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Weekly Survey of Gold and Silver Prices

Single Ounce Silver Market Price Benchmark

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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Sobering Look at Markets as Fed's Powell Shocks; Oil's Bear Market; China's Downturn

Friday, November 10, 2023, 8:20 am ET

It's Friday. Time to take an assessment of where markets have been and where they might be headed.

For stocks, the week began on high, winning notes, but after Thursday's glance at reality, stocks appear to be weakening, or at least in the throes of some serious profit-taking. That would be normal and natural.

Through Thursday's close, the Dow Industrials are trending lower, down 1/2 percent on the week, down 169 points. NASDAQ has managed a small gain of 43 points, while the S&P joins the Dow in the red, down 11 points (0.25%). Showing that the weakness has been widespread, the NYSE Composite is down 240 points, just over 1.50%, and the Dow Transportation Average has outdone them all, down 246 points, or 1.70.

What started out as a very positive set-up for equities turned sour on Thursday, largely due to the influence of Fed Chairman, Jerome Powell, who made no bones that the Fed may not indeed be through raising rates to check inflation. While it may be beyond the pale to take the words of one man with such seriousness that it changes investment outlooks on a wholesale basis, it is what the stock market has become: sound bites and headlines fed to algorithms which respond with intensity.

Thursday's sudden shift of sentiment has put the entire market under scrutiny, bringing into play the possibility that the rapid gains from the prior week may turn out to be nothing more than momentum-chasing noise.

As has been pointed out through most of the week, the bigger story is in oil, which settled out Thursday in New York at $75.74 and is now officially in a bear market, down more than 20% from late September's intra-day high of $95.03. The severity of the decline is made against a backdrop of a variety of potential disruptions, especially in the Middle East, where Israel continues to pound away at the Gaza Strip, and the United States keeps rattling its sabres at Iran. Additionally, US, EU, and UK sanctions remain in force, though they've proven to be less than effective against both Iran and Russia, the pair continuing to sell to clients around the world, largely to China, India, Brazil, and other BRICS-allied nations.

Disregarding sanctions, oil prices appear to have returned to the mean. $70-75 per barrel seems to be the sweet spot where producers (even shale drillers) are profitable and consumers and the general economies aren't harmed. This delicate balance is being achieved amidst unhealthy levels of rancor and antagonism, a credit to the major producers, Russia, Iran, and the Saudis.

So far this week, gold is down nearly $50 this week, dropping from just below $2,000 to around $1,952 as it is being battered again early this AM. Silver is also taking its share of abuse, down to $22.55 after starting the week at $23.33. It's the same old central bank suppression story. If you're not used to it by now, you simply haven't been around long enough. Eventually, all true believers end up disgusted, but still manage to find enough loose cash around to buy up a few more bars or coins, hedging their way towards doomsday, which seems never to come, but will eventually. It's an odd relationship. Everybody wants the price to go up, but nobody seems to mind much when it goes down, seeing the continued, comical efforts by the powers that be as more buying opportunities.

With the gold:silver ratio nearing extremes, currently registering a reading of 86.60, silver remains the buy of the century.

Overnight, Japan's NIKKEI was down nearly 400 points, but closed with a loss of just 78. The Hang Seng wasn't so lucky, dropping 308 points, remaining deep in the red on a long-term basis. The pre-pandemic highs of February, 2019, above 30,000 cast long shadows on the current level, just above 17,000. China's economy has cracked for sure. It remains to be seen just how wide the crevice will become.

Being the world's largest manufacturer (don't kid yourselves, America), China's demise is likely to have extremely long reach to the rest of the world and explains, in part, the inability of the oil price to remain elevated. It's probably for the best. The world could use a spate of disinflation, if not outright deflation. It could also use fewer politicians, fairer elections, lower taxes, fewer regulations, less surveillance, and peace. Maybe some of it will come to pass. Best to ignore most of it, most of the time.

Europe seems to have sobered up from the party mood this morning, with major indices shedding across the board. The CAC and DAX are holding onto smallish gains for the week. The FTSE appears doomed, already shouldering losses, but the day, and the week, aren't yet over. US stock futures are mixed, with the Dow up, NASDAQ down, S&P flat. Ho, hum.

Treasury yields are a little jumpy. The 10-year ramped rapidly, up 10 basis points, on Powell's utterances Thursday. Amazing how such supposed stable, near-riskless vehicles can react like frightened schoolgirls antagonized by a mouse. Faith in institutions is overrated.

Another week flies by and you're still standing. That's not bad.

At the Close, Thursday, November 9, 2023:
Dow: 33,891.94, -220.33 (-0.65%)
NASDAQ: 13,521.45, -128.97 (-0.94%)
S&P 500: 4,347.35, -35.43 (-0.81%)
NYSE Composite: 15,235.18, -117.01 (-0.76%)


S&P, NASDAQ on Record Winning Streaks; Bitcoin Soars; Gold, Silver, Cash For the Win (FTW)

Thursday, November 9, 2023, 9:17 am ET

Seriously, is this consecutive days winning streak stuff for real? It's almost as if Randolph and Mortimer Duke, from the 1983 film "Trading Places" (highly recommended; Eddie Murphy at his best), were making side bets on whether or not the NASDAQ or S&P would close the session green or red.

The past few days, in which the streaks were continued - nine straight for NASDAQ; eight for S&P - by narrow margins were almost comical. The S&P had gains of seven, 12, and four points the first three days of the week, while the NASDAQ was more sporting, tacking on 40, 121, and 10 points over the same span. Forget about the Dow, it closed lower on Wednesday, ending its own winning streak at seven straight.

In case you're amused by this kind of hunting and pecking, perhaps Bitcoin is in your wheelhouse. The vaporware crypto king has been on fire of late, this morning up more than $1,000, to $36,737.20, an 18-month high, the chart, for all intents, looking very much like it is going to accelerate well past the dual peaks of March and November, 2021, when the price of a single bit, or satoshi, exceeded $60,000. Since all things are wonderful and magnificent in Wall Street's closed loop system, from here, a double in short order is a certainty, right?

Somehow, between Joe Brandon's bribe-taking, congressional posing and grifting, Sam Bankman-Fried's failed Ponzi scheme, and the collapse and bankruptcy of WeWork, bitcoin investing seems to be a natural fit. It has all the elements of the classic con: the mysterious figure of Satoshi, a nifty white paper, mining, halving, volatility, and technology. It is a speculator's dream, especially being tied by price to the rapidly deteriorating US dollar.

Anybody troubled by inflation can employ bitcoin or the thousands of other crypto alt-coins as a hedge against it. If the price of chicken goes up 20% but so does bitcoin, it's a wash.

Meanwhile, the Fed has been duteously shrinking the money supply for the past 18 months or so...

They are trying desperately to reduce the amount of money in circulation. If successful, the Fed will achieve not only inflation below their two percent target, but maybe even some disinflation or outright deflation, like in the 1930s Great Depression, which they engineered. Fewer dollars chasing the same amount of goods... what could go wrong?

Oddly enough, the one thing that stayed at low price levels during the 1930s was food. The opposite has occurred today. Food prices are so high people are changing their dietary habits. Should the Fed continue to fight inflation by keeping interest rates high (a cost to businesses and consumers) and diminishing the money supply, the end result is satisfaction of their dual mandate of full employment (#WINNING) and stable prices (#WINNING at higher levels).

In other words, people will find themselves working just to afford food and rent. Oh, we're already there! So, what to do? Buy stocks, of course, since they're on a winning streak, and buy bitcoin, because it's going to the moon (which is made of Swiss cheese, so doubleplusgood. With bitcoin, you can have your cheese and eat it, too.

Sadly, bitcoin isn't real. You cannot see it, feel it, touch it, smell it. If a bitcoin falls in a forest nobody hears it (except maybe Satoshi). Akin to Federal Reserve Notes, it is the worst kind of fiat currency. It's even tied to the US$. And, you need a cell phone or computer and a brokerage to buy it or spend it. Originally designed as private peer-to-peer currency without intermediaries, thanks to government and Wall Street bastardization, it's heavily regulated with a bounty of intermediaries and zero privacy. The blockchain, which ensures all transactions are recorded and valid, also ensures that every transaction can be tracked and hunted. Thanks, but, no thanks.

Like just about everything else emanating from Wall Street or Washington, DC, bitcoin is a scam. Meanwhile, real money, gold and silver, continue to be suppressed. After all, who would want a bar of gold? A standard gold bar of 400 troy ounces weighs 27.5 pounds. (Note: at $2000 a troy ounce, one bar of gold is worth $800,000, so, if you have one, you've made it!) Who's going to carry that around with them? And you can't spend it anywhere, even if you have 1/10th ounce coins. Silver is eminently more efficient as a means of exchange. It's base price of around $23 per troy ounce is much more reasonable than gold's, and it comes in a wide variety of denominations, from pre-1965 dimes to bars, rounds, and coins ranging from one ounce to 1000 troy ounces and everything in between.

Mind you, the 1000 ounce silver bar weighs in at a monstrous 62.5 pounds and is worth, at today's bargain basement prices, a mere $23,000. Some (certifiably crazy) folks like to keep a few laying around the house or on their windowsills, to lure in robbers who cannot run very fast when trying to flee with even one big silver bar. They become pretty easy to run down or wing with a shotgun or long arm. But, seriously, only crazy people think that way. Silver, by and large, or small, is where it's at. Like gold, it's shiny, people readily understand its value, but unlike gold, it comes in denominations small enough to buy groceries or gasoline, if you can find like-minded people to accept it.

What's amusing about silver is its relationship to gold, via the gold:silver ratio. Currently, the ratio is 86.28, which means you would need 86.28 ounces of silver to exchange for one ounce of gold, which is ludicrous, a prima facia fallacy. There is not 86 times the amount of silver in the world as compared to gold. When the USA was on a bimetallic standard, the ratio was pegged at 15:1. Fact of the matter is that for centuries, silver was the standard measure of value, not gold.

Simple logic implies that independent central bankers, such as the Bank of England and the US Federal Reserve, preferred gold over silver because of its relative scarcity. It was easier for them to horde it. Besides, no self-righteous central banker wanted millions of ordinary peons holding vast amounts of silver that could be used to pay wages and buy things. That's why, today, central banks hold gold and hold NO silver in their reserves.

Rambling on, then there's cash. Interestingly, when silver certificates and silver coins were removed from circulation during the period of 1961 to 1963, per President Kennedy's Executive order 11110, the Federal Reserve began issuing $1 and $2 denominations of Federal Reserve Notes. Anybody under the age of 50 today probably doesn't remember silver certificates or silver coins, but they were the standard until 1964, when the US mint ceased coining silver coins.

All of this leaves us with today's fiat standard of Federal Reserve Notes backed by debt, which is a bad idea. However, FRNs, or, what most Americans call "money" is actually just currency, but, it is quite useful and very much in demand. Federal Reserve Notes are accepted worldwide and come in a variety of denominations. They are also, unlike gold and silver, very light, weighing in at one gram. A $1 million stack of $100 bills weighs in at 10 kilograms, or just a shade over 22 pounds and is about three feet, four inches in height. That, friends, is very easily transported. Everybody should have a stack of $100s, even if it's not a million dollars high.

Thus, when stock market daily streaks are being touted as the best thing since sliced bread, it's useful to remember other measures of value. By most accounts, stocks are overvalued and they were overvalued even before the current "winning streaks" began.

Wrapping it up, if one has extra money or currency with which to "save" for rainy or otherwise unpleasant days, here's a suggestive breakdown of allocations:

Stocks and bonds (paper promises): 5%
Gold: 5%
Silver 50%
Cash (FRNs, stacks of $100 bills) and other things (cars, art, etc.): 40%
Crypto: 0%

... which really puts a new spin on the 60/40 portfolio. You should also own where you live (your home), free and clear, outside of property taxes, that is.

A few final notes are in order. If you're lucky enough to make a quick killing in the stock market, remember, the government wants some of your loot. Short-term capital gains (assets held for one year or less) are added to income and taxed at your ordinary income tax rate, or your tax bracket. Long-term capital gains (more than one year) are taxed at 0%, 10%, or 20%, depending on your income.

Crypto-currencies, like bitcoin, are also taxed as capital gains and the IRS requires you to disclose your activity, or, did you not see the checkboxes next to Digital Assets, which reads, At any time during 2022, did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, gift, or otherwise dispose of a digital asset (or a financial interest in a digital asset)? Yes or No.

The IRS doesn't ask about gold or silver, or even that stock of hundos behind your dresser. In fact, many states don't charge sales tax on gold or silver purchases, but some still do. It pays to know your state's position.

As usual, stock futures are streaking higher heading into the opening bell. Does anybody really care if the NASDAQ goes up 10 straight days? Really?

At the Close, Wednesday, November 8, 2023:
Dow: 34,112.27, -40.33 (-0.12%)
NASDAQ: 13,650.41, +10.56 (+0.08%)
S&P 500: 4,382.78, +4.40 (+0.10%)
NYSE Composite: 15,352.19, -36.29 (-0.24%)


Stocks Rally Longest in Two Years; Oil Continues Slump

Wednesday, November 8, 2023, 9:23 am ET

The Dow and S&P have been up for seven consecutive sessions. So what?

So what? The NASDAQ has put on gains for eight straight. For the S&P and NASDAQ, it's the longest winning streak in two years.

These are incredible winning streaks by any account, especially after the poor showings in August, September and October, which sent the major indices into near-term corrections.

From a purely technical viewpoint, the past two days of gains have been the least, in point and percentage terms, possibly indicating that these powerful rallies are nearing an end, and the buying has been mostly the work of retail participants, as opposed to institutions, which did most of the heavy lifting (and profiting) last week.

Let's face it. Smart money buys in at the beginning of rallies. Dumb money buys at or near the highs and then complains when thing go south. Buyers at this late stage have only themselves to blame for being late to the party. On the other hand, this could just be a pause ahead of a pullback, setting up higher highs in days and weeks to come. Could be. Maybe. Jury's still out.

What's interesting about the smashing rallies is that how many stocks that issued conservative or negative guidance are once again in the overvalued camp. Think Apple (AAPL) or Etsy (ETSY), for instance. Apple stock has been up seven of the last eight sessions, dating back to October 26. The only day it fell was the day it reported what was a so-so quarter along with a guidance warning, and it dropped less than a buck. Etsy bottomed out on November 1 at 60.66, after issuing a warning for the fourth quarter. As of Tuesday's close it was 64.84.

What are people buying? Essentially, the most-shorted stocks delivered the best results during the recent rally, suggesting that stocks are not being measured by profitability or other fundamental valuations, but strictly on price and momentum. If the entire market is going up, everybody gets to play along to some degree. It will be days and weeks from now when the tide goes out and find out - in Warren Buffet's terminology - who's been swimming naked.

Besides the stock market rally, the other, possibly bigger story is oil. WTI crude ripped lower again yesterday, losing more than $3.00, currently resting around $77.00. On October 19, a little more than two weeks ago, it was $88. Oil is suffering from oversupply due to slack demand, globally. People just aren't using enough of it to warrant higher prices. The world is slowing. And, while a lower price for energy is great for drivers, consumers and most businesses, it's not so good for producers or the ExxonMobils and Chevrons of the world.

High oil prices contribute to causing recessions. Lower prices are the result and symptomatic of recessions. Ergo, a recession has already begun or is soon to commence.

Minutes before the opening bell, futures are gliding higher. European indices are flat.

At the Close, Tuesday, November 7, 2023:
Dow: 34,152.60, +56.74 (+0.17%)
NASDAQ: 13,639.86, +121.08 (+0.90%)
S&P 500: 4,378.38, +12.40 (+0.28%)
NYSE Composite: 15,388.48, -52.01 (-0.34%)


Which Way Are We Going? Indications That Last Week's Rally May Have Been a One-Off Emerge; China, Gold, Silver, Oil Sinking

Tuesday, November 7, 2023, 9:05 am ET

Is the party over, or was last week's torrid rally just the first act of a longer show?

Judging by the tepid follow-through on Monday, it appears that nobody really knows. Following the best week for equities in a year's time, some pullback was expected, but market forces prevailed to keep the main indices positive throughout the session, other than a brief drop into negative numbers mid-afternoon.

While the gains on Monday were paltry, they were likely more noise than signal. There's a paucity of economic data this week, but a handful of Fed speakers will be making the rounds, including Chairman Powell, who speaks at the Division of Research and Statistics Centennial Conference, in Washington, D.C. on Wednesday, and will participate in a panel discussion Thursday, at the 24th Jacques Polak Annual Research Conference, also in the nation's capital.

At the press event following the rate "pause" this past Wednesday, Powell's tone was decidedly dovish, with many followers of Fed policy convinced that the FOMC's next move would be to cut rates as the economy is expected to weaken through the fourth quarter and into the start of the new year, though such a radical departure from current polices would only come after the Fed held rates steady for another four to six months, possibly longer.

Keeping the Fed, inflation, and the health of the wider economy in perspective will be key elements in investor decision-making heading into the heavily-hyped holiday season and year-end tax-related considerations.

Overnight, trading in Asian markets was all to the downside. Japan's NIKKEI gave back 2/3rds of the gains made in Monday's session, while in Hong Kong, the Hang Seng lost 1.65%, continuing its year-long slide since peaking above 22,000 in late January. The HSI currently is trading below 18,000 and is entrenched in a prolonged bear market dating back to mid-February, 2021, when it peaked above 30,000. Clearly, there are signs of worry over Japan's interest rate policies and China's general economy, especially the slumping real estate sector, where developers have missed loan payments, halted projects and dashed the hopes and dreams of the public.

China's woes have not disappeared, nor will they. While the PBOC continues to apply bandages to the festering wound, slippage from real estate has extended to other parts of the economy, affecting companies and consumers alike. With most of the world focusing on the geo-political conditions in Ukraine and the Middle East, the collapse of the world's second-largest economy is not getting the attention it deserves. Besides China's problems in the real estate sector, exports fell for a sixth consecutive month in October, indicating slack demand, especially in the Eurozone and North America.

The forces pushing China's weakening economy has a variety of elements, essentially speaking volumes about the health of Western economies enmeshed in wars and fighting inflation. It seems last week's rally in the US and Europe was biased heavily by concerted central bank actions, as the Bank of England, ECB, and the US Federal Reserve simultaneously paused interest rate hiking regimes. All participants wish for a "soft landing" but seem to have disregarded the larger picture of a potential global recession.

Along those same lines, European indices have cooled off since Friday, with markets modestly lower this morning. As usual, gold and silver are being punished for their audaciousness in making gains over the past month, but the real story is oil, with Brent and WTI crude reaching lows not seen since August. Even with the Saudis and Russians holding firm on production cuts, demand is simply not there, another sign of a slowing global economy.

As far as last week's rally offering anything more than a temporary high for stocks that had been keeling to the downside for three months, it just isn't there. Stocks made their gains despite weakness in underlying economies around the world. The Fed and their central bank cohorts, which were aiming for slowing economies to lower the rate of inflation, seem to have gotten their wishes granted.

Last week's meteoric rise appears to have been a one-off, nothing more than a bear market rally which are usually quite violent. If Wall Street continues to pin its hopes only on a future policy shift at the Fed while underscoring stock fundamentals and economic reality, they may find only lumps of coal in their stockings this Christmas.

With the opening bell approaching, stock futures are firming, but remain in the red. Ride provider, Uber (UBER), reported third quarter results which missed expectations on the top and bottom lines. Earnings per share were 10 cents versus 12 cents expected by LSEG, formerly known as Refinitiv, while revenue increased to $9.29 billion, but was still short the $9.52 billion expected.

On a positive note, homebuilder D.R. Horton (DHI), reporting for its fiscal fourth quarter ended September, fell 4.71% to $4.45 per share from a year earlier, but still topped analysts' average estimate of $3.93, as home sales remained high due to a supply shortage. Revenue jumped 8.96% to $10.50 billion in the quarter, also above analysts' average estimate of $10.01 billion.

After the closing bell Tuesday, Ebay (EBAY) is among a handful of less important companies reporting, but the action picks up Wednesday morning when Warner Brothers Discovery (WBD) reports prior to the open and Disney (DIS) comes forward after the close.

Wall Street is adept at shading reality and interpreting practically everything as stock market positive, but the charades cannot continue indefinitely. It's only a matter of time before fundamentals and valuations come to the forefront. That could be this week, next week, next month or next year. In the meantime, stocks may trade somewhat sideways, with a bias to the downside. 2023 has been a solid year for stocks, but sharp investors have been taking profits for some time. The final two months of the year may prove to be more about tax selling than the boost stocks got last week via a rush of buybacks.

Even with last week's huge upside jump, US major indices have managed to claw back only about half of losses sustained from August through October. The wall of worry continues to present fresh challenges.

At the Close, Monday, November 6, 2023:
Dow: 34,095.86, +34.54 (+0.10%)
NASDAQ: 13,518.78, +40.50 (+0.30%)
S&P 500: 4,365.98, +7.64 (+0.18%)
NYSE Composite: 15,440.50, -34.70 (-0.22%)


WEEKEND WRAP: Stocks Have Best Week in a Year; Bond Yields Slide; Gold, Silver on Hold, Oil Continues Lower

Sunday, November 5, 2023, 11:54 am ET

My, oh, my, how things change.

A week ago, stocks were in the doldrums, a short-term correction. On Wednesday's FOMC policy pause, Fed Chairman Jerome Powell might as well have just said, "correction? I got your correction right here," because his dovish comments were all stock pickers needed to send the major averages soaring.

Over in the bond pits, yields on long-dated maturities were slashed, globally. In recent weeks, the Bank of England, the Fed, and the ECB all paused rates. The hiking regime is over.

In case, by reading this commentary, you believe it overly cynical, keep looking back to January, 2022, and where stocks stood then. This remains a bear market. This week's pump priming was just another part of the plan, which is to churn, churn, churn, profit and repeat. Churn, baby, churn. While the public, the rubes, are told to stay in the market, the average length of a Wall Street holding is somewhere in the range of six seconds. Zero days to expiration options (0DTE) drive the market. The horses aren't pulling the wagon. The wagon is pushing the horses. Wag the dog.


Stocks

The week proved to be the best for stocks in over a year, the majors jumping the most since mid-October, 2022. It was no accident that stocks were down in August, September, and October this year. Insiders have been dumping shares fully intending to buy them back at lower prices, and this week, they did just that.

Not to worry, they'll be dumping them again once they've squeezed the bears until they're nearly breathless. Wash, rinse, repeat.

For technical analysts, its worth noting that while this week's gains (Dow, S&P, NYSE, NASDAQ higher five straight days) were marvelous, sending each of the indices back over their moving averages, only the Dow surpassed the previous near-term highs from mid-October, and that by only a few points. The indices still have a huge hill to climb, but tacking on daily gains gives the impression of wealth and prosperity with limited risk to the downside. Oh, that it could be so. It is obviously not, so, enjoy the feast for now, for tomorrow, the hunt begins again.

The upcoming week will be very light on data, but filled with Fed-speak as various Fed officials take Powell's dovish message on the road. With Veteran's Day (November 11) observed on Friday (November 10), bond markets will be closed, though equity markets will observe ordinary hours.

Earnings season also winds down. The following companies will report third quarter results:

Monday, November 6: Berkshire-Hathaway (BRK.B), Dish Network (DISH), Trip Advisor (TRIP), Goodyear Tire (GT).

Tuesday, November 7: Rivian (RIVN), AMC Entertainment (AMC), DR Horton (DHI), Gilead Sciences (GILD), Uber (UBER), eBay (EBAY), UBS (UBS).

Wednesday, November 8: Disney (DIS), Ralph Lauren (RL), MGM Resorts (MGM), Warner Bros. Discovery (WBD), Lyft (LYFT), Twilio (TWLO)

Thursday, November 9: Wynn Resorts (WYNN), News Corp. (NWSA), Petrobras (PBR), AstraZeneca (AZN), Novavax (NVAX).


Treasury Yield Curve Rates

Date 1 Mo 2 Mo 3 Mo 4 Mo 6 Mo 1 Yr
09/29/2023 5.55 5.60 5.55 5.61 5.53 5.46
10/06/2023 5.59 5.60 5.63 5.64 5.59 5.43
10/13/2023 5.60 5.58 5.62 5.62 5.57 5.41
10/20/2023 5.56 5.56 5.58 5.61 5.54 5.41
10/27/2023 5.57 5.57 5.59 5.60 5.55 5.39
11/03/2023 5.53 5.56 5.53 5.50 5.45 5.29

Date 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
09/29/2023 5.03 4.80 4.60 4.61 4.59 4.92 4.73
10/06/2023 5.08 4.87 4.75 4.79 4.78 5.13 4.95
10/13/2023 5.04 4.80 4.65 4.66 4.63 4.97 4.78
10/20/2023 5.07 4.93 4.86 4.93 4.93 5.27 5.09
10/27/2023 4.99 4.84 4.76 4.83 4.84 5.19 5.03
11/03/2023 4.83 4.62 4.49 4.55 4.57 4.93 4.77

Just in case anybody thinks these yield collapses weren't planned and globally coordinated by your friendly neighborhood central banks, try this, from Doug Noland's Credit Bubble Bulletin:

Italian 10-year yields sank 29 bps (to 4.51%), the largest decline since June (-32bps). UK 10-year gilt yields dropped 26 bps (4.29%) the biggest fall since March. Local-currency yields were down 83 bps in Columbia, 47 bps in Hungary, 40 bps in Peru, 37 bps in Mexico, 36 bps in South Africa, 35 bps in Indonesia, 30 bps in Poland, and 27 bps in South Korea. Dollar yields collapsed 76 bps in Colombia, 60 bps in Turkey, 40 bps in Mexico, 39 bps in Brazil, 39 bps in Peru, and 37 bps in Chile.

BTW: Noland's current weekly commentary is appropriately titled, "Back to Squeezeville."

The whole financial system is a rude construct. You're forced into investments offered by insiders, be they fixed income or risk assets (stocks). While you're making your pittance, the Wall Street cons are raking in millions, billions, on fees, advisories, recommendations, and then the government swoops in an collects its skim.

It's an enormous con. Play it right, and you can be a millionaire, as many baby boomers found out by just staying in the game. Get on the inside, billions can be made. In the end, you'd better have oodles of greenbacks, because the Fed will inflate your dollars away, or pump, dump, and pump as they've been doing forever and lately, with more frequency and intent. You may be comfortable, but the richest people on the planet are Wall Street sharps and Washington politicians.

The reduced size of the Us Treasury's quarterly refunding, the sheepish tones of Fed Chair Jerome Powell, and the benign 150,000 jobs in the October non-farm payroll report all contributed to bonds getting bid and yields coming down in a rapid rush to the upside.

Stocks weren't the only things making gains. Yields, moving the opposite direction of price in fixed income, were slaughtered. The 10-year note fell 27 basis points over the week, the 30-year, 26. Yield on the five-year note dropped 27 basis points, dis-inverted from the 10-year and is now the cheapest across the curve, at 4.49%.

Of short-duration, the biggest yield moves were each 10 basis points lower for the 4-month, 6-month, and 1-year. 1-month, 2-month, and 3-month yields were essentially unchanged.

Spreads blew out, as the tables below indicate, moving away from normalization in a big way. Such an abrupt change of direction would seem to indicate that this week might be a one-off and that higher rates will make their reappearance shortly. Just because shorts of all stripes got squeezed this week doesn't mean they will continue to be. The bulls took all the air out of the room this week. The obvious conclusion is that unless the Fed is prepared for 30-year bonds yielding six or seven percent, short term rates must come down, which would make sense beginning around April or May of 2024, with the big time election roughly six to eight months forward.

Yes, rate cuts will arrive, like the calvary, in the nick of time, canceling yet another non-recession recession, stimulating both the economy and political aspirations at once.

Spreads:
2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76


Oil/Gas

Oil continues to get the short stick, with WTI crude closing out Friday at $80.89, down hard from last week's $85.16, $88.30 the week before that, and $90.77 four weeks ago. Despite conditions in Gaza, the Middle East generally, and Ukraine, like salt in Frank Herbert's novel, "Dune", the oil must flow.

Unless and until there's a major escalation or expansion in either of the ongoing conflicts, expect people to continue dying for no good reason and the price of oil to remain stable or decline even more, the proximate causes being slack demand and the folly of US sanctions.

The US national average for a gallon of unleaded regular gasoline dropped again over the course of the week, from $3.51 two weeks ago, $3.46 last week, to $3.40, the lowest since July. Considering oil's global price descent and the latest increased efficiency in refining, expect prices at the pump to continue to move lower, possibly breaking through the $3.00 downside limit early next year (elections have consequences, and the price of gas has consequences for elections).

According to gasbuddy.com, Outside of Florida, the entire Southeast is now under $3.00, with the exception of Tennessee ($3.01) and North Carolina ($3.06). Texas leads the move lower, at $2.86, followed by Mississippi ($2.87) and Georgia ($2.88).

In California, the average fell another 14 cents to $5.15, down nearly a dollar from 5-6 weeks ago. The Golden State remains the only mainland state over $5.00. Prices eased elsewhere in the West, with Washington ($4.58) down another 10 cents. Nevada fell to $4.49, also down a dime. Oregon ($4.28) eased slightly, and Arizona ($3.85) got the most relief, down 17 cents, exiting the $4.00+ club, leaving just four states above that level.

In the Northeast, New York ($3.66) leads Pennsylvania ($3.65) by a penny. The lowest prices in the region can be found in Ohio ($3.14) and Kentucky ($3.06). Illinois ($3.50) remained in the top spot in the Midwest, with North Dakota dropping 13 cents ($3.40). Iowa and Missouri both check in at $3.10.


Bitcoin

This week: $35,080.20
Last week: $34,398.80
2 weeks ago: $29,955.20
6 months ago: $28,913.40
One year ago: $20,905.90

Bitcoin is limping higher, but, by most accounts, it should continue to gain as another "halving" is due up in 2024. Peons are instructed to keep trading crypto assets, report their activities to the IRS and pay taxes in preparation for the programmable CBDCs which governments continue to test in anticipation of a likely global launch.

When the government of whichever country you're encamped decides to release their own digital currencies upon the public, bitcoins, ethers, tethers and all the alt-coins and detritus will be declared either worthless, null and void, or against the law. Sun is shining. Make hay.

Precious Metals

Gold:Silver Ratio: 85.72; last week: 86.76

Per COMEX continuous contracts:

Gold price 10/06: $1,847.00
Gold price 10/13: $1,945.90
Gold price 10/20: $1,993.10
Gold price 10/27: $2,016.30
Gold price 10/03: $1,999.90

Silver price 10/06: $21.76
Silver price 10/13: $22.90
Silver price 10/20: $23.53
Silver price 10/27: $23.24
Silver price 10/03: $23.33

For now, judgment is suspended on the inevitability of gold and silver to return to status as immutable money. Arguably, with stocks and fixed-income both flying over the radar this week, gold and silver held their own, which they should not have. A possible delayed reaction could come this week, as the usual hammering down hasn't been featured lately.

As long as the criminal overlords at the Fed, ECB, ESF, World Bank, LBMA, and COMEX, et. al., want to suppress the prices of precious metals, it's a position that true believers will appreciate, adding to their stacks and hoards at what will, some day in the future, look like ridiculous bargains.

Precious metals are slow movers, but the slope is upwards over the long term. Anybody old enough to have begun buying in the 1990s can recall gold at $280 and silver at $5 the ounce. Look where we are today. There should be no discontent with prices up 400 percent and more. The reality is that the prices of precious metals haven't really changed much, the purchasing power of fiat currencies has collapsed and will continue to do so, so long as the preferred policies of the past 30 years remain in force.

Nothing beats hard assets that you hold personally.

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: 28.00 45.00 34.75 35.13
1 oz silver bar: 31.09 45.50 35.20 34.48
1 oz gold coin: 2,076.08 2,138.43 2,111.38 2,110.61
1 oz gold bar: 2,060.00 2,108.01 2,081.81 2,076.23

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell back to $34.89, a loss of 92 cents, from the October 29 price of $35.81 per troy ounce and exactly the same price as on October 22.


WEEKEND WRAP

The coming week might be a good time to take a break, watch, and wait to see what develops.

Congratulations to White Abarrio, Jockey Irad Ortiz, and trainer Richard Dutrow, winners of the Breeders' Cup Classic, Saturday at Santa Anita.

At the Close, Friday, November 3, 2023:
Dow: 34,061.32, +222.24 (+0.66%)
NASDAQ: 13,478.28, +184.09 (+1.38%)
S&P 500: 4,358.34, +40.56 (+0.94%)
NYSE Composite: 15,475.20, +142.59 (+0.93%)

For the Week:
Dow: +1643.73 (+5.07%)
NASDAQ: +835.27 (+6.61%)
S&P 500: +240.97 (+5.85%)
NYSE Composite: +799.42 (+5.45%)
Dow Transports: +956.69 (+7.06%)


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IdleGuy.com July 2024, Vol. 1 #6