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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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Friday, August 2, 2024, 9:24 am ET
Don't wish too hard for what you want The quote above aptly applies to Wall Street incessant yearning over the past two years for a weak economy, spikes in unemployment and any bad economic news that might prompt the Federal Reserve to lower interest rates, thinking that would spark a rally in stocks. Well, with Thursday's ISM reading of 46.8 and initial claims for unemployment the highest in 11 months, at 249,000 for the week ending July 27, the street blues singers at the New York Stock Exchange may be getting exactly what they wanted. In spades. The trouble with all this hoping and pushing on strings for bad things to produce good results is that the market often works in mysterious ways, thwarting the hopes and desires of the greediest people on the planet, who pine for economic collapse so that they can become even wealthier. Most of the titans of the trust and hedge fund crowd will fare well as markets implode. They're fortunate enough to be billionaires, or even lowly multi-millionaires, after all. The people who will suffer the most are the usual suspects, the poor, the middle class, the working stiffs who pay through the nose for everything from car and home insurance to chicken parts to feed their kids. Thursday's surprise dip came after Meta Platforms (META), Mark Zuckeberg's tool useful for spying on the toilers, laborers, vacationers, and grandmothers on the platform, posted solid results for the second quarter and helped the major indices get off to another rip-roaring start. The narrative changed radically at 10:00 am, when the Institute for Supply Management (ISM) posted their bleak results, stating, without restraint, "Economic activity in the manufacturing sector contracted in July for the fourth consecutive month and the 20th time in the last 21 months..." The report pegged Manufacturing PMI at 46.8%, the lowest in nine months (November, 2023, 46.6). Here are just a few of the headline takeaways:
Atlas didn't shrug at the news, his knees buckled. Stocks began a descent into what appeared to be a bottomless abyss, and still may be, now that the July Non-Farm Payroll report from the BLS has confirmed that the U.S. economy is a shadow of its former self and Bidemomics, whatever it may be, hasn't worked, as the unemployment rate rose to 4.3 percent in July, and non-farm payroll employment edged up by a mere 114,000, well short of expectations and the lowest number of job gains since December 2020. And, like clockwork, the BLS revised the last two months lower. The change in total nonfarm payroll employment for May was revised down by 2,000, from +218,000 to +216,000, and the change for June was revised down by 27,000, from +206,000 to +179,000. Unemployment, at 4.3%, outside of the pandemic years (2020-21), is the highest since September, 2017, and, while still historically low, how it is calculated consistently understates the reality on the ground, in the streets and in vacant office towers in major cities across the country. Futures, which were already down mightily before the 8:30 am ET payrolls release, were absolutely crushed. Dow futures decline by 550 points, NASDAQ futures puked 510 points and S&P futures fell by more than 100 points. On the flip side, gold, on the COMEX continuous contract, had already registered a record all-time high overnight at $2,511.20, psiked a little more, checking in at $2,520.70 minutes after the NFP report. Even silver got the nod, hitting $29.31, but still well below its all-time high from 2011 near $50/ounce, because, as everybody knows, central bankers hate and fear silver in the hands of ordinary citizens being used as currency because they know it is unbeatable. The euro, yen, and pound are soaring against the U.S. dollar. Overnight, in Tokyo, the Nikkei, which was already down more than 10% from recent highs, ripped off another 5.81%, or 2,216 points, dropping to levels last seen in February. European stocks were all down, though not as severely, most less than one percent, except for Germany's DAX, which fell about two percent before magically rebounding. France's CAC-40 was already in correction and continued lower. Crude oil continued its slide, dipping to $74.63, approaching February lows and back into correction territory. All that remains after Friday's expected bloodbath is for Jerome Powell to step out from behind the curtain and announce an emergency rate cut, which will complete the cycle of pump-dump-repump for the hedgies and sharpies who haven't already leapt to their deaths from 60 floors high (we're hopeful). Friday's cash session ought to be historic. Word has it that the PPT and Exchange Stabilization Fund are already geared up for a stick save. Here's Peter Allen performing "Don't Wish Too Hard":
At the Close, Thursday, August 1, 2024:
Thursday, August 1, 2024, 9:24 am ET Prior to the stock market open on Wednesday, Money Daily saw futures pointing towards a "moon shot" open, and that is exactly what happened, with all the indices taking off right out of the gate and extending through to the 2:00 pm ET FOMC policy nothing-burger statement that kept rates at current levels (5.25-5.50%). The Fed's statement offered few clues as to what was planned for the next FOMC meeting on September 17-18, though Wall Street remained convinced that Chairman Powell and his cohorts would cut the federal funds rate by 0.25% at that time. There exists the distinct possibility that nothing such as what Wall Street expects will occur. The Fed has not signaled that it has sufficient data to support a rate cut in September, beside doing so would raise eyebrows as to the Fed's insistence at being apolitical. There is probably a better chance that if the Fed cuts at all this year, it will be after the election, at either the November 6-7 or December 17-18 assemblage. That way, the Fed can rest its reputation on being forthright and not in the least politically motivated. If such a scenario develops, Wall Street plungers would likely throw an extremely damaging hissy fit, sending stocks plunging to levels last seen in March or April. We're talking 5,000 to 5,250 on the S&P, and somewhere in the neighborhood of 15,500 to 16,000 on the NASDAQ. Not that those are truly big declines, but they may prove to be only the start of a deeper dive after the market's exceptional performance thus far in 2024. Should the Wall Street crowd be proven right about a September rate cut, it could spark another leg to the already over-extended rally that's been in place since late October, 2023, like a pimple on a bubble. The truly humorous thing about suggesting political motivation by the Fed is that a September rate cut would supposedly benefit the incumbent, who is presently Joe Biden, though he's committed to (among other things) not running. Instead, any bonus points would fall to his successor in the presidential bonanza, Kamala Harris, though it's difficult to perceive how Jerome Powell or any of the Fed voting members would consider a Kamala presidency to be anything but a complete monstrosity of ineptitude. One would rather postulate that the Fed would like to see some degree of sanity and fiscal responsibility out of whomever wins the White House, to say nothing of the spendthrifts in congress. It is those people who are making the Fed's task of taming inflation all the more difficult via their reckless spending proclivities. The Fed will have plenty of data to digest between now and September. And while Powell did say that a September rate cut "could be on the table," isn't that tantamount to a homeless slob saying he might be dining at the Waldorf next week? "Could" is not the same as "will," just as anything could be on the Fed's September table, including a stubborn CPI or PCE index. While it's nice to think that the Fed will return to a more accommodative stance after a full year at the holding steady on the highest federal funds rate in 23 years, but from a purely consumerist perspective, what's so good about two percent inflation anyway, especially after it had been running as hot as nine percent recently? The Fed, with all their high-sounding rhetoric about doing what's right in terms of their dual mandate - stable prices and full employment - has failed miserably on one of those fronts, that being price stability. If prices continue to rise, even at the measly measure of 2-2.5%, there's no coming back from that and the resulting price spiral would likely whirl out of control within months. What the Fed should really be looking for - given they are actually concerned about Joe and Jill's paychecks - is outright deflation, not the sissy "disinflation" which translates to prices not rising as rapidly as they had been. A Fed rate cut in September would be the ideal reason to call for an end to its charter as the country's central bank. By any reasonable standard - taking into account that the government's figures on just about anything are skewed and willfully inaccurate - the U.S. economy is running at stall speed while prices continue to go up for all the essentials: food, energy, housing, education, health care, insurance. Unless conditions change dramatically between now and mid-September, a rate cut would be a policy error of extraordinary magnitude. But, hey, stocks are up, Meta Platforms announced this morning that they beat their numbers for the second quarter, and everybody's happy, right? So how come gold is stretching back towards another all-time high? Dollar debasement is an insidious tax on everybody and the Fed knows it. Are they willing to risk their reputations on the wishes of Wall Street hucksters? Just this morning the Labor department said initial claims for unemployment were the highest in 11 months, at 249,000 for the week ending July 27. Better cut quick, Jerome. Full employment, ya know.
At the Close, Wednesday, July 31, 2024:
Wednesday, July 31, 2024, 9:09 am ET As Keith Olbermann, back in his more lucid days as a co-host of ESPN's "SportsCenter", often quipped, "if you're scoring at home, or even if you're alone...", making sense of the market's trends and travails as companies report second quarter earnings has been a challenge thus far. Later today, with the Fed set to announce that it is leaving rates right where they've been for the past year, the market's current assessment of the situation appears to be one of supine assumption of higher rates for just a little longer, perhaps September, when, as if by magic, inflation will be a fleeting memory, the issues of commercial real estate and upside-down regional banks all but resolved, and the presidential election a matter of little consequence. Ka-boom! Stocks to the moon. As another ESPN TV personality, Lee Corso, of college football pre-game fame, might be led to retort, "not so fast, my friend." The NASDAQ suffered through another round of pistol-whipping on Tuesday, dropping another two percent (down to 17,015) before being miraculously rescued by recurrent dip-buyers, who seem to know exactly when to step in and buy at the bottom. That morning-long selling spasm lasted all the way through to 1:00 pm New York time, was abruptly stopped and stock buyers went into an afternoon frenzy that eviscerated nearly 200 points of losses before the final five minutes of trading brought back some sense to the day's wild ride. Dow stocks did better, posting a half percent gain. Even the S&P received little more than a flesh wound. It's tough to keep up. One might need a program to keep the tallies from wracking one's brain. Fortunately, there was Microsoft's (MSFT) second quarter earnings release after the close to ease the pain, and Starbucks (SBUX). Even though MSFT mostly hit their numbers and SBUX missed estimates, the trade was to sell the former and buy the latter. Go figure. Wednesday morning, Mastercard (MA) and KraftHeinz (KHC) reported in-line or better results. Naturally, everybody has to own some of both. Even Boeing (BA), poster child for airplane crashes and the shoddy manufacturing that has become a trademark for U.S. industry, was being bought, thanks to the company's announcement that former Rockwell Collins CEO Kelly Ortberg would become its new president and CEO on August 8th. Huzzah! Never mind that the airline company reported revenue of $16.9 billion vs. $17.46 billion estimated per Bloomberg while posting an adjusted loss per share of $2.90 vs. $1.82 estimated, for a core operating loss of $1.392 billion. Shares are up 2.5% in pre-market trading. Eventually, there's some shade being thrown by Humana (HUM), which posted earnings, adjusted for non-recurring costs, of $6.96 per share, topping Wall Street expectations of $5.89 per share, on average. Humana expects full-year earnings to be $16 per share, but, apparently that's not enough for Wall Street sharpies. Shares are down nearly eight percent prior to the open. Maybe they should have mentioned "AI" more often during the conference call. Earlier, ADP released its payroll report for July, noting that private employers added 122,000 jobs during the month, the takeaway headline saying job creation edged down as pay gains continued to slow. As everybody who's been following the ups and downs of the market, that bit of bad news is actually good news for the rate cut fanbois. Weakness is strength. Ignorance is wisdom, and all that Orwellian logic in play. So, despite the NASDAQ dropping eight percent over the past three weeks, stock futures Wednesday morning are looking for a moon shot. NASDAQ futures are up more than 390 points a half hour before the bell. S&P futures, +68; Dow futures, +105. Who's up for end-of-month window dressing? Heck, even gold, silver, and oil are up. As the late, great Jackie Gleason, who captured the essence of pool shark Minnesota Fats near perfectly in the classic film, "The Hustler" (Ed. Note: Americans are not allowed to watch solid, well-made classic movies any more. Nowadays, they're fed a steady diet of superheroes, black-ish diversity, and drag queens), and who never - as far as is known - appeared on ESPN, but did have his own TV show, might say, "and away we go!"
At the Close, Tuesday, July 30, 2024:
Tuesday, July 30, 2024, 8:42 am ET Earnings are going to be front and center this week as the Fed's FOMC is almost certain to stand pat on interest rates, keeping the federal funds target rate at 5.25-5.50%, where it has stood for one year. Companies reporting prior to the opening bell on Tuesday include SoFi (SOFI), PayPal (PYPL), Pfizer (PFE), British Petroeum (BP), Proctor & Gamble (PG), Merck (MRK), Corning (GLW), Jet Blue (JBLU). After Tuesday's close: AMD (AMD), Microsoft (MSFT), Starbucks (SBUX), Pinterest (PINS), Caesars (CZR), Electronic Arts (EA). Obviously, Microsoft's earnings - and to some degree, Starbucks - will drive after hours trade and also impact Wednesday's futures along with the following reporting before the bell Wednesday morning: Norwegian Cruise Lines (NCLH), Boeing (BA), Altria (MO), KraftHeinz (KHC), Humana (HUM), Mastercard (MA). Now that investors are shying away from the big tech names, stocks are likely to be under some pressure. However, given the current environment and the sneaking suspicion that there is big money underpinning some stocks and entire indices, pressure on stocks can be resolved as not going up as much as they have been. Two of the more astounding situations involving individual stocks have taken place over the past few days and concerned Dow components, 3M (MMM) and McDonald's (MCD). On Friday, 3M reported second quarter earnings that were improved over the prior quarter and against the same period a year ago. IN terms of the year-ago figures, in June 2023, the company lost nearly $7 billion, missed EPS projections, reporting earnings per share of $1.39, thanks to some fast and loose adjustments, one-time items, and other accounting gimmicks. In the most recent quarter, June, 2024, the company turned in a profit of $1.15 billion on EPS of $1.95. While the improvement was palpable and tradable, 3M stock soared from $103.40 at the close Thursday to $128.30 at the final bell Friday, helping the Dow to one of its best one-day gains of the past two years. Shares of 3M were up an astonishing 22% on the day. Analysts attributed the big win to leadership and comments from William Brown, 3M Chief Executive Officer, who is seen as the person primarily responsible for turning the company around. It should be noted that 3M has been around for a long time. This is not some fly-by-night tech start-up. It was founded in 1902. To assume that a new CEO can turn this bulking corporate ship around to the tune of a 20% immediate hike to the share price is sheer lunacy and reeks of desperation, momentum-chasing, and institutional pumping and dumping. Incidentally, 3M was down 1.57% on Monday and is lower pre-market Tuesday. Let the dumping begin! McDonald's (MCD) was the headliner prior to the open on Monday, and the company released a second quarter report akin to farting in a crowded elevator. They missed top and bottom, revenue of $6.49 billion, missing estimates, beating the prior quarter but lower than same period a year ago. Adjusted earnings of $2.97 also came in lower than the $3.07 expected. Shares of MCD were up 3.74% on Monday. That kind of performance simply does not compute. McDonald's serves something roughly resembling food at inflated prices to people who can't afford much else. Their $5 "value" meal, put into play a month ago, is being hailed for brining in better foot traffic, though the meal itself - McDouble cheeseburger or McChicken sandwich, small french fries, four-piece Chicken McNuggets and a small soft drink - doesn't really offer much value or nutrition. Nonetheless, investors were more than willing to pump this overpriced Goliath on the assumption that ignorant consumers would willingly part with $5 to get items they could have bought for $4 a year ago. OK, so Wall Street investors are desperate, delusional, and willing to engage in slime-ball tactics while ignoring fundamentals. Nothing new there. As the opening bell approaches on Tuesday, Pfizer (PFE) reported adjusted income of 60 cents per share on $13.28 billion in second-quarter sales. A year ago, the company earned 67 cents a share on $12.73 billion in sales. That's right, more volume, lower profits, the same story being told by company after company in the S&P 500. Shares are up slightly in the pre-market. Merck (MRM), a rival to Pfizer, and maker of drugs Ketruda, Gardasil, and Jenuvia and other life-and-wallet-sucking prescription meds, reported second quarter EPS of $2.14, as opposed to a $2.35 loss a year ago, attributable largely to acquisition costs. The company lowered its 2024 forecast. Wall Street doesn't like it, sending shares down more than two percent in the pre-market. Bucking the overall trend, PayPal (PYPL) is up nearly eight percent pre-market after they beat estimates for the second quarter handily, raised guidance and boasted quarterly total payment volumes increased 11% year-over-year to $416.8 billion. Investors have - for whatever reasons - been sour on PayPal for some time, the share price dropping from above $300 in July 2021 to a recent low of $50. The company produces profits quarter over quarter, so there's been something else afoot with this stock. Peter Thiel haters, a la the Elon Musk effect? They're a weird bunch, these Wall Street hucksters. U.K.-based oil giant BP PLC said Tuesday it will reward shareholders to the tune of $7 billion this year through the purchase of its own stock, even as it reported a near 30% decline in profits in the first half of 2024. Shares are flat prior to the open. Finally, Proctor & Gamble (PG), maker of Tide detergent and other household consumer non-durables, soiled itself, earning $1.40 per share, beating estimates of $1.37. The company said it expects to repurchase $6 to $7 billion of common shares in fiscal 2025, while admitting it is unable to raise prices as consumers scale back on everything from food to diapers to cleansers. Wall Street is punishing the company to the tune of a 5.5% decline in the share price. So, geez, after runaway inflation the past two years, Wall Street is now unhappy that companies can't squeeze more FedBux out of strapped, uneasy consumers? Say it ain't so! There's a huge reckoning coming to Wall Street, though it could be delayed until after the election. Stocks continue to be overpriced, mis-priced, misplaced, and investors misguided as institutions try unloading to unsuspecting retail investors and fund managers. What's been in the cards the past few weeks is just the opening act of a longer, sad drama. Meanwhile, WTI crude wallows near six month lows. Gold and silver are rebounding slightly, the vix is rising, the dollar is up against the euro and pound, and Japan is el toastado. It's really quite the show. Wednesday, and the 2:00 pm ET non-move by the FOMC will be even more stupendously stupid. Anybody for month-end window dressing? Unabashedly, Yahoo! Finance says the quiet part out loud, proclaiming that stocks that miss their targets are being bought, their share prices rising. And yesterday, while nobody in particular was paying attention, the U.S. government debt pushed past $35 Trillion.
At the Close, Monday, July 29, 2024:
Sunday, July 28, 2024, 11:57 am ET A volatile week for stocks ended with a dead-cat, knee-jerk rally that lifted the Dow from negative to positive for the week and limited some of the damage on the S&P and NASDAQ, which lost ground for a second straight week. Next week is the busiest of the summer in terms of earnings announcements with 40% of the S&P 500 releasing second quarter reports. Macro events include the JOLTs report, European June CPI, central bank meetings in Japan (BOJ), England (BOE), and the U.S. (FOMC, Tuesday, Wednesday, July 30-31, capped off with Friday's July Non-Farm Payroll report.
Since peaking on July 10, Mag 7 stocks have lost $2 trillion in combined market cap and that was where the bulk of the selling occurred, in tech stocks, after Tesla (TSLA) turned in a disappointing second quarter report and Alphabet (GOOG) hit most targets but underperformed on Youtube advertising. Tesla lost 20 points Friday to Friday, just less than 10%, so the hit was mostly cosmetic, while Alphabet slid just more than 10 points, or six percent. Others in the Magnificent 7 basket - Amazon, Apple, Microsoft, Meta, and Nvidia - were all down lesser amounts and smaller percentages, with Amazon the best of the bunch, down less than one point. More important were the losses over the past two weeks, which were more substantial. While the Dow has posted weekly gains four consecutive weeks, the S&P and NASDAQ have been lower the past two straight. While there's reason enough to believe that the tech mini-correction may have been overdone and some believe over with as of Friday, there's ample rationale to believe that it is only getting started. Events of the week ahead will offer more clarification, and there are pitfalls and hurdles ahead for stocks. The mid-week FOMC rate policy decision is almost certain to be another standstill event, the eighth straight, with the Fed keeping rates at 5.25-5.50% since July of 2023. The statement may provide clues to when the Fed will cut, if at all, though probably very little will be offered to give the rate cut cadre much more hope. July's Non-farm payroll report is likely to provide better direction. Job gains have been sparse the past few months, with 206,000 reported for June, though last month, total non-farm payroll employment for April was revised down by 57,000, from +165,000 to +108,000, and May was revised down by 54,000, from +272,000 t0 +218,000. The unemployment rate has picked up to 4.1%, still historically low. Another move higher in the rate and job gains below 200,000 will encourage the rate-cut favoring bulls, as bad news is still considered good news to them. With no FOMC meeting in August, September is widely assumed to be when the Fed will lower the federal funds rate 25 basis points, though there is still a degree of uncertainty there. The Fed, insistent that it is apolitical, could do itself a world of good by just standing by until after the election. Doing so would push any moves past the election, with the next FOMC confab on November 6-7, and the final 2024 meeting on December 17-18. There's any number of schools of thought on this, the most prominent saying two cuts (September, November) or no cuts until January, 2025. No matter what the fed decides, it's not likely to have much impact in either direction. Th economy seems to be stumbling along. The first estimate of second quarter GDP came in at double the rate of the first quarter, at 2.8%, though that figure seems a bit on the hopeful side and it's likely to be revised lower, as just about every government figure has been the past few years. While tech stocks were hardest hit last week, Friday saw two monster earnings reports, the one from 3M (MMM) the most impactful, especially on the Dow. 3M gained 23% on the day, a move hertofore unheard of in a Dow component, though it was probably aided to some degree by insiders and nefarious stock pumpers. Bristol-Myers Squibb (BMY) also issued a positive report and was rewarded with an 11 percent boost to its stock price. Though not a Dow component, BMY added to the jubilant mood ending the week. Quarterly reports will be hot and heavy next week. Here's a partial list: Monday (before the bell): McDonald's (MCD), Philips (PHG), Provident Bank (PROV); (after the close): F5 (FFIV). Tuesday (before): SoFi (SOFI), PayPal (PYPL), Pfizer (PFE), British Petroeum (BP), Proctor & Gamble (PG), Merck (MRK), Corning (GLW), Jet Blue (JBLU); (after): AMD (AMD, Microsoft (MSFT), Starbucks (SBUX), Pinterest (PINS), Caesars (CZR), Electronic Arts (EA). Wednesday: (before) Norwegian Cruise Lines (NCLH), Boeing (BA), Altria (MO), KraftHeinz (KHC), Humana (HUM), Mastercard (MA); (after): Meta Platforms (META), Arm (ARM), Qualcomm (QCOM), Carvana (CVNA), Lam Research (LRCX). Thursday: (before): Moderna (MRNA), Wayfair (W), SiriusXM (SIRI), Toyota (TM), Crocs (CROX), ConocoPhillips (COP); (after): Amazon (AMZN), Apple (AAPL), Intel (INTC), Roku (ROKU), Draft Kings (DKNG), Coinbase (COIN), Snap (SNAP). Friday: (all before): ExxonMobil (XOM), Chevron (CVX), Frontier Comms. (FYBR). Corporate reports may have more impact than government data in the week ahead, and quarterly reporting is usually a positive for stocks, though expect more volatility as the VIX, which was shut down to 16.39 on Friday, was as high as 18.42 just a day earlier. The VIX appears headed toward and bayond 20, which is assumed to be quite hot. Considering all the factors, between geo-politics, elections, and the economy, that would not be a surprise.
Bonds and notes rallied on the week, particularly the two-year note, which stole the show by dropping 13 basis points in yield. With the 10-year note losing just five basis points and the 30-year bond staying neutral at 4.45%, dis-inversion was twisting itself into shape, with 2s now nine basis points lower than 30s, but still 16 higher than 10s. Meanwhile, 5s and 7s are now below 10s (normalizing), with the three-year note equal in yield to 10s (4.20%). If the Fed ever decides to cut rates, it won't be by much, considering how squeezed the yield curve has become. Spreads are approaching flat-line status, with 2s-10s at -16, the highest its been since October 27, 2023, the precise date upon which the current stock market rally began. Full spectrum is at -104, barely moved from last week. What this means in terms of the entire curve is a flattening out in the case of rate cuts. Figure on a maximum of 100 basis points to be cut by the Fed over the next six to eight meetings (through July 2025). Cutting the federal funds rate from 5.25-5.50% down to 4.25-4.50 over a year's time is not going to please the rate cut horde, nor will it be particularly good for stressed-out bankers. It's tough to make a buck in banking when the entire yield curve is less than, say, 50 basis points, but that appears to be where this is headed, with 30-day bills at somewhere between 4.00% and 4.75%, the 10-year note at around 4.35 to 4.65, and the 30-year note maybe pushing 5.00%. At best, that would be upwards-sloping, though barely, and surely not enough to inspire confidence in long-term bonds. Additionally, the U.S. Treasury will find itself in the unenviable quandary of having to borrow at somewhere over four percent, pushing the interest on the $35 trillion government debt upwards of $1.4 trillion, making it the biggest single government outlay besides social security. (Incidentally, the national debt is now $34.970 trillion, so it will go beyond $35 within days.) Such a scenario screams recession, or at least shouts stagflation, but this is the corner into which the Fed has painted itself. Either that, or investors lose all confidence in longer-term treasuries, which then zoom to levels not easily imagined, like six or seven percent. Neither scenario looks particularly pleasant. Spreads:
2s-10s
Full Spectrum (30-days - 30-years)
WTI crude oil was whipped around all week, but mostly lower, eventually ending close to the bottom of the week's range, at $76.44, a sizable drop from least week's New York close of $78.60, the lowest price in seven weeks (June 7, $75.53). Summer travel and the recent heat wave are abating or done as July morphs into August, the Dog Days. Soon enough, it will be back to school, with the coincident seasonal decline in the price of oil. Oil and gas production are at extremely strong levels globally, and especially in the United States. OPEC+ retains lower quotas, particularly the leading producers, Russia and Saudi Arabia. Despite their efforts to crimp supply, demand remains slack, and there's little anyone can do about that except lower prices, which now appears to be the dominant direction. Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump at $3.50 a gallon, a slight increase over last week, but still within the recent range. Prices at the pump are easing in many parts of the country, rising in others. California remains #1 in the U.S. at $4.62 a gallon, near the lowest price in more than six months. Prices eased in Pennsylvania by another three cents, to $3.61, the Keystone state remaining the price leader in the Northeast. New York is close by at $3.59, followed by Connecticut ($3.55) and Maryland, Massachusetts, and Maine, all at $3.48. Prices in the Midwest continue to rise, with Illinois, up a whopping 13 cents, to $4.03, much of the price due to taxes. Mississippi continued with the lowest prices in the country, back down again this week to $2.93, and the only state in the U.S. under $3.00, which has been the case for the past month, until this week as Louisiana checks in at $2.98. Tennessee is next at $3.02, followed by Arkansas and Oklahoma at $3.08. Texas ($3.04) is in the midst of the remaining Southeast states ranging from $3.09 (Alabama) to $3.15 (South Carolina). Georgia ($3.31), and Florida ($3.38) went in opposite directions, with Georgia dropping. The Midwest ranges between lows in South Dakota and Kansas ($3.18), to highs of $3.79 in Michigan, most in a range between $3.28 and $3.40. Missouri is down, at $3.22; Ohio, up another 10 cents, at $3.58. Arizona held steady at $3.45 and remained below $4.00 for a 12th straight week, leaving only California and Washington ($4.20), joined this week by Illinois above the $4.00 level. Oregon was seen at $3.91 and Nevada at $3.92, both down sharply. Utah was stable ($3.51) along with Idaho ($3.54), both on a slow, steady decline in price.
This week: $67,684.30 Bitcoin bounced around all week, moving higher, off a low of $64,833 on Thursday, to a high of 69,235 Saturday afternoon. Week-over-week it was somewhat flat.
Gold:Silver Ratio: 86.67; last week: 81.70 Per COMEX continuous contracts:
Gold price 6/28: $2,336.90
Silver price 6/28: $29.43 Gold was up and silver down, now for the third straight week. The smackdown from a week ago appears to have been little more than a hand-slap in the gold market, and silver prices have not fallen much at all, thanks largely to excessive premiums. Buying remains brisk in both metals. The onslaught of a mania is approaching with all due alacrity. There's likely to be some wild price swings over the months leading up to the elections in November, but support looks pretty solid for gold at $2,300, and silver at $27.50-28.00. Unforeseen events could push these prices even lower, though considering demand levels, prices shouldn't stay down for long. Targets of $2,700 for gold and $35.00 for silver may be a little hopeful, though they could very well get there, depending quite a bit on global conflicts, especially Ukraine and the Middle East.
The Single Ounce Silver Market Price Benchmark (SOSMPB) fell ever so slightly over the course of the week, to $39.60, losing just 16 cents from the July 21st price of $39.76 per troy ounce. Prices didn't really change very much on ebay or at dealers. One-ounce gold coins are still fetching around $2,500, with numismatics ranging higher. Silver is still upwards of $31 just about everywhere.
If this week was considered volatile, what lay ahead may make it look like a walk in the park in afterthought, with a load of government data, earnings reports, and more election rhetoric figuring to heat up the week ahead.
At the Close, Friday, July 26, 2024:
For the Week:
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