk about easy money! Beanie babies and tuplic mania come to mind. Bitcoin's success is based somewhat upon the mistaken belief that unicorns (which have never been proven to exist), excrete bitcoin.
Gold:Silver Ratio: 85.67; last week: 84.28 Per COMEX continuous contracts:
Gold price 10/11: $2,674.20
Silver price 10/11: $31.74 Following Trump's victory, both gold and silver trended lower on the assumptions that interest rates would decline (the Fed lowered the federal funds rate another 1/4 point on Thursday), global geo-political conditions would ease, and the U.S. economy would boom. The political conditions now prevailing following the U.S. elections aren't likely to be static, especially considering the charged mood in the nation's capital. Democrats and RINOs aren't just going to allow President Trump to get everything he wants, though many of his directives will be carried out via executive orders, which, while not binding as law, still carry significant weight in real use. Those directed at specific departments will face some oppositions, though, with new people replacing many of the deep-state holdouts, there will be significant changes ahead, mostly to the benefit of the American public. Silver is still outpacing gold on a year-to-date basis, but only slightly, silver up 31.32%, compared to 29.97% for gold. Silver stackers remain anxious over the fact that while gold has continued to set new highs throughout 2024, silver has lagged, still below $50, though that target may become more reachable in coming months. 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 modestly lower this week, at $40.34, a decline of 32 cents from the October 27 price of $40.66 per troy ounce. Premia on silver and gold continue to reflect sufficient demand, still bordering on manic levels. It is possible that honest money may find some new converts in the form of left-leaning defeatists seeking salvation. The most in-demand gold coins are American Gold Eagles (AGE) and American Buffaloes with prices for either remaining above $2,850. Silver bars were slightly more in demand than silver coins, continuing to support high prices for average and median one ounce finished silver, despite the week's decline. WEEKEND WRAP Congratulations to President Trump and the more than 74,706,124 people who voted for him.
At the Close, Friday, November 8, 2024:
For the Week:
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