Money Daily Financial Money News Week of June 6 - June 12, 2021 Stocks Bonds Commodities Gold Silver Oil Bitcoin

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Week Likely To End Quietly As G7 Summit Kicks Off in England

Friday, June 11, 2021, 8:50 am ET

Roundly disregarding the latest reading on inflation, stocks moved higher on Thursday, despite gains being truncated by sell orders throughout the session. With more believers than naysayers, the major averages all finished with gains, even as the BLS reported annual inflation at 5.0%, the highest since August of 2008.

Confidence may have been buoyed by the lower monthly data, which showed all items in the CPI survey up only 0.6% in May, down from April's 0.8% jump. Bulls were also aided by the rally in bonds, which pushed the yield on the 10-year treasury note to 1.45%, the lowest it has been since March 3rd.

Led by the NASDAQ, which was up more than 3/4s of a percent, stocks moved closer to all-time highs with the S&P 500 finishing the day at 4,239.18, surpassing the previous record close of 4,232.60 from May 7.

Disappointing investors was the Dow Jones Industrial Average, which was up by nearly 300 points early in the session but gave back almost all of the advance, finishing fewer than 20 points higher.

Approaching the final session of the week, futures are poised for a positive open. Weekly options expirations should keep a lid on gains as the real fireworks will come next week with the June FOMC meeting Tuesday and Wednesday, followed by quad witching on Friday when market index futures, options futures, stock options, and stock futures expire.

The last quad witching Friday, March 19, saw the dow tumble by 235 points, the NASDAQ gain 99, and the S&P nearly flat with a two-point loss.

Elsewhere, silver advanced 23 cents on the COMEX, from $27.73 to $27.96 per ounce, while gold advanced nearly $10, to end at $1898.20 in New York. The efforts to keep silver below $28 and gold under $1900 have been apparent to all the pst few weeks. Upcoming regulations on reserves via Basil III, which take effect for European-based banks at the end of June are straining the credulity of the paper prices on the COMEX and at London's LBMA daily price fixing.

Despite low volumes, Bitcoin led cryptos higher after news that El Salvador had passed a law making Bitcoin legal tender immediately, requiring merchants to comply within 90 days. The US dollar will now stand beside the crypto king as recognized currencies in the Central American country. Bitcoin gained beyond $38,000, and currently is trading above $37,000.

With Joe Biden drooling his way over the Atlantic to the G7 Summit in England, the assembled world leaders of the USA, Great Britain, France, Germany, Italy, Japan, and Canada, will tackle issues ranging from the virus crisis, global warming, and free trade to the challenges in dealing with China and Russia.

With their assembled economies teetering on bankruptcy, this meeting is more of a clown show than anything substantive. It should at least supply journalists with plenty of grist for the gossip mill. Biden's meeting with Russian President Vladimir Putin over the weekend should be a bell-ringer.

Friday's trading may be a bit subdued, though there is plenty on investor plates over the weekend.

At the Close, Thursday, June 10, 2021:
Dow: 34,466.24, +19.10 (+0.06%)
NASDAQ: 14,020.33, +108.58 (+0.78%
S&P 500: 4,239.18, +19.63 (+0.47%)
NYSE: 16,651.43, +31.42 (+0.19%)

Best Asset Classes Are Your Mind and Your Skills; Annual CPI Reading at 5.0%

Thursday, June 10, 2021, 9:19 am ET

There are more than enough financial advisors out on the internet and occupying offices in cities small and large to satisfy the demand for their craft.

Most of them tout the same logic and investment advice you can get for free on CNBC, Fox Business or youtube videos.

Currently, the trend for the so-called contrarians is to buy gold, silver, and crypto, to protect oneself from the coming collapse of fiat currencies. While that's useful advice, said collapse could still be years away, and there's money to be made elsewhere, particularly in stocks, which is the golden grail of all currency.

However, stocks are near all-time highs and look to be setting up for the eventual downfall that besets all bull markets. That doesn't mean one should shun equities entirely. Fact of the matter, most of the heavy hitters in the financial world are seriously long stocks and have been right for quite some time. Naturally, they're selective in what they buy and sell, but also, the very best of them are crafty and disciplined about when to buy and sell. To them, profit is the goal, and even if it's two percent or five percent, that beats losing, hands down, every time.

What separates successful traders from everyday advisors is not how many clients they can attract to their particular management style, it's how consistent they are about managing risk, how they take small losses instead of big ones, and knowing not just what to buy or sell, but when. It's skill, and the best ones have honed their skills over many long years, learning from mistakes along the way and applying those lessons in real time to today's investment panoply.

Chances are, if one is currently holding substantial amounts of money and assets, it's either because one has done the proper due diligence, invested in the right assets at the right times or has a quality advisor doing all the hard work for them. It's a rare breed that can juggle the rigors of work, family, budgeting, and investing and be successful in all of them, but, that is what society demands of those who would be called successful.

Navigating through life's ups and downs without losing one's mind or money or both is a challenge unique to the times in which we live. Information, while it is as plentiful as it has even been, isn't always vetted, verifiable or even challenged. Sometimes, the information - like much of what the mainstream media peddles - is just plain wrong or leads one to incorrect conclusions. It's for that reason and others that your own mind is your greatest asset.

The ability to sift through an endless barrage of information and locate what's true and useful is a skill few have competently acquired. Rational thought and critical analysis have always been instrumental in separating the common from the extraordinary, the factory floor worker from the CEO, the computer nerd from the Steve Jobs.

Clear thinking and critical analysis will prove over time to be the asset which soars above all others. Ability to ferret out facts and use them to advantage supplies an incredible edge in life's journey.

Second to clear thinking, but almost on a par is having a particular skill and honing it to as near to perfection as possible. This should be obvious, but if your intention is to make money at anything, it would behoove one to learn as much as possible about the particular skill, craft, or job function, though most people do not. Most people just go to work, do what they're told to do, collect their check and move along.

The best have a different attitude. They learn. They grow. They innovate. And eventually, they prosper as recognized experts in their field of endeavor. The greatest painters - Van Gogh, Picasso - were not great from the very start. They had to learn their craft like everybody else. But, they reveled in it, immersed themselves into it, and kept at it until they eventually were at such a high level of expertise that they produced masterpieces.

The same applies for great writers, dancers, architects, engineers, restauranteurs, all endeavors; they combine a passion with critical thinking to become outstanding and distinct. Their innate talent is but a small part of their success. As the great inventor, Thomas Edison. wisely stated,

Genius is one percent inspiration and ninety-nine percent perspiration.

A few other quotes are also appropriate:

The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark. -- Michelangelo

It's not what happens to you, but how you react to it that matters. -- Epictetus

The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails. -- William Arthur Ward

Carry on with your investing and trading, but always remember that your two greatest assets are always at your disposal, your mind and your skills. Take wise advantage of them.

Rummaging through Wednesday's financial markets, stocks were down, though nobody seems to be worried. That will come later. Failing to make new highs over the last month and longer (NASDAQ), the major averages have come close, but don't quite seem to have the momentum to carry the trade further.

Bitcoin stole all the headlines on Wednesday as the government of El Salvador passed a law making Bitcoin legal tender, requiring all merchants to accept it - along with US$ - within 90 days. The government also announced that it would bestow permanent residency on any individual investing three Bitcoins in El Salvador.

This may have been a watershed moment for Bitcoin, as El Salvador is the first - though unlikely to be the last - sovereign nation to accept crypto as real currency, i.e., money. At the very least, the news halted the relentless slide in crypto over the past six weeks and served as a reminder that neither blockchain technology nor Bitcoin is going away and that despite loathing it personally, central bankers and government regulators are powerless to stop its growing acceptance.

Bitcoin is currently trending above $38,000, after falling below $32,000 a day earlier.

Approaching the opening bell, the BLS reported at 8:30 am ET that the CPI's yearly measure of inflation advanced to 5.0% on the all items index, the largest 12-month increase since a 5.4-percent increase for the period ending
August 2008.

The core index, for all items less food and energy, rose 3.8 percent over the last 12 months, the largest such increase since June 1992. The energy index rose 28.5 percent and the food index increased 2.2 percent over the last 12 months.

It's interesting to note the headline number came close to that of August 2008. We all know what happened right after that, which makes the Fed's case for inflation being "transitory" all the more reasonable if what's ahead is a deflationary crash. The Fed is likely correct about this, as sustained inflation requires a growing, hot economy and consumers with plenty of cash and confidence, conditions not in effect today.

The US economy is very weak, as is most of the developed and developing world. The gains in energy, housing, building materials - particularly lumber - have been more likely caused by supply chain disruptions or a mismatch of the usual supply-demand dynamic as the world emerges from a year of shutdowns, quarantines, and confusion, and are thus, temporary.

Monthly data for May was, in fact, below the prior month's 0.8% reading, coming in at a cooler 0.6%.

At the Close, Wednesday, June 9, 2021:
Dow: 34,447.14, -152.66 (-0.44%)
NASDAQ: 13,911.75, -13.15 (-0.09%)
S&P 500: 4,219.55, -7.71 (-0.18%)
NYSE: 16,620.00, -65.50 (-0.39%)

As Stocks Languish Below All-Time Highs, El Salvador Approves Bitcoin As Legal Tender

Wednesday, June 9, 2021, 8:49 am ET

Tuesday was quite the sluggish day in US equity markets. Stocks struggled for any kind of upside momentum, but only the NASDAQ managed anything substantial. The S&P finished ahead by less than a point, while the Dow Industrials dropped fractionally. Market action was no better than a day at the beach.

It's been a month since the Dow made a record close. On May 7th, the average topped out at 34,777.76 and sold right off. There's been some consolidation since then, leaving the Dow less than 200 points from the all-time high, but there seems to be no rush or consensus to push it any higher.

Coincidentally, early May was also when Bitcoin began falling in dramatic fashion. It was already down from nearly $64,000 to a range around $57,500, but continued to lose ground, making May one of the worst months ever for the world's leading cryptocurrency.

Just yesterday, Bitcoin dropped to just above $31,000, once again in the throes of a more than 50% decline from the top. With Bitcoin down in the dumps, it would appear to be set up as a buying opportunity for true believers, though many of those have been discouraged by recent action both in and outside the crypto universe.

Would it be a better play right now to buy cryptos or stocks? With stocks stretched to within percentage points of all-time highs, it would appear to be less risky to engage in the crypto market. Despite efforts of regulators and government mouthpieces to spread fear, uncertainty, and doubt (FUD), Bitcoin is not going away, nor is the rest of the altcoin market. In Wall Street parlance, this would constitute a "buy the dip" opportunity.

However, the window could close quickly. As of this morning, Bitcoin is pricing in above $35,000. Buyers who caught the bottom yesterday morning are already up a solid 13%, not a bad gain for less than a day, and also illustrative of just how volatile cryptos are. Swings of five to ten percent in a single day are the norm rather than the exception. Meanwhile, Dow futures are hovering just below unchanged with an hour to go before the opening bell.

It's obvious that the Bitcoin trade would be both riskier and potentially more profitable than trading the Dow, or even playing with Dow options via the popular SPDR Dow Jones Industrial Average ETF Trust (DIA). A 13% gain on the Dow would put it above 39,000, an event unlikely to happen in a day or even this year, whereas another 13% gain in Bitcoin would put it also above $39,000, still $25,000 below its all-time high.

While there's little in the way of news to move the Dow other than next week's FOMC policy meeting (Tuesday-Wednesday), a major development occurred in the crypto space as El Salvador has become the first country in the world to approve Bitcoin as legal tender.

The national congress approved El Salvador President Nayib Bukele's proposal to embrace the cryptocurrency, voting 62-22 in favor of the move to create a law to adopt bitcoin as legal tender alongside the nation's current currency, the US dollar.

This is clearly a huge development for Bitcoin and also not something the central bankers of the world were expecting. Should the legislation clear other legal hurdles and what should be spirited opposition from the World Bank, IMF and other central bankers its use as legal tender would go into effect in 90 days, with the bitcoin-dollar exchange rate set by the market.

Under the law, bitcoin must be accepted by firms when offered as payment for goods and services. Taxes could also be paid in bitcoin.

Such is the world in which we live, one where the US dollar and Bitcoin sit side-by-side as legal tender. Surely there are those who will contend that it will never be allowed to happen, but, at the same time, Bitcoin loyalists will be rejoicing at the opportunity. If more countries take after El Salvador's bold initiative, it could send Bitcoin to levels unimagined by the stodgy central bankers.

It would behoove all investors to keep a close eye on this story as it develops. There are certain to be many twists and turns along the way over the next 90 days, creating extreme volatility in Bitcoin. Should El Salvador succeed in its quest to legitimize Bitcoin, it would be a watershed moment. Whether it does or not, the stage has been set for the eventual face-off between fiat currencies and crypto which will play out in various forms and market over the coming years.

At the Close, Tuesday, June 8, 2021:
Dow: 34,599.82, -30.42 (-0.09%)
NASDAQ: 13,924.91, +43.19 (+0.31%)
S&P 500: 4,227.26, +0.74 (+0.02%)
NYSE: 16,685.48, +0.34 (+0.00%)

Going Back Some Day, Come What May, to Blue Bayou

Tuesday, June 8, 2021, 8:20 am ET

Reinterpreting a classic song to fit the current financial narrative...

I feel so bad I got a worried mind
I'm so lonesome all the time
Since I left my baby behind
On Blue Bayou

CV-19 and lockdowns ruined your business.

Saving nickels, saving dimes
Working til the sun don't shine
Looking forward to happier times
On Blue Bayou

Stimmie checks and enhanced unemployment benefits didn't quite cut it. Plus, you live in a red state, so you had to go back to work.

I'm going back someday
Come what may
To Blue Bayou

Where the folks are fun
And the world is mine
On Blue Bayou

Where those fishing boats
With their sails afloat
If I could only see
That familiar sunrise
Through sleepy eyes
How happy I'd be

The new normal isn't very pretty. You long for a lifestyle you vaguely remember.

Gonna see my baby again
Gonna be with some of my friends
Maybe I'll feel better again
On Blue Bayou

Trump won. Everybody knows it, but fear and cowardice are preventing patriotic people from acting.

Saving nickels saving dimes
Working til the sun don't shine
Looking forward to happier times
On Blue Bayou

Janet Yellen believes inflation will be good for the economy. She's dead wrong, because servicing the federal debt will take up half of the budget, which is already out of control. Besides, without additional stimulus, Americans are mostly broke. When the mortgage and rent moratoria end, the world will see a vastly different picture.

I'm going back someday
Come what may
To Blue Bayou

Where the folks are fun
And the world is mine
On Blue Bayou

Life in America is likely to never be the same. Older folks recall the 60s and 70s, even the 80s, before the internet, cell phones, Wall Street, unrestricted federal government power, and mass surveillance took over our lives. There is no going back to happier times, come what may.

Where those fishing boats
With their sails afloat
If I could only see
That familiar sunrise
Through sleepy eyes
How happy I'd be

There is no salvation. Once government regulators and Wall Street got involved in cryptocurrencies, they began to dominate and kill that space, one that once offered freedom from fiat currencies and tax slavery, just as they have done with gold and silver. Tyrannical control over financial markets will meet an untimely end when the bond market implodes, mortgage rates kill off the housing market, and treasury auctions fail.

Oh that girl of mine
By my side
The silver moon
And the evening tide
Oh some sweet day
Gonna take away
This hurting inside

Once the bout of hyperinflation has destroyed the rest of what's left of the middle class, there will only be poor people and rich people. That's when the true nature of a global depression will become clear to many. Decades of exporting deflation via the US trade deficit are coming to a head. America now imports almost everything it needs. When the US dollar is no longer wanted nor needed by the rest of the world, the fiat era will come crashing down upon the heads of central bankers.

Well I'll never be blue
My dreams come true
On Blue Bayou

... and a stock market crash and simultaneous real estate crash will make just about everybody a poor person. Lots of formerly rich people will want to kill themselves. Some of them will.

Songwriters: Roy Orbison, Joe Melson

Roy Orbison (RIP) with an immensely talented group of artists from 'Black and White Night':

And here's Linda Ronstadt with a soulful version:

At the Close, Monday, June 7, 2021:
Dow: 34,630.24, -126.15 (-0.36%)
NASDAQ: 13,881.72, +67.23 (+0.49%)
S&P 500: 4,226.52, -3.37 (-0.08%)
NYSE: 16,685.14, -23.60 (-0.14%)

WEEKEND WRAP: Short Week Has Bitcoin Down, Stocks Up Marginally, Oil Near $70/Barrel

Sunday, June 6, 2021, 9:35 am ET

It was a short week on Wall Street, so this is going to be an abbreviated version of the WEEKEND WRAP.

Nothing of major consequence occurred during the week. The hacking of the world's larest meat processor turned out to be a real nothing-burger. The main stock averages all were higher, though by less than one percent. Bond prices were flat. Precious metals were beaten down after gains early in the week. Cryptocurrencies continued under pressure, an environment that will become more of the norm rather than the exception, now that Wall Street has embraced the space. It's less of a hug; more a kiss of death.

WTI crude oil gained more than $3.00 a barrel, from $66.32 to $69.37 by week's end.

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, shipping - often free - included):

Item: Low / High / Average / Median

1 oz silver coin: 34.00 / 51.00 / 41.64 / 40.00
1 oz silver bar: 34.75 / 59.95 / 43.37 / 41.00
1 oz gold coin: 1,950.00 / 2,099.58 / 2,050.19 / 2,050.16
1 oz gold bar: 1,965.00 / 2,094.47 / 1,999.47 / 1,994.99

The Single Ounce Silver Market Price Benchmark (SOSMPB) settled at $41.50 declining from a six-month high by more than $3.00.

At the Close, Friday, June 4, 2021:
Dow: 34,756.39, +179.35 (+0.52%)
NASDAQ: 13,814.49, +199.98 (+1.47%)
S&P 500: 4,229.89, +37.04 (+0.88%)
NYSE: 16,708.74, +76.40 (+0.46%)

For the Week:
Dow: +226.94 (+0.66%)
NASDAQ: +65.75 (+0.48%)
S&P 500: +25.78 (+0.61%)
NYSE: +153.09 (+0.92%)

Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine, Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine, Money Daily, its owners, affiliates and employees against any and all liability.


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