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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.
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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Rough Day On Wall Street; NASDAQ In Correction; February Payrolls Stunning
Friday, March 5, 2021, 8:42 am ET
Stocks took a serious nosedive on Thursday when Fed Chairman, Jerome Powell, failed to address recent volatility and other issues at a noon speech to the Wall Street Jobs Summit, carried live over the internet.
While there was little indication that Powell was supposed to reassure markets at this juncture, from the tone of his remarks it appeared that the Fed Chairman was somewhat tone deaf to recent declines in stocks and a bond market rout that was producing runawway interest yield on the 10-year note.
As close as the Chairman got to offering reassurances was the following:
"I would be concerned by disorderly conditions in markets or persistent tightening in financial conditions that threatens the achievement of our goals."
If the Fed's goals are to heat up the pace of inflation (which has more or less been made official policy) and keep the stock market from imploding, he's not exactly batting 1.000. The various bond, stock and commodity market would be better served to not rely upon officials such as Powell or Treasury Secretary Janet Yellen for guidance as they've proven to be largely incompetent in both monetary and fiscal policy.
The key takeaways from Thursday's carnage were:
Unrelated, WTI crude oil shot up dramatically as the OPEC+Russia nations agreed to not boost production, putting pressure on prices worldwide. WTI closed above $64 on Thursday and continues higher ($65.39/barrel) in Friday's futures trading.
What comes next for markets is a double-edge sword with March non-farm payroll data due out at 8:30 am ET and the US Senate embarking upon weekend debate of the $1.9 trillion COVID stimulus bill which faces an uncertain fate.
Money Daily will stay with the narrative through the release of the payroll data in this posting, and will update on the Senate in Sunday's WEEKEND WRAP.
Boring deeper into Thursday's stock rout, the only saving grace for Wall Street was the sudden appearance of bids - likely the work of the PPT - right at the day's lows at 2:00 pm ET. The NASDAQ priced at 12,555, which would have been an 11% decline from the recent closing high had the number persisted to the session's end.
There may have been some dip-buying, but it was likely pretty thin and without spirit. With risk rising and the NASDAQ now having posted lower closes on nine of the past 13 sessions, it's doubtful that investors would be pouring money into anything that didn't offer the potential for outsized gains or at worst, price stability. Currently, there's little of either available.
After closing at an all-time high of 31,961.86 on February 24, the Dow Industrials have closed lower five of the past six sessions and are down a mere 3.25% as of Thursday's close. Similarly, the S&P 500 made a record close of 3,925.43 on the same day as the Dow and is only down four percent over the past six trading days.
What's dragged down the NASDAQ are high-flying tech stocks, which hasn't had much affect on the other indices. A four to six percent decline is surely nothing to worry veteran traders, particularly those with longer views of the market.
Getting past Friday's non-farm payroll numbers and through the passage of some kind of relief bill from congress will not be easy. With the Senate comprised of 50 senators from each side of the aisle, passing the stimulus bill intact in the form sent over by the House is unlikely, though Democrats appear intent on ramming the legislation though on a partisan basis with Vice President Kamala Harris casting the deciding vote and Biden sure to sign it.
Early next week may be somewhat rocky for markets, but while it's been only whispered, yield curve control (YCC) may be implemented by the Fed in short order, designed to keep longer-dated interest rates in line with the ultra-low short end of the treasury curve.
The 10-year and 30-year bonds have been noisy of late because of the threat of inflation. Food prices have risen for the past nine months with no signs that they're abating soon. The outwardly absurd price of crude oil is also fueling inflation by raising prices at the gas pump, a condition that can only slow any nascent recovery as the COVID crisis winds down and more states and municipalities begin the reopening process.
In less than two weeks, the FOMC assembles for a scheduled policy meeting on March 16 and 17. It is likely that, at the conclusion of that meeting, a statement designed to cool market conditions will be announced, returning markets to the preferred path of relentless gains. After all, there's an enormous amount of money being sloshed around by the Fed and Treasury, and when the public begins receiving $1400 checks, stocks are likely to be one of the main beneficiaries. The timing of a slight decline in the markets couldn't be better, ripe for retail speculation.
March's non-farm payroll was expected to show 200,000 new jobs versus a gain of 49,000 in January and the unemployment rate unchanged at 6.3%. When the BLS released the data at 8:30 am ET, everybody was stunned as payrolls increased by 379,000 in February and the unemployment rate fell to 6.2%.
Stock futures, already ramped higher in earlier activity, continued to climb, pointing to a positive open on Wall Street.
Enjoy the warmer weather. Check back on Sunday for updates in the WEEKEND WRAP.
At the Close, Thursday, March 4, 2021:
Thursday, March 4, 2021, 9:27 am ET
I rarely write in the first person personal, but today I am doing so because today is special.
Today, more than ever before, I feel confident about the economy and, more importantly, my understanding of where it is going, how it's going to effect people, and how specific markets are going to react.
For background, I've been a writer since I was five years old. I was actually publishing my own magazine when I was six. I've owned newspapers, and I've been publishing on the internet since 1999. I started writing about economics, finance and markets in 2003. I'm 67, so, I think I've got the credentials, finally, to offer reasonably good information (not advice) on stocks, bonds, real estate, financial markets, maybe even a little about cryptocurrencies, particularly Bitcoin. On that last point, I have to thank Max Keiser and Stacy Herbert of the Keiser Report most of all, but also Michael Saylor, CEO of Microstrategy.
Max Keiser and Stacy Herbert have been pounding the table on Bitcoin for over a decade. With Bitcoin at $50,000, I believe it's safe to say that they're right. Bitcoin is the future of money and the savior of wealth. Michael Saylor took the Bitcoin meme to a new level recently, investing his company's cash into it, to the tune of $4.45 billion.
But let's get to the heart of the matter. I'm looking at stock market futures and other indicators here at roughly 7:30 am ET, and I'm seeing what looks to be a continuation of the recent sell-off in tech stocks, now spilling over into mainstream stocks. Futures were down a bunch just a few minutes ago, but they're quickly heading toward positive territory. As I write, S&P futures are down 8.50, Dow futures off 34, NASDAQ futures off 31. No big deal, right?
Wrong. Big Deal. This market is diving headlong into a correction. Futures are full of fakery, maybe even moreso than the equity cash market, the COMEX, or unemployment statistics. There's my first prediction. The NASDAQ is right on the verge of a correction, of which the Dow, S&P, and NYSE will soon follow.
Wednesday's massive losses on the NASDAQ were scary enough, but investors and the general public are going to get even more agitated in coming days. I'm not saying it's going to happen today or tomorrow or even next week, but it's probable that the NASDAQ will fall another 400-800 points in short order, dragging down the other indices into a 10% correction.
Charts are telling the whole story very clearly. There was a correction in September of 2020 when the NAZ fell from 12,074 to 10,519. It nearly did it again in October, dipping from 11965 to 10822. Both times, the index fell below its 50-day moving average, but never got even close to the 200-day moving average.
What happened next? The NASDAQ zoomed higher at a nearly 45 degree angle, left to right, all the way to a top tick at 14,175.12 on February 16, the Tuesday after Martin Luther King Day and one session after reaching the all-time closing high of 14,095.47 on the 12th. The index closed lower on the 16th, down nearly 48 points and it's been lower ever since.
To get into correction territory (-10%), the NASDAQ has to dip below 12,757.61. That's about 250 points. It could do that at any time since it's already closed below the 50-day moving average as of yesterday. It will. It's almost a done deal. With the coronavirus scare fading fast, the media and the powers that be need something else with which to scare the public and the economy is always good for a quick fix.
Scare enough people and they will sell their stocks, which is the intention, to shake out the weaker hands. A little rough patch in the stock market is also good for the political class and their $1.9 billion stimulus package which is now in front of the Senate. Nothing like a weak stock market to justify spending a couple trillion dollars.
Now that I've gone and stuck my neck out on a correction, I'm going to stick it out just a little bit further and predict that the correction will not last long. The NASDAQ will go down to maybe 12,400, maybe even a little below 12,000 before the PPT or the Fed or Janet Yellen or anybody with a loud enough voice tells the world that stocks are cheap. It might even be at the next FOMC meeting (March 16-17), which means stocks get whacked down today, tomorrow, next week, then Jerome Powell and his merry band on central bankers ride to the rescue and stocks go straight up because they're there to support the markets and the economy and they see no inflation threat and look, the government just passed the stimulus bill, and so, all is good, we have spoken.
That's how it works. It'a all rigged, a con game gone wild and I've finally seen it enough times to maybe make a few bucks off it. Don't short this market. You could have on the 16th or the 18th, but, if you did, you should be getting ready to cover.
OK, so stocks are going to go down some, then right back up. Everybody's going to get $1400, cities and states are getting huge wads of cash, and thanks to the video with George Gammon below, we know that Janet Yellen is going to release another trillion dollars worth of additional QE over the next four months (he says so at about the 18:30-minute mark). And, that's confirmed thanks to this Bloomberg report detailing some of the intricacies of Yellen spending down Treasury's cash horde of $1.6 trillion to about $500 billion by the end of June. There will be tons of money sloshing around and much of it will go straight into stocks.
Yellen's spending spree may have already begun. The main buyer is the Federal Reserve, which will add to its already bloated balance sheet. That would also help explain the inordinate rise in the 10-year yield, which really started taking off in February, around the time Yellen made her announcement. It was all there to see, but few understand the implications. I certainly cannot claim to understand how all of this works. It's extremely complex, as stated in the Bloomberg article. Maybe nobody understands it exactly, but surely well less than one percent of the public does, and probably a small number of traders do. What everybody does understand, or will come to understand, is that these huge sums of money changing hands at the top of the financial food chain will have major downstream effects to the markets and the economy.
Moving on to a more obvious subject for prediction: What's the price of sirloin steak? To be honest, it's been so high for so long, I don't even bother to look any more. I'll take a stab that it's about $18 a pound. I'm here to tell you that it's going to be higher this summer and even higher by fall. At my local Ruth's Cris Steak House, a 16 oz. New York strip steak is $53, and a similar size Ribeye is $59. I happen to remember a time - not that long ago - when you could have a full dinner for two with those items on them, appetizers and tip for that price.
So, I predict there will be inflation, and it will be rampant by fall. That's probably a no-brainer.
Incidentally, and this should not go without notice, even though nobody in the financial media mentioned it, but the national debt (federal government debt) ripped past $28 trillion on Tuesday. It happened so fast, sooner than I had thought it would, I missed it too.
How about silver? Well, since the reddit-inspired silver short raid a few weeks ago, the COMEX seems to be in a particularly nasty payback mood. Silver hit $30 on the ask on February 22nd and it's been straight down since, dropping to the low $26 range and briefly with a $25 handle overnight ($25.81). It wouldn't surprise me one bit to see silver on the COMEX at $23 or even lower. There's quite a bit of support in the $22-24 range, but even at today's price - if one were actually able to buy silver at spot or even spot +10% - it's a solid buy.
I'd buy it now and buy more in coming weeks and months. The COMEX has silver rigged to the gills along with gold. They will go higher some day, when the Fed is trashed and the US dollar is absolutely worthless. We're close and getting closer, but that day is not today, and it's probably not for some months if not years from now.
So, OK, it's getting closer to 9:30 am, before which I intend to publish, so I'm going to move along, but first, note that initial unemployment claims hit 745,000 this morning, just announced at 8:30 am by the Labor Department. While on that subject, I think it's an easy call to say that unemployment is going to stay above five percent for a long time. There's no reason to work if you're collecting unemployment checks, and the politicians are making sure those still at home in their underwear most of the day are well supplied with cash.
Bitcoin: It's going higher. At a trajectory that will be lower than the one from November, 2020 to February, 2021, Bitcoin will next rise to $70,000, before heading to $150,000 by September. If it does that, it's likely to double before the end of the year. So, on January 1, 2022, we all may be Bitcoin millionaires, with the price of one Bitcoin at $300,000 or higher. I'll be doing more on the logical limits to the price of bitcoin in future posts. (Hint: it's still very cheap. Buy some).
On the matter of Bitcoin. If you know anything about it and you hopefully have some in your possession, ask your friends the following two questions: Do you have a PayPal account? The answer is likely to be yes. Then, ask, "do you own any Bitcoin?" Wait for the answer, and it it is no, ask them "Why not?" Fun for the whole family.
Finally, interest rates and real estate: The yield on the 10-year note is going to stay put at around 1.45% to 1.55%. The Fed can't allow it to go much beyond that because it would not only affect stocks, but the mortgage market as well. Look for some volatility, but they'll tamp it down pretty soon. If they don't, my projections on stocks are going to be wrong. A yield of 1.65% on the 10-year would likely lead to a bear market in stocks and would also kill the housing market via rising mortgage rates. These things are inevitable, but just not imminent, in my view. Housing it vastly overpriced, by the way. I would not touch any real estate right now. It's all too expensive and due for a reversal on the scale of that which was seen in 2008-09. That will come later in the year or in 2022. There are too many people not paying on their mortgages or not paying rent for real estate not to crash.
There you have it. I'm long stocks (soon), silver and bitcoin. If I could, I would sell real estate. I'm not a broker and currently have just enough real estate for myself, so I'm holding. I don't do fixed income. See my post titled, "Bonds. No Bonds." for reasons why. Overall, the timing is good to buy hard assets, including gold and silver, crypto, and then prepare to purchase real estate at bargain prices with the gains.
Have a great day and week, and don't miss the video below.
--Fearless Rick (FR)
It doesn't get any better than than this video: George Gammon, the Rebel Capitalist, with the Robin Hood of Wall Street, Gregory Mannarino. Amazing insights from two of the leading investment and finance minds of our time.
At the Close, Wednesday, March 3, 2021:
Wednesday, March 3, 2021, 8:27 am ET
On February 12, the NASDAQ closed at an all-time high of 14,095.47. Since then, there's been no lack of pain for holders of tech equities, even as the economy is set to stage a recovery from the coronavirus crisis that has endured for over a year.
Monday, the NAZ rocketed nearly 400 points higher, closing at 13,588.83, in what now, in retrospect, can only be seen as a knee-jerk reaction to severe declines over the prior two weeks. Tuesday's affirmation via a 230-point loss served notice that stocks may have jumped the shark, so to speak, discounting the end of the pandemic by bidding up prices on the rumor.
And now, it's time to sell the news.
Nothing good can befall the overpriced NASDAQ at this juncture. If the effects of the pandemic wear off over the next few months, it will be assumed that buyers were premature in taking the NAZ to all-time highs. On Tuesday, Texas governor, Greg Abbott, announced an end to many of the restrictive executive actions that has kept the Lone Star State locked down and under a state-wide mask mandate for far too long.
His latest order will rescind prior orders and allow all Texas businesses to open at 100% capacity as of Wednesday, March 10. The order also ends the months-long mask mandate.
So, for tech investors, if the Texas gambit proves successful, the rally should stall out because it had already priced in the end of the pandemic. Should Abbott's executive order cause the virus to re-emerge, that would be bad for business all around and likely bad for tech stocks as well, making the current status of the NASDAQ - already down 5.2 percent - tenuous. For the year, the NASDAQ is up just three percent, making the next two to three weeks make it or break it time for the index and possibly the rest of the market.
While tech investors will likely continue to plow money into equities, the fate of bitcoin took a positive turn over the past few days. After dropping to a double bottom at $43,170 (prior low, $44,222, Feb. 10) on Sunday afternoon, the world's leading cryptocurrency has blown higher. Hodlers are waking up to find Bitcoin at $51,800 and higher, with a market cap once again approaching $1 trillion.
Bitcoin's previous high of $58,367 was achieved on February 21st. There's every indication that Bitcoin will exceed even some of the rosiest predictions for the year 2021 at its current trajectory, which includes bouts of 20% gains or declines over excruciatingly short periods of time. The normal pattern for bitcoin is to make 10-20% moves in hours or days, but, despite the apparent volatility, its movement is actually quite orderly. In other words, it's going to the moon and nothing can stop it.
Only brief periods of FUD or "whales" selling into the strength keeps it reasonably well-priced. Once it exceeds $50,000 and stays above that level, the pattern may become extended, but it will pull back, consolidate, and move forward.
With the all-time high again coming into view, the next likely stopping point is $70,000, roughy 20% beyond the current ATH. How soon it will get to that level is a matter of some conjecture, but if prior indications are correct, it can easily do it this month and continue to add value as the year progresses, even with a slowing trajectory.
Considering that in a recent three-month window - mid-November to mid-February - the price tripled from $16,000 to $48,000, it would not be outside the realm of possibility for another tripling in price over the following six months, putting it close to $150,000 before September. A mere doubling over the proceeding four months would have Bitcoin around $300,000 at the end of 2021.
While these predictions may alarm some (central bankers, mostly), there is little doubt over the value proposition Bitcoin presents in a world replete with failing fiat currencies. While probably a majority of investors and speculators will be put off by a price over $50,000 or $60,000, the consideration of a six-fold increase in 10 months certainly will be appealing to many, likely enough to move it considerably higher.
In the world of speculative investments and stores of value, Bitcoin has no constraints, as do gold and silver, the usually-reliable wealth-preservation vehicles. While precious metals will remain viable alternatives, they are unlikely to achieve the returns from Bitcoin, which legendary investor, Paul Tudor Jones" has called "the fastest horse in the race."
Taking the horse racing analogy a step further: While a very solid steed, few thought Citation could win 16 straight races, but that he did, between 1948 and 1950. Nearly 50 years later, along came Cigar, a turf campaigner switched to dirt in 1995, on which he matched Citation's feat of 16 consecutive victories against the best stallions in the world. The streak ended at the Pacific Classic at Del Mar, when he ran second to Dare and Go. Analysts and racing pundits contend that jockey Jerry Bailey committed a tactical error in the race, engaging in a speed duel with two other horses, Cigar the widest of the trio, causing all to tire in the stretch and be beaten by a closing Dare and Go.
The point is that rather than Cigar having an off day or some other mishap, it was likely that human error caused his defeat, the same as might be said of investors who haven't done their due diligence on Bitcoin and thus may miss out on one of the greatest investment opportunities of this generation.
Human error is the proximate cause of much pain and suffering. It doesn't have to be that way.
At the Close, Tuesday, March 2, 2021:
Tuesday, March 2, 2021, 8:45 am ET
Apparently, some big money didn't exactly appreciate Friday's flush on the Dow nor the two straight weeks of declines on the NAZ and S&P, so money came pouring into stocks as bonds settled down (for now), with the 10-year note stabilizing at a yield just under 1.45%.
Market participants had any number of good reasons for confidence in buying stocks. Over the weekend, the US House of Representatives passed their version of "Money Drop 2021" in a supposed COVID-19 relief bill and sent it over to the Senate for approval. Berkshire-Hathaway reported huge numbers for their fourth quarter and full year, blowing away analyst estimates on Saturday, and, not to forget, the NASDAQ was down nearly 1000 points from its recent high (2/16).
Monday's rally turned out to be the best since June, 2020, but the jury's still out on whether it's indicative of a move to higher ground in the near term or just excessive dip-buying by perma-bulls, which is just about everybody these days.
Bulls got more good news prior to the open on Tuesday, as Target (TGT) - one of the few national retailers to thrive during the pandemic lockdowns of 2020 - blew out fourth quarter analyst expectations of $1.60 per share, posting an EPS of $2.79. This was Target's second straight blowout quarter. Third quarter EPS was $3.38, more than doubling the $3.62 estimate. The operator of roughly 1,900 stores and a huge online presence went four-for-four in 2020, beating estimates in each quarter.
Kohl's (KSS), operator of 1,159 stores nationally, also beat expectations Tuesday morning, posting an EPS of $0.42 when it was expected to lost $0.01 per share. The company also provided positive guidance for the remainder of 2021, citing the dwindling numbers of COVID-19 infections and deaths as a rationale for sales growth. Both Kohl's and Target were up modestly in pre-market trading.
Teleconferencing company, ZOOM (ZM), also reported before Tuesday's open, posting a big beat for the fourth quarter. Revenue came in at $882.5 million vs. $811.04 million expected and adjusted earnings per share of $1.22 vs. 79 cents expected. Year-over-year comparisons were out of the park. In 2020's fourth quarter, the company posted revenue of $188.25 and EPS of 15 cents.
Stocks were not alone. Bitcoin bounced off a weekend low just above $43,000, briefly trading over $50,000 early Tuesday morning. Other cryptos, including Etherium, were also sporting early gains.
Commodities took the brunt of the selling, especially oil, where WTI crude fell from above $63/barrel to below $60, finally ending Monday's session at $60.64. As usual, gold and silver were down and flat, respectively, but recovering in early trading.
With less than an hour to the opening bell, index futures are down slightly. Nordstrom (JWN) reports after the close. Wendy's (WEN) and Dollar Tree (DLTR) report Wednesday morning.
In yet another sign that COVID craziness may be on the way out, Major League Baseball began live Spring Training games with fans in the stands on Sunday and again on Monday with no cancellations. Teams are playing in Florida (Grapefruit League) and Arizona (Cactus League). The regular season is set to open on time, Tuesday, April 1. The player's association approved a full, 162-game schedule for 2021.
At the Close, Monday, March 1, 2021:
As counties and states come out of pandemic-inspired economic restrictions and other madness and the general economy begins to mend, stocks may be involved in a little buy the rumor, sell the news kind of action. Wall Street made hay throughout the COVID crisis, and now the sharpies may be taking profits before what promises to be an uneven recovery period.
Two months into 2021, the major indices have come off their recent highs and are close to flat for the year. The Dow is up just one percent, the NASDAQ has put on a gain of just over two percent, while the S&P is in between those two. The big winner is the NYSE Composite, comprised, in the main, of small caps, up 3.34% on the year.
For investors with short attention spans or investment horizons, the period between February and May could prove to be unsettling. March and April are often months in which rallies die or bull markets turn to bears. There's not a lot of reason for concern presently, though the $1.9 trillion stimulus bill passed by the House on Friday is likely to undergo some revisions in the Senate and passage is not, at this time, guaranteed. The pols have set a deadline for mid-March, when extended unemployment benefits run out. Getting the bill to Biden's desk - where he is sure to sign it - is the top priority for the Democrats and Republicans in the Senate may want to inflict some political pain after the second failed impeachment of Donald J. Trump. A staged floor fight may be on the agenda as the Republicans want to look like they're fiscally responsible participants and they'll be joined by a few Democrats in making some changes to the legislation.
In the end, the bill will pass through with the payments of $1400 to individuals mostly intact, but some other non-COVID-related items stripped out. It will be another huge waste of time and taxpayer money, but in the end most of it will be borrowed, boosting the federal budget deficit well past the $2 trillion mark. Already, the cumulative FY21 deficit through January 2021 (four months) is $736 billion, putting the current spendthrifts in Washington, DC are on pace to shatter last year's $3.13 trillion deficit.
By the time congress passes the current handout proposal before them, the federal debt will have surpassed the $28 trillion mark which is currently just $36 billion short of that number. With a run rate of about $3.67 billion per day, the national debt should be pretty close, if not beyond $28 trillion, by this time next week.
The latter part of the week saw round two of the attempted short squeeze by the group known as WallStreetBets over at reddit.com, as some unwary hedge funds layered back into short positions and put options against GameStop (GME) while the redditers waited for the ambush.
While this second go wasn't nearly as successful as the first round in late January, GameStop stock did see its share of wild-riding activity. On Wednesday, when the assault began, the price rose from the low to mid-40s earlier to nearly 100 by the close of trading. On Thursday, the shorts were sweating, as the stock opened at 150 per share and rose as high as 177, before coming in somewhat to 109. Friday, which was also options expiration day, the price went as high as 143 and as low as 87 and change, finally ending the week at 101.74.
Individual results surely vary, but it's a safe bet to say some shorts got smoked and some "amateur" traders from the reddit crowd gained a few shekels in the process. The organized efforts have now gone mainstream and are probably going to remain a feature of Us markets for the foreseeable future. Hedge fund managers beware: the proletariat are on the march for your money.
Equity investors were hardly alone in their sorrow. They were joined by all manner of plungers including those in Bitcoin and other cryptocurrencies and especially in precious metals, as gold and silver were hammered lower on the criminal COMEX.
Bitcoin suffered some serious losses after hitting an all-time high of $58,367 last Sunday morning (Feb. 27). It dropped as low as $43,365 just minutes prior to this posting. The world's leading crypto was down 24% on the week, presenting a buying opportunity for those intrepid enough to believe in a future devoid of central banks.
Etherium also took some blows by sellers. It reached an all-time apex on February at $2041 and currently is holding ground around the $1320 to $1375 level.
Crude oil (and other commodities) seemed to be the only place to hide, though it wasn't pretty. WTI crude opened the week at $61.67 per barrel and closed out on Friday at $61.66, but not before reaching a 52-week high of $63.53 on the 25th.
Yields on treasuries threatened to run off the page, with the 10-year note hitting 1.54% on Thursday before settling out at 1.44% Friday, sitll a full 10 basis points above the previous week's close. The 30-year was under stress as well with the yield topping out at 2.33% on Thursday. Friday's miracle bond rally send the yield back down to 2.17, which was still three basis points better than the prior week's close.
This is a very jittery market in fixed income and those with money on the line are extremely risk averse, so more volatility should scare yields higher and prices lower unless the Fed and the federal government can convince the world that price inflation is not an issue. Good luck with that, Jerome and Janet.
Precious metals were summarily dismissed on the COMEX and by the LBMA price fix in London. Goldbugs received no mercy at the hands of the control freak bullion banks. Gold was as high as $1809.95 on Monday, but spent the remainder of the week dropping off the charts, finally diving to $1734.40, its lowest level since last June.
In the face of a reddit.com-inspired raid on short sellers, silver was similarly battered, topping out around $28.15 on Monday, only to slide down to $26.68 the troy ounce at the New York close on Friday. The constant badgering and rampant mauling of gold and silver prices by the four large bullion banks has become a bone of contention for many in the precious metals space, but more optimistic souls continue to buy the dips and hope for a better future.
While the effect on the gold price at retail was obvious, with premiums still significant but prices lower all around, smaller silver retail buyers were still hungry for metal, which has been in short supply recently, though the shortages seem to be abating with the silver short raid a few weeks in the rear view. Nonetheless, one ounce prices for immediate delivery on eBay and elsewhere continue to ratchet higher. Silver seems to have separated the price of 1000-ounce bars, the province of COMEX and the LBMA, from single ounces and bars and coins up to 10 troy ounces. There appears to be a quite healthy appetite for the money of gentlemen.
Here are the most recent sales on eBay of common gold and silver one ounce items (numismatics excluded, shipping, often free, included):
Item: Low / High / Average / Median
Results of this week's survey puts the Single Ounce Silver Market Price Benchmark (SOSMPB) at $44.34, 40 cents higher than last week's price ($43.94) and the fourth consecutive weekly gain for Money Daily's proprietary silver gauge.
Upcoming this week are some interesting names reporting fourth quarter 2020 and full year results, leading off with Warren Buffett's Berkshire Hathaway (BRK.A), which actually reported on Saturday (Feb. 27). The results are likely to give the indices a boost come Monday, as the holding company delivered outstanding numbers.
Earnings per share (EPS) were $23,015, up 28.5% year-over-year (YOY). EPS beat the consensus estimate of $16,177.03 by 42.3%. Net investment gains were $30.8 billion, up by 24.6% YOY. Buffett also released his annual letter to shareholders [PDF].
After the close on Monday, high-flying Zoom Video Communications (ZM) reports what figure to be exceptional numbers. The mood may not be as bright on Tuesday when retailers Nordstrom (JWN), Target (TGT), Abercrombie & Fitch (ANF), and Kohl's (KSS) release. Keep an eye out after the bell for emerging discount grocer, Grocery Outlet (GO), which has beaten EPS estimates handily in each of the past four quarters.
Wednesday gives us Dollar Tree (DLTR) before the open and American Eagle Outfitters (AEO) after the close. Thursday's releases include grocery chain Kroger's (KR), BJ's Wholesale (BJ), and Costco (COST). Big Lots (BIG) and Ruth's Hospitality (RUTH), operator's of the famous Ruth's Chris Steak Houses close out the releases Friday, prior to the opening bell.
Also, of great interest at the end of the coming week is the Labor Department's release of February Non-farm Payroll. The current estimate is for 110,000 new jobs created during the month, following some months of disappointment. January saw a mere 49,000 jobs created nationwide, taking some shine off the recovery bloom.
That's a wrap.
At the Close, Friday, February 26, 2021:
For the Week:
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