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Money Daily has been providing business and financial market news, views, and coverage on a nearly continuous basis since 2006. Complete archives are available at moneydaily.blogspot.com.

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Israel Strikes Back at Iran; Japan, S. Korea Prepare to Intervene in Sliding Currencies; Stocks Head for Corrections

Friday, April 19, 2024, 8:55 am ET

It is with no small regret to inform readers that, from a chartists' perspective, the general day-to-day patterns exhibited by the major indices - the Dow, S&P, NASDAQ, NYSE - indicate nothing more than nonsense, bullshit, and market rigging to a overwhelming degree.

Anybody who thinks their money is safe in the Wall Street casino, well, they deserve what they'll get, that being, essentially, skimmed, scammed, and eventually raped by the amoral denizens of lower Manhattan and their foreign allies.

Markets today - besides the fact that they all trade in complete harmony, matching each other's every move - are beset by all manner of belligerence, from 0DTE (Zero Days to Expiration) options, to High-Frequency Trading (HFT), to spoofing, naked shorting, dark pools, interventions, central bank ownership of stocks and probably a whole other bag of tricks about which average investors know little to nothing.

Not only are the patterns of each session aberrant and abhorrent, the longer term - over weeks and months - don't inspire any degree of confidence that the markets are either free or fair. Since the days of the dotcom rise and fall and 9-11, markets have lived off hype and hope rather than fundamentals. Worse is the trading regimen since COVID, which served to make matters even worse. Controlled by a handful of ultra-wealthy insiders such as BlackRock, Vanguard, Berkshire-Hathaway, and State Street Bank, what we call "markets" are little more than pissing contests and circus entertainment.

There is not an analyst or trader alive today who can make sense of these markets. One minute they're up, the next down. Take, for instance, the absurd trading pattern of the S&P 500 on Thursday, April 18.

The index opens up 13 points, but, within 10 minutes, it's down 8. Then, for the next roughly hour-and-a-half, it goes straight up, reaching an apex at +33 on the session. Over the ensuing two hours, it loses all gains, and goes negative by 17 points, then spends the remaining 2 1/2 hours bouncing around in a tight range between down 4 and down 20, finally closing down 11 points on the day.

The other indices exhibited nearly exactly the same pattern. One could overlay the Dow, S&P, and NASDAQ and not be able to tell which was which.

What these patterns suggest are markets stuck on stupid, subject to whatever nefarious insider trading might be the flavor of the day. Money isn't safe in such an environment, yet many people have their entire lives tied to this massive fraud of overpriced stocks that are the result of excessive currency debasement for most of the past quarter century.

In case there are still players in the mix, the five-day decline on the S&P is the longest such streak since a five-day stretch that ended on Oct. 23, 2023, which happens to be right before the five-month melt-up that seems to have concluded at the end of March.

Looking longer term, there are alternatives to stocks. Over the past five years - beginning April 19, 2019 through today - the S&P 500 was up 70.45%, but was outdone by gold (+85.94%) and silver (+87.71%). Not to be one-sided, shares of Alphabet Class C (GOOG) stock returned +147.54 over the same span, the point being that precious metals routinely exceed, in dollar terms, returns on other passive investments like index funds. The difference is that gold and silver have no counter-party risk, no fees, can be quickly redeemed for cash in case of an emergency, and will never be worth nothing, unlike some individual stocks. Precious metals are also easy to store and can serve as a hedge against the prying eyes of government and taxation.

Friday is an options expiration day, with close to $3 trillion notional in stocks, ETFs and futures set to expire. Put buying has not been anywhere near the fear level, so there's a good chance of stocks going lower on wrong-footed herd-like traders who have piled into upside calls, as opposed to higher on oversold conditions. Bloodbath? Maybe. Huge upside? Doesn't seem to be in the cards and would likely be only temporary as the major indices are only down three to four percent from recent highs. .

According to MarketWatch, these stocks are down at least 10% from their recent peak, as of Thursday: Nvidia (NVDA), Netflix (NFLX), Tesla (TSLA), McDonald's (MCD), and Salesforce (CRM).

Also, 70% of the S&P 500's individual stocks already trading in correction territory, according to Dow Jones Market Data.

Here's how stocks have fared thus far for the week. Through Thursday's close:
Dow: -207
S&P: -112
NASDAQ: -81
NYSE: -250

All four indices have broken below their respective 50-day moving averages but there hasn't been much talk about that. The recent drops have all the outward appearances of the early stages of a bear market or a correction at least. Getting back to all-time highs would be a pretty heavy lift, especially considering the messy conditions of geo-politics and global economies.

Overnight, in addition to Israel returning the favor with a very limited assault into Iran that amounted to just about nothing, Japan's NIKKEI took a severe jolt, losing 1,011 points, a 2.66% hit, easily the worst decline since making an all-time high on March 22nd (40,888.43). The intra-day low was 36,733.06, before closing at 37,068.35. on a closing basis, that's a 9.34% loss. Intra-day put the NIKKEI into correction territory, -10.16%, so, there you have it, the first major global index to experience a 10% correction.

This is significant in light of the joint statement issued by finance ministers of the U.S., Japan, and South Korea Wednesday on the sidelines of the IMF/World Bank meetings in Washington, DC.

Here's the key takeaway:

[Janet] Yellen, Japanese Finance Minister Shunichi Suzuki and South Korean Finance Minister Choi Sang-mok said in a statement that they will "continue to consult closely on foreign exchange market developments in line with our existing G-20 commitments, while acknowledging serious concerns of Japan and the Republic of Korea about the recent sharp depreciation of the Japanese yen and the Korean won."

Signaling intervention to halt the slide of the Japanese yen and Korean won against the U.S. dollar is a big deal. G7 and G20 nations are in agreement to allow currencies to trade on a market basis. Central bank interventions are rare; this one will be coordinated as Japan and South Korea will be selling dollars. The yen and won are recently down about 9% and 7%, respectively.

With U.S. markets due to open in less than an hour, futures are recovering from the panicky conditions overnight which brought Dow futures down nearly 300 points. They are currently just below unchanged. S&P futures, +1.25; NASDAQ futures, -17.

Looks like an action-packed clown world to close out the week in U.S. markets.

At the Close, Thursday, April 18, 2024:
Dow: 37,775.38, +22.07 (+0.06%)
NASDAQ: 15,601.50, -81.87 (-0.52%)
S&P 500: 5,011.12, -11.09 (-0.22%)
NYSE Composite: 17,388.09, -15.35 (-0.09%)



Stock Market Weakness Becoming More Obvious as Strong Economy Narrative Fails, Interest Rates Rise and Fed Can't Cut

Thursday, April 18, 2024, 9:20 am ET

Reading the latest financial headlines, the term, "CTA" has been popping up on a daily basis. Those unfamiliar with the term are advised that it stands for "Commodity Trading Advisor". According to the authoritative investopedia.com, a CTA is an "individual or firm that provides personalized advice regarding the buying and selling of futures contracts, options on futures, and retail off-exchange forex contracts or swaps."

Advisors who give such advice are required to be registered as a CTA by the National Futures Association (NFA), the self-regulatory organization for the derivatives industry.

Apparently, this group of supposed experts often succumbs to groupthink or herd behavior by crowding into the same trades like a pack of wolves chasing down a wounded doe, which causes violent market moves to the upside or down.

Some of what's on the desks of CTAs figures into the current stock market weakness.

Dutch chip-maker, ASML Holding NV (ASML) dropped seven percent on Wednesday, spilling into broader semi manufacturers including Nvidia (NVDA -3.9%), which contributed to roughly 35 percent of the S&P 500's move lower.

The Philadelphia Semiconductor Index and Nvidia fell more than 3% each on Wednesday, now down more than 10% from record highs in March.

J.B. Hunt (JBHT) a bellwether transportation company, lost eight percent after the company missed first-quarter expectations Tuesday after the bell, reporting earnings per share of $1.22 compared to the consensus estimate of $1.50.

Interest rates are in a danger zone. Yield on the two-year note jumped over five percent on Wednesday before backing off, but the shortest of long-dated maturities that matter has been hovering in a range since last Wednesday (April 10), when it gapped higher, from 4.74% to 4.97%. Since then, it has yielded in a range from 4.88% to just above 5.00%.

All other long-dated treasuries have been similarly affected. The 10-year note has yielded 4.50% or above for six consecutive sessions, reaching a high of 4.67% on Tuesday, and closing out yesterday at 4.59%. Failure to keep yeilds contained will almost surely result in a massive flight from stocks.

Current CTA methodology suggests that the S&P may break down further if it breaches 5010. Support is widely acknowledged to be in an area around 4800, though it does not appear to be very solid. The index could easily be seen testing down to 4500 if conditions remain slanted negatively.

It's becoming apparent that all the news hasn't been as rosy as the preachers of Bidenomics purport. The overriding theme of the past five months - in which stocks have rallied persistently - has been of the Fed lowering interest rates and a return to QE salad days of easy money for Wall Street operators. Stubborn inflation figures have put that narrative to bed and market participants are now wondering if the Fed might have to raise rates further to stem the tide of rising consumer prices.

Originally caused by excessive money printing during the COVID period, the force of inflation (which is, in its purest form, dollar debasement) is manifested through higher prices, both at the producer and consumer levels. Price spirals have the unique quality of feeding upon themselves, and central banks waving their magic money-printing wand only exacerbate the problem.

Lowering the federal funds target rate or resorting to some kind of liquidity gimmick (stealth QE) is a mistake the Fed doesn't want to make, but the threat of a market crash or some exogenous geo-political event could force them to pull the trigger in an emergency move. Don't put it past these folks. Blundering economic decisions are their stock in trade.

On the earnings front, Discover Financial (DFS) missed earnings estimates for the first quarter and was under pressure on Wednesday. Their proposed takeover by CapitalOne remains under review by authorities and is by no means a sure thing.

Taiwan Semiconductor (TSM) returned to growth in the first quarter, beating estimates. The world's premier chip-maker earned $1.38 per share on sales of $18.87 billion in the quarter. Analysts had expected earnings of $1.30 a share on sales of $18.31 billion. In the year-ago period, TSMC earned $1.30 per U.S. share on sales of $16.62 billion. Investors, however, aren't buying it. Shares are lower by three percent in pre-market trading.

Futures are pointing to a higher opening at 9:30 am ET, though enthusiasm is tepid, with S&P futures up only 8 points, Dow futures up 80, and NASDAQ futures up a mere 28 points.

April's been a tough month and this week a rough one. It appears that traders are nervous and taking profits while they're still available.

At the Close, Wednesday, April 17, 2024:
Dow: 37,753.31, -45.66 (-0.12%)
NASDAQ: 15,683.37, -181.88 (-1.15%)
S&P 500: 5,022.21, -29.20 (-0.58%)
NYSE Composite: 17,403.44, -10.54 (-0.06%)



Are Markets Already Beginning To Correct?; Magnificent Seven Stocks Appear Vulnerable; Military Funding on Tap in Congress

Wednesday, April 17, 2024, 9:28 am ET

The Dow Jones Industrial Average posted a gain for the first time in the last seven sessions, and for only the second time in the last 12.

The Dow has lost some 2,008 points since making an all-time closing high of 39,807.37 on March 28 and is up less than one half of one percent on the year. The index closed out 2023 at 37,689.54 on December 29. The Dow's decline over the last two-plus weeks brings into question whether stocks are headed for a correction of 10-15% or this is nothing more than normal profit-taking in a fairly over-heated market.

Wall Street enthusiasts will argue that there's nothing about which to worry, noting that the S&P and NASDAQ indices have held up quite well in the first days of the second quarter, down just four and three percent, respectively. In fact, the NASDAQ made a record closing high just this past Thursday, at 16,442.20 and both indices are sporting healthy gains for the year-to-date.

Skeptics will counter that the NASDAQ and S&P have not suffered nearly as much as Dow stocks lately simply because they are much broader indices, and both are well-supported by only a handful of stocks, in particular, the Magnificent 7 tech behemoths and energy stocks to a lesser degree. However, those Mag7 stocks include Tesla (TSLA) and Apple (AAPL), both of which have been knocked lower lately. When weakness appears, there's usually usually more to come in the same sector.

Not to put too fine a spin on it, but both Apple and Tesla have been headed lower since peaking in December, running counter to the general uptrend for the past three months. With earnings season underway, are Alphabet, parent of Google (GOOG), Amazon (AMZN), Microsoft (MSFT), Nvidia (NVDA) and Meta Platforms (META), parent of Facebook, about to release first quarter results that surprise to the downside?

It seems unlikely for AI chip-maker Nvidia, which has nearly doubled in just the first quarter, from 481 in January to 950 by the end of March, but it too has pulled back to a more pedestrian price of 874. Even if the company produces another outstanding quarter, how much higher can it be expected to go? With a P/E above 70, it's priced beyond perfection, currently walking on air, above the clouds. Nvidia reports next Monday, April 22.

META appears to be in good shape. The company almost literally prints money. The EPS from the first quarter last year was 2.20, and 5.53 last quarter. While it's not expected to beat the prior quarter, topping year-ago EPS ought to be a breeze, so the stock seems to be a safe bet for their report next Wednesday.

Microsoft just continues to astound and confound, consistently beating somewhat lowball estimates quarter after quarter, so expectations of 2.83 per share when they report on April 25 (Thursday) should be right in their wheelhouse.

Amazon, up just more than 20% year-to-date, could be the wild card, at a P/E of 63 and no dividend. With slim profit margins, the internet retailer is expected to return EPS of just 0.83 when it reports next Friday. The closure of Baltimore harbor may dent results, but Amazon has a history of logistical success, so anything more than a two to four-cent hit to the bottom like would be a surprise. With U.S. retail sales still strong, Amazon should do well enough to at least match expectations.

Finally Google, which reports on Tuesday of next week, looks to top 1.50 per share for the quarter after post 1.64 in the fourth quarter of 2023, an easily doable target. Like Amazon, they offer no dividend, so they may be vulnerable if they miss or issue less-than-exciting guidance.

Overall, most of the Mag7 stocks look like holds here rather than buys, a condition that reinforces the argument that stocks - especially this group - is ripe for a correction. The rest of the market on the S&P and NASDAQ indices might matter more, but these are the ones which everybody notices and which will probably retain their leadership roles.

What could derail stocks is the uneasy geo-political situation, though from all appearances, Israel would be foolish to strike back soon against Iran. In spite of Western media gloss, Iran accomplished any number of objectives, from hitting their primary targets to discovering vulnerabilities in the Israeli defense array. Their show of force this past Saturday was very limited but provided enough evidence to Israel that any further provocation would result in even worse outcomes. The report presented on the Simplicus Substack, Scott Ritter's report and Pepe Escobar's essay over on Sputnik provide more depth and insight into how the Middle East and the world was reshaped by Iran.

The U.S. congress is supposed to vote on funding for Israel, Ukraine, and Taiwan this week. Speaker Mike Johnson is putting up funding requests in separate bills, which has already caused enough rancor in the House to make the effort worthy of nasty politicking, name-calling, and finger-pointing. Israel will probably get some money, but not without serious dissent from the far left of the Democrats. Ukraine funding is a nightmare scenario, with House Republicans nearly in full revolt if the funds aren't also tied to money for U.S. border security.

With losing positions in almost every area of conflict, the U.S. is looking more and more like a paper tiger every day, the underlying theme from the hallowed halls of congress displaying more bark than bite. Extra money to allies or countries the U.S. has supported in the past may not be the same easy lift it used to be. More than $34 trillion in debt, the U.S. shouldn't be the one throwing money around on losing military prospects. Americans are fed up with congress funding everything other than what matters to the populace: inflation and borders.

And then there's the not-so-small matter of interest rates and the Fed's positioning in the lead-up to the November elections. Rate cuts are probably non-starters, while further rate hikes may come into play. That's a negative, especially with the two-year note shooting beyond five percent on Tuesday, with the 10-year also screaming higher (4.69&).

Wednesday earnings releases are a mixed bag from the likes of Abbot Labs (ABT), Discover Financial (DFS), CXS (CXS), Travelers (TRV). Alcoa (AA), and Las Vegas Sands (LVS).

Notably, Travelers (TRV) surpassed expectations, but the stock is off more than five percent pre-market. Futures are hovering in positive areas, but down from earlier highs. Gold and silver are both rallying.

A market correction of 10-15% appears more likely than not over the next four to eight weeks.

At the Close, Tuesday, April 16, 2024:
Dow: 37,798.97, +63.86 (+0.17%)
NASDAQ: 15,865.25, -19.77 (-0.12%)
S&P 500: 5,051.41, -10.41 (-0.21%)
NYSE Composite: 17,413.98, -92.95 (-0.53%)



World War III Hasn't Yet Begun, But Rumors Will Be Readily Circulated for Public Consumption and Insider Profits

Tuesday, April 16, 2024, 10:00 am ET

What a disaster the neocon deep state has created for the United States.

With Israel acting like a rabid dog unleashed into a rough neighborhood, the U.S. had to employ back channel communications - purportedly through Turkey - to keep Iran's retaliatory attack on Israel to more of a show of force than an actual destructive assault, then had to reel in Bibi Netanyahu's return retaliation, which was supposed to go off Monday night, as reported breathlessly by American media outlets.

It didn't happen.

Not that the stock market needs excuses to drop like a rock as it did on Monday, but the alarm bells ringing were simply overkill to hide the truth that the U.S. finds itself in a precarious military position, losing in Ukraine, at loggerheads with China over Taiwan, and consequently unable to go to war with Iran, which, as it turns out is a formidable foe that could turn Israel into rubble if it so desired.

Stocks seemed to be enjoying some level-headed trading Monday, in the aftermath of Saturday's somewhat orchestrated "attack" on Israel, until early afternoon, when word began to circulate about Israel striking back quickly. That sent stocks reeling and interest rates rising, with the 10-year yield spiking as high as 4.66%. The Dow recorded its 10th decline in the past 11 sessions and finished the day showing a year-to-date gain of just 45 points.

Having been the laggard for the latter part of the November-March rally, Dow stocks like Apple (AAPL), Boeing (BA) and SalesForce (CRM) have been taking their toll on the world's most famous stock index. The NASDAQ and S&P 500 are still solidly in the black for the year, but it's early and indications are that the U.S. is about to - if not already - enter a recession.

Of course, tin-hat conspiracy theorists can't have that, avering that the master plan is for stocks to levitate, the Fed to cut interest rates, Ukraine to stabilize, and Joe Biden win a fake re-election in November, on the heels of his fake election in 2020. Apparently, those harboring such thoughts haven't taken the time to read Joe Biden, Fall Guy, in the Janaury edition of idleguy.com.

Biden, the demented pedo pervert who can't find his way off a stage or onto Air Force One without assistance, has been set up as the fall guy for all the evil machinations that deep state operatives like recently-retired State Department river rat, Victoria Nuland, her husband, Robert Kagan of the Brookings Institute have initiated.

The true plan, now that it appears all is lost in Ukraine, is to make Biden take all of the heat for U.S. military blundering, the general economy, and the stock market, and lose the election overwhelmingly to Donald Trump.

In typical neocon war-mongering deep state fashion, the inner operatives, in conjuction with Democrats and RINOs in congress along with the compliant U.S. media cabal, will spend another four years nit-picking and nattering at everything President Trump does, and maybe find reason enough to impeach him a few more times. As thinking by slope-headed neocons goes, the next four years should be easy-peasy, having Trump inherit a world of hurt. Like everything else they touch, this plan too is likley to backfire when Trump takes office in January, 2025. Heads will roll.

Meanwhile, stocks seem to have recovered from the shock of another potential missile strike in the Middle East and are focusing on earnings from Morgan Stanley (MS), which beat projections handily, but not Bank of America (BAC), which suffered first quarter profits dropping 18% from a year ago as net interest income fell off, as it did with other retail banks, Wells Fargo, JP Morgan Chase, and Citigroup.

Also reporting prior to the open were PNC Financial Services (PNC), down 1.5% in early trading, Bank of NY Mellon (BK, up 0.5% early on), and United Health (UNH), which surivived a cyber-attack during the quarter and posted an earnings report that was ahead of expectations.

Morgan Stanly is up nearly two percent in early trading activity.

With Israel supposely under leash for now, Wall Street can focus on earnings, that is, until the next fake news story about the "imminent" beginning fo Wolrd War III hits the wires. It would be prudent to expect no fewer than six or seven midday "warnings" about war, fist-pumping, saber-rattling between now and the end of the second quarter so that stocks can gradually drop off and investors can capably "buy the dips" when no bombs go off.

It's a poorly written script that has been written for the American public and for vulture investors upon which to gnaw.

At the Close, Monday, April 15, 2024:
Dow: 37,735.11, -248.13 (-0.65%)
NASDAQ: 15,885.02, -290.08 (-1.79%)
S&P 500: 5,061.82, -61.59 (-1.20%)
NYSE Composite: 17,506.93, -132.11 (-0.75%)



WEEKEND WRAP: As Iran Strikes Israel, Markets Will Need to Keep Cool Monday; Gold, Silver, Oil Expected to Rise; Bitcoin Slapped Silly

Sunday, April 14, 2024, 11:40 am ET

Following Iran's Saturday night retaliatory strike on Israel, Sunday talk shows guests were thumping war drums in a disturbing display of gaslighting by neocon MIC supporters.

On Fox News Sunday, White House National Security Communications Advisor John Kirby tap-danced around the question of what the United States would do in the event of an Israeli counter-counter-strike but was more emphatic about how effective Israel's "iron dome" defense system handled the overnight drone and missile attack.

The official narrative is that 99% of Iran's attack was repelled with minimal damage. Other reports circulating in the non-controlled media suggest that three airbases were at least partially destroyed. The truth, as usual in these kinds of situations, is the first casualty.

Iran was responding to Israel's bombing of the Iranian consulate in Damascus two weeks ago where senior military leaders were killed. The April 1 assault was in contravention to accepted rules of engagement and UN dictates, though the U.S. mockingbird media largely fails to mention those inconvenient facts in their rush to expand the Middle East conflicts into a wider war expressly designed to attack Iran.

Current and ongoing geo-politics is likely to dominate politics and financial affairs for the foreseeable future. War-mongering parties in the U.S., UK, and Europe continue to walk a path of destruction toward World War III.

Western leaders should take care in what they wish for lest those wishes be granted. "Don't" is not adequate foreign policy.


Stocks

Dow stocks were down every day last week and nine of the last ten sessions. The two-week loss of 1,824 points on the industrial average is the largest decline since September, 2022.

April has thus far been a cruel month for equities, especially on the Dow. Since the March 28 close at 39,807.37 the industrials have shed some 4.5% so far this month. S&P and NASDAQ indices have been affected to a lesser degree. The NYSE Composite fell just over 500 points this week.

Bank stocks first quarter earnings released on Friday set an ugly tone for the start of earnings season. JP Morgan Chase (JPM) took a 6.5% hit after its earnings call. Citigroup and Wells Fargo, both of which reported Friday morning, were both lower on the week's closing session. State Street (STT) topped estimates and finished up by more than 2.5%.

With Middle East militarism and the debate over funding for Ukraine, Israel, and Taiwan in congress serving as a backdrop to the coming week's trading, earnings reports may have less of an impact on broader markets.

Continuing the flow of financial companies, Goldman Sachs (GS) leads off the earnings parade Monday morning, along with Charles Schwab (SCHW) and M&T Bank (MTB).

Tuesday is fully-loaded, with Bank of America (BAC), United Health (UNH), United Airline (UAL), JB Hunt (JBHT), Bank of NY Mellon ((BK), PNC Finaicial (PNC), Morgan Stanley (MS), Northern Trust (NTRS), and Johnson & Johnson (JNJ) reporting.

Wednesday's leading companies reporting include Abbot Labs (ABT), Discover Financial (DFS), CXS (CXS), Travelers ((TRV), Alcoa (AA), and Las Vegas Sands (LVS).

Thursday brings reports from Netflix (NFLX), Nokia (NOK), Taiwan Semiconductor (TSM), Ally Financial (ALLY), Key Bank (KEY), PPG (PPG), Blackstone Group (BX), and homebuilder DR Horton (DHI).

The week closes out Friday morning with earnings reports from Proctor & Gamble (PG), American Express (AXP), Fifth Third Bank (FITB), Huntington Bankshares (HBAN), Lakeland Bank (LBAI), and Regions Financial (RF). These regional banks will set the tone for trading into the weekend. Smaller banks have been under the gun for a year, since the collapse of Signature and Silicon Valley Bank last April.

Keeping a close eye on financial stocks in the upcoming week may be beneficial towards an understanding of general banking and U.S. financial conditions.


Treasury Yield Curve Rates

Date 1 Mo 2 Mo 3 Mo 4 Mo 6 Mo 1 Yr
03/08/2024 5.51 5.48 5.46 5.40 5.34 4.92
03/15/2024 5.52 5.48 5.48 5.41 5.38 5.05
03/22/2024 5.51 5.47 5.46 5.40 5.34 4.98
03/28/2024 5.49 5.48 5.46 5.42 5.38 5.03
04/05/2024 5.47 5.50 5.43 5.41 5.34 5.05
04/12/2024 5.48 5.50 5.45 5.42 5.36 5.13

Date 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
03/08/2024 4.48 4.25 4.06 4.08 4.09 4.36 4.26
03/15/2024 4.72 4.51 4.33 4.33 4.31 4.55 4.43
03/22/2024 4.59 4.36 4.20 4.22 4.22 4.47 4.39
03/28/2024 4.59 4.40 4.21 4.20 4.20 4.45 4.34
04/05/2024 4.73 4.54 4.38 4.39 4.39 4.65 4.54
04/12/2024 4.88 4.70 4.54 4.53 4.50 4.73 4.61

With both CPI and PPI readings for March above expectations, signaling a return to higher rates of inflation, interest rates on long-dated maturities were slapped higher, with yield on the 10-year note reaching its high point for 2024 on Thursday, topping out at 4.56%. The 30-year also hit the high yield for the current year, peaking at 4.65%.

Anybody thinking that bond yields aren't headed above and beyond five percent needs to be reminded that the 10-year note hit a high of 4.98% on 10/19/23. It's likely that rates will return to those levels shortly as there's now ample evidence that the Fed, rather than cutting rates by 75 basis points this year, may have to reign in inflation with another round of rate hikes, sending short term rates as high as six or seven percent.

The Fed hasn't done enough to quiet the economy and prevent the spread of price inflation, keeping rates on hold since June of 2023. In the inflation frenzy of the 1970s, Paul Volker's Fed raised the federal funds rate to as high as 19% to prevent inflation from wrecking the economy. The current braintrust huddling inside the Eccles Building has neither the nerve nor the inclination to do what's necessary to slow down price hikes and what could easily expand into a hyper-inflationary event, wrecking not just the economy, but the U.S. dollar-backed currency.

At this juncture, while rate cuts are now off the table for the April 30 - May 1 and June FOMC meetings, the Fed might actually surprise markets with a 25 or even a 50 basis point hike if inflation readings continue to show re-ignition of inflation. That would tank stocks and likely send 10-year benchmark yields above six percent.

Expectations for the Fed to handle economic matters with the seriousness they deserve are low. Their usual coddling of equity markets, to the detriment of everything else, guides their decisions despite what they might say in public.

Actions speak much, much louder than words. The Fed is itching to stimulate the economy and is already doing so by tapering QT and the usual day-to-day market interventions.

The spread on 2s-10s remained in the expansionist safety zone (-38) that had maintained since February. 5s, 7s, and 10s have dis-inverted (normalized) against the 30-year. Full spectrum was squeezed higher, to -87, heading closer to the danger zone for stocks (above -85, i.e., less negative) that was in effect August through October of 2023.

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
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48
12/15/2023: -53
12/22/2023: -41
12/29/2023: -35
1/5/2024: -35
1/12/2024: -18
1/19/2024: -24
1/26/2024: -19
2/2/2024: -33
2/9: -31
2/16: -34
2/23: -41
3/1: -35
3/8: -39
3/15: -41
3/22: -37
3/28: -39
4/5: -34
4/12: -38

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
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123
12/15/2023: -154
12/22/2023: -149
12/29/2023: -157
1/5/2024: -133
1/12/2024: -135
1/19/2024: -118
1/26/2024: -116
2/2/2024: -127
2/9: -117
2/16: -103
2/23: -112
3/1: -121
3/8: -125
3/15: -109
3/22: -112
3/28: -115
4/5: -93
4/12: -87


Oil/Gas

WTI crude oil actually closed lower on the week, at $84.86, following last Friday's close of $86.73, which was near a six-month high ($88.37, October 19, 2023). Following the Iran-Israel tiff over the weekend, it's very possible that oil prices will rise over fears of further escalation in the conflict, though market participants are geared to keep prices contained. It might be a few weeks or even months before oil prices begin rising significantly, since they're already 20% higher

Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump at $3.62, a six-month high, up just three cents from last week.

California remains the most expensive place to fuel up, with a gallon costing $5.44 on Sunday, eleven cents higher than last week. Pennsylvania, atop the Northeast, was higher by another four cents, to $3.72. Prices remained close to the breaking point in Illinois, steady at $3.97 a gallon. Neighboring Indiana is paying $3.60, eleven cents lower than last Sunday.

There have been no states with gas prices under $3.00 for five straight weeks. Colorado continues to report the lowest in the country ($3.03). Other than Georgia ($3.42) and Florida ($3.50), the Southeast cluster from Oklahoma east to South Carolina are all hovering in a range between $3.06 and $3.27, with most of them slightly higher than last week. Mississippi is at $3.06. Tennessee, $3.28.

Arizona ($4.15) has jumped 36 cents over the past two weeks, joining California, Washington ($4.67), Nevada ($4.62), and Oregon ($4.43) in the $4+ club.


Bitcoin

This week: $63,829.50
Last week: $69,743.90
2 weeks ago: $70,423.20
6 months ago: $27,186.10
One year ago: $30,324.10

For whatever reason, Bitcoin got slobber-knocked when Iran began firing away at Israel Saturday night, sending the price of the phantom crypto to its lowest level in nearly a month. The downdraft was probably a fear trade by a few whales to take profits while they are available. War escalation appears to be a negative for funny money, U.S. currency not excluded.


Precious Metals

Gold:Silver Ratio: 84.38; last week: 85.11

Per COMEX continuous contracts:

Gold price 3/15: $2,159.40
Gold price 3/22: $2,188.20
Gold price 3/29: $2,254.80
Gold price 4/5: $2,349.10
Gold price 4/12: $2,360.20

Silver price 3/15: $25.51
Silver price 3/22: $24.84
Silver price 3/29: $25.10
Silver price 4/5: $27.60
Silver price 4/12: $27.97

Gold and silver both made huge moves during the week before being smacked down by the usual bad guys at the COMEX, LBMA, NY Fed, ESF, BIS, and elsewhere in the Western power dynamic, with gold dropping by nearly $100 on Friday, and silver, which nearly hit $30 ($29.87), before being crushed by nealry two dollars (-$1.90 on Friday).

The smackdowns were likely a bum-rush by Western elites in anticipation of the Iran missile and drone strikes which everybody knew were incoming, so as to not allow prices to go excessively high come the re-opening of trading after 6:00 pm ET in Asian markets. Prices for both metals are well-supported at these levels and Friday's takedown is unlikely to dampen enthusiasm nor slow momentum in any meaningful way. While the slightly lower prices may provide a bit of a buying opportunity, it seems to have mattered little to retail buyers, as prices on eBay are at exceptionally-high levels.

Year-to-date, gold is up 14.50%, silver, $18.29%. This is only the beginning of a 15-year commodities super-cycle. Do not be fooled by one-day price suppression tactics. Prices in Shanghai were largely unaffected by the COMEX dump. Increasingly, precious metal prices will be determined by BRICS+ members, particularly in China, Russia, and the UAE.

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: 29.98 44.77 38.04 38.30
1 oz silver bar: 34.00 48.00 39.33 39.39
1 oz gold coin: 2,409.11 2,531.23 2,447.28 2,448.82
1 oz gold bar: 2,339.00 2,514.52 2,431.31 2,434.22

The Single Ounce Silver Market Price Benchmark (SOSMPB) rose to a higher level on Sunday morning, to $38.77, a gain of $1.61 from the April 7 price of $37.16 per troy ounce.


WEEKEND WRAP

If you like your ongoing proxy wars, you can keep your ongoing proxy wars.

"Blessed are the peacemakers, for they will be called the Sons of God." - Matthew, 5:9


At the Close, Friday, April 12, 2024:
Dow: 37,983.24, -475.84 (-1.24%)
NASDAQ: 16,175.09, -267.10 (-1.62%)
S&P 500: 5,123.41, -75.65 (-1.46%)
NYSE Composite: 17,639.04, -276.16 (-1.54%)

For the Week:
Dow: -920.80 (-2.37%)
NASDAQ: -73.43 (-0.45%)
S&P 500: -80.93 (-1.56%)
NYSE Composite: -483.22 (-2.67%)
Dow Transports: -421.09 (-2.65%)



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idleguy.com July 2024
IdleGuy.com July 2024, Vol. 1 #6