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Weekly Survey of Gold and Silver Prices

Single Ounce Silver Market Price Benchmark

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

PRIOR COVERAGE:

7/24-7/30/2022
7/17-7/23/2022
7/10-7/16/2022
7/3-7/9/2022
6/26-7/2/2022
6/19-6/25/2022
6/12-6/18/2022
6/5-6/11/2022
5/29-6/4/2022
5/22-5/28/2022
5/15-5/21/2022
5/8-5/14/2022
5/1-5/7/2022
4/24-4/30/2022
4/17-4/23/2022
4/10-4/16/2022
4/3-4/9/2022
3/27-4/2/2022
3/20-3/26/2022
3/13-3/20/2022
3/6-3/12/2022
2/27-3/5/2022
2/20-2/26/2022
2/13-2/19/2022
2/6-2/12/2022
1/30-2/5/2022
1/23-1/29/2022
1/16-1/22/2022
1/9-1/15/2022
1/2-1/8/2022
12/26/21-1/1/2022
12/19-12/25/2021
12/12-12/18/2021
12/5-12/11/2021
11/28-12/4/2021
11/21-11/27/2021
11/14-11/20/2021
11/7-11/13/2021
10/31-11/6/2021
10/24-10/30/2021
10/17-10/23/2021
10/10-10/16/2021
10/3-10/9/2021
9/26-10/2/2021
9/19-9/25/2021
9/12-9/18/2021
9/4-9/11/2021
8/29-9/4/2021
8/22-8/28/2021
8/15-8/21/2021
8/8-8/14/2021
8/1-8/7/2021
7/25-7/31/2021
7/18-7/24/2021
7/11-7/17/2021
7/4-7/10/2021
6/27-7/3/2021
6/20-6/26/2021
6/13-6/19/2021
6/6-6/12/2021
5/30-6/5/2021
5/23-5/29/2021
5/16-5/22/2021
5/9-5/15/2021
5/2-5/8/2021
4/25-5/1/2021
4/18-4/24/2021
4/11-4/17/2021
4/4-4/10/2021
3/28-4/3/2021
3/21-3/27/2021
3/14-3/20/2021
3/7-3/13/2021
2/28-3/6/2021
2/21-2/27/2021
2/14-2/20/2021
2/7-2/13/2021
1/31-2/6/2021
1/24-1/30/2021
1/17-1/23/2021
1/10-1/16/2021
1/3-1/9/2021
12/27/20-1/2/2021
12/20-12/26/2020
12/13-12/19/2020
12/06-12/12/2020
11/29-12/05/2020
11/22-11/28/2020
11/15-11/21/2020
11/8-11/14/2020
11/1-11/7/2020
10/25-10/31/2020
10/18-10/24/2020
10/11-10/17/2020
10/4-10/10/2020
9/27-10/3/2020
9/20-9/26/2020
9/13-9/19/2020
9/6-9/12/2020
8/30-9/5/2020
8/23-8/29/2020
8/16-8/22/2020
8/9-8/15/2020
8/2-8/8/2020
7/27-8/1/2020
7/20-7/26/2020
7/13-7/19/2020
7/6-7/12/2020
6/29-7/5/2020
6/22-6/28/2020
6/15-6/21/2020
6/8-6/14/2020
6/1-6/7/2020
5/25-5/31/2020
5/18-5/24/2020
5/11-5/17/2020
5/4-5/10/2020
4/27-5/3/2020
4/20-4/26/2020
4/13-4/19/2020
4/6-4/12/2020
3/30-4/5/2020
3/23-3/29/2020
3/16-3/22/2020
March 14, 2020
March 13, 2020
March 12, 2020
March 11, 2020
March 10, 2020
March 9, 2020
March 5, 2020
March 1, 2020

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July Non-Farm Payrolls (NFP) Blow Away Estimates; 528,000 Jobs Added; Wall Street Perplexed

Friday, August 5, 2022, 9:15 am ET

The last day of the week happens to also be the first Friday of the month, the regular date for release of the BLS Non-farm Payroll data. July's job gains are expected to be in a range of 250-260,000, slightly below the recent trend.

Acting as a ballast to the monthly jobs reports, the most recent data on initial unemployment claims came in Thursday at an eight-month high of 260,000 and was the 12th consecutive month that initial claims have exceeded 200,000.

An hour prior to the opening bell in New York, the July Non-farm Payroll report shockingly showed job gains of 528,000 added to the economy last month, with the unemployment rate falling to 3.5% from 3.6%.

Normally, a report like this would be met with rousing approval, but judging by stock futures, Wall Street is skeptical at best and angry at worst, considering this kind of good news - more jobs - to give the Fed more ammunition to raise rates higher and faster to slow the supposedly booming economy.

Futures fell off a cliff, from slightly positive to -144 for the Dow, -131 for the NASDAQ, and -31 for S&P futures, setting up a negative open for stocks.

Not only was the July figure a six-sigma beat of the estimates, but May was revised up by 2,000, from +384,000 to +386,000, June was revised up by 26,000, from +372,000 to +398,000. Thus, if a strong economy is what the government apparatus needs, they have it, to Wall Street's chagrin.

So far this week, through Thursday's closing bell, the Dow finds itself down 118 points, the NASDAQ up 329 points (2.66%), and the S&P up just 21 (0.52%). A large part of the "no recession" narrative favored by government imbeciles and media parrots happens to be the "strong labor market." There you have it.

For those with wide eyes, the continued pressing for a condition that is in contrast to evidence on the ground is a little like a fairy tale, wherein everything turns out for the best in the end. Unfortunately, for the story tellers, this may not be the case. Inflation is still running at a hot pace, with higher costs for food and energy - the non-core components - beginning to leak over into the general economy, though high inventories and a tapped-out consumer are acting as brakes on rising prices.

It's difficult to imagine jobs being created at such a rapid pace. Government statistics always being somewhat suspect, the BLS has been known to be a politically-motivated agency, seemingly delivering results that fit the climate on a regular basis.

Further evidence working agains the "right" thinking, having already begun to trot out stories about people using credit cards for everyday needs, the media seeks to soften the blowback from the eventual wave of defaults and bankruptcies that are bound to occur as the credit cycle reaches its peak. Rising interest rates at the Fed level are filtering down into credit card usage and rates. Credit card debt in the US rose by 13% in the last year, up by more than $100 billion. The average interest rate on credit cards has reached all-time highs, over 17%.

This adds up to nothing good in the short, medium or long term. With the Fed poised to increase the federal funds rate by at least another full point over the next three FOMC meetings, credit card interest will continue to rise as most cards are issued at variable rates tied to the fed funds rate. At the next meeting, in September, the FOMC plans to increase the rate by 50 to 75 basis points and add hikes of 25 basis points in November and December. The FOMC does not meet in August or October, so the Fed will have he opportunity to digest the data from two NFP reports (July and August) and also view a pair of CPI reports, the first of which - for July - will be released this coming Wednesday (August 10).

That data should be more than ample to guide the level of increase in the federal funds rate. In any circumstance, the cost of borrowing will rise, affecting not just credit cards, but also personal loas, HELOCS and home equity loans, auto loans, and short-term borrowing by small businesses. Already dicey, the national mood is likely to grow a bit more restless, especially if the price of gas at the pump does not continue falling.

WTI crude oil prices have continued to fall, a function of slowing demand (a direct function of high prices) and increased inventories. The Brandon administration will take full credit for getting gas prices down, their cynical goal to reduce the national average - currently $4.09 a gallon - to somewhere between $3.00 and $3.25 before the midterms in November. Already down nearly a dollar in less than two months, it is a possibility, especially with fuel demand usually lower as summer fades into fall. The next crisis will be over heating fuel, primarily natural gas, which remain stubbornly high at $7.95, more than double the 52-week low of $3.54.

While inflation remains a front-and-center issue, recession - which the US is in already, despite the denials - is going to become the dominant theme over coming months. With consumers struggling to pay bills, prices cannot remain high, lest the laws of supply and demand are somehow suspended. As the saying goes, "the solution to high prices is high prices." Eventually, things become unaffordable, and when those things are essentials such as food, energy, and shelter, a crisis emerges, such as is the case currently.

With today's July report, Americans should be content and unworried about the future. Everybody's working, or so we're told, but good news is now bad. Welcome of Clown World.

At the Close, Thursday, August 4, 2022:
Dow: 32,726.82, -85.68 (-0.26%)
NASDAQ: 12,720.58, +52.42 (+0.41%)
S&P 500: 4,151.94, -3.23 (-0.08%)
NYSE: 15,224.21, -42.95 (-0.28%)


Stocks In Rally Mode, Erasing Much of First Half Losses as Any News Works on Wall Street

Thursday, August 4, 2022, 9:03 am ET

Bad news must be really good news now, because Wall Street just can't get stocks high enough fast enough. Maybe another war or higher inflation will send stocks back to all-time highs, but, for now, the masters of the universe seem content to just buy, even in the absense of any dip, though Tuesday's did take a litte wind out of the sails for a mere moment.

Wednesday's wild rally was based on nothing in particular, earnings in general, momentum for certain. Since bottoming out on June 17 (29,888.78), the Dow has picked up nearly 3000 points, but is still down 10% on the year. Obviously, the blue chip index needs more juice. Wednesday's hump higher only managed to wipe away the losses from Tuesday, and if it seems suspicious that the Dow was down 402 on Tuesday and up 416 on Wednesday, it's probably because it is, and was always intended to just be a round-trip for gamblers making profits by doing almost nothing.

All of Wall Street and everybody in DC are just part of a wide criminal gang masquerading as banking elite and political representatives. What politicians in DC represent best are the donors to their campaigns, relentlessly awarding favors and cash for those who serve to get them re-elected over and over and over again. From stock tips to favored status in new legislation, the graft and corruption continues unabated. We should all be used to it by now, but somehow, some of us still pine for the good old days when treasuries moved a basis point here or there or not at all and stocks making a 1/2-percent move in a single day was cause for celebration.

Things have changed for the better for the upper class, while the United States crumbles to pieces. But, it's OK. Just buy more stocks and you'll be fine. In case you can't afford stocks because all your money goes for as and food, sorry, we're working on that... Not.

The Dow is not alone in making strides back toward 2022 highs. The NASDAQ is up 2,022 points since June 16 and is now down only 19.99% for the year. Off the low of 3,666.77 (June 16), the S&P 500 index has put back on 488 points for a 13% rally. It will open Thursday down just 13.4% for the year.

Meanwhile, earnings have come in choppy, to say the least, with some big winners (APPL, XOM, CVX, AMZN) and notable losers (META), which is down 50% on the year, but gained more than five percent on Wednesday.

Amazon (AMZN) trades like a trick yo-yo, most recently up from 122 to 137 after posting positive results for the second quarter. The stock is up 15% in just the past five sessions. Apple (AAPL) has made a continued rally from 130 on June 16 to a close of $166.13 on Thursday, but remains down 8.72% year-to-date.

ExxonMobil (XOM) and Chevron (CVX) have had nice runs due to the high cost of energy, with XOM up 43% on the year, despite dropping from 104 to as low as 83 over the past two months. It's currently nestled in at 91, but oil remains under pressure, acting as a brake on earnings. Chevron shows a similar pattern, up 30% on the year, but well off its high of 181 from June 8, to its current price of 155.36.

The hits keep coming to Wall Street in the form of good news, bad news, or any news, all serving to push the indices higher... until the eventual reality bite.

Thursday morning, the Bank of England announced a 50 basis point hike to their main interest rate and initial unemployment claims in the US hit an 8-month high at 260,000, the 12th straight week above 200,000. Tomorrow's non-farm payroll report for July will not include the 200 WalMart corporate employees being laid off, but there are growing signs that mass layoffs are on the way, which will no doubt send stocks higher, since lower payrolls mean bigger profits.

July NFP is expected to be in the range of 250-260,000 new jobs for the month.

Come on, get with the program...

Bad is the new good. The recession has been cancelled.

At the Close, Wednesday, August 3, 2022:
Dow: 32,812.50, +416.30 (+1.29%)
NASDAQ: 12,668.16, +319.36 (+2.59%)
S&P 500: 4,155.17, +63.98 (+1.56%)
NYSE: 15,267.16, +104.46 (+0.69%)


About Those (Wildly Fluctuating, Inverted) Treasury Yields, Gold, Silver; Latest From Brent Johnson, Dollar Milkshake

Wednesday, August 3, 2022, 8:45 am ET

On a regular basis - every Sunday - Money Daily posts some tables detailing week over week changes in the treasury yield market, covering the entire curve, from 1-month bills out to 30-year bonds.

Normally, there are swings in the yields one way or the other, but they are generally not dramatic, though they have become more and more extenuated in recent months, especially now that the Federal Reserve has committed to slaying the inflation dragon by raising rates at every FOMC meeting since March. Thus, 15 to 20 basis point moves in any direction on any maturity have become more common over the course of a week's time.

What's been happening lately, however, is something quite a bit more startling. Yields - and, inversely, prices - have taken to wild daily swings, such as Tuesday's tantalizing, low to high rise of 22 basis points on the five-year note (the Fed's own end of day tables have it moving a mere 18 basis points, from 2.66% to 2.85%, but that's just a matter of who's counting). The market for five-year debt is enormous, so it takes a huge push somewhere to move it to that degree - nearly 1/4% - in a single day. Of course, the five-year note's yield did not advance in a vacuum. Everything nearby gushed higher, with the shorter maturities rising the most.

On an end-of-day basis, the seven-year note gained 16 basis points (2.82%), the 10-year, 15 (2.75%), while the three-year was up 20 basis points (3.02%), and the two-year higher by 16 (3.06%). And, yes, all of those yields, in fact, from 6-months (3.00%) out to seven years are all higher than the 10-year note. That is inversion to the extreme. Most of those yields are higher than the 30-year, which closed out Tuesday at 3.00%, itself adding eiht basis points on the day.

Why all these yields on longer-dated maturities blowing out is a matter, as usual, of considerable conjecture. One would assume, with Nancy Pelosi angering the Chinese via her visit to Taiwan, that people would have rushed to bonds for safety. The exact opposite was the case, except for the shortest maturities, 1, 2, 3, and 6-month bills, which barely budged.

Date 1 Mo 2 Mo 3 Mo 6 Mo 1 Yr
08/01/2022 2.22 2.33 2.56 2.96 2.98
08/02/2022 2.22 2.33 2.56 3.00 3.09

Date 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
08/01/2022 2.90 2.82 2.66 2.64 2.60 3.12 2.92
08/02/2022 3.06 3.02 2.85 2.82 2.75 3.22 3.00

That would make sense, as protection was sought at the very near-term margin as tensions heated up in China's backyard.

The bigger picture, dismissing the Pelosi-China standoff as just more theater, had investors fleeing bonds as well as stocks, gold, silver, and probably anything else directly redeemable for US dollars.

Sure enough, the dollar index rose from a low of 105.23 on Tuesday to a high of 106.52, a solid move with lots of support, meaning the Fed was likely behind the action, and in front of it, inside it, over it, in all ways controlling it. The Fed is absolutely the biggest buyer and seller of debt, and, via proxies like the Exchange Stabilization Fund (ESF), currencies. Plus, they have allies, like the ECB, BOJ, Bank of England, etc.

Particularly troubling, though, is the magnitude of the daily swings that are now becoming more common across the treasury curve. The US treasury market is supposed to be the most stable in the world, but, as one astute observer noted, "it's acting more like a penny stock." This is not supposed to happen, except when markets are under stress. One would assume, then, that other than there being no recession and inflation under control, there was some stress in markets on Tuesday, and on other days in which wild swings were experienced.

Nancy Pelosi? Don't kid yourself. She's not that important no matter what she thinks of herself. There's a lot more going on "under the hood" that we all are not privy to and those issues are moving yields in strange and mysterious ways. The debt market moves all the others, and Tuesday's ramp in treasuries just may be presaging a move higher for the dollar, and lower in stocks, precious metals and commodities. A rush to cash just doesn't come out of the blue. There's a reason for it, likely a liquidity matter.

For more perspective, the video below from Goldcore.com's Dave Russell features Brent Johnson of Santiago Capital, providing some insight and a glimpse of what the future may hold. It's long - 25 minutes - but worhtwhile, especially Johnson's nutshell explanation of his "Dollar Milkshake Theory" and rationale for owning gold, silver, and dollars.

At the Close, Tuesday, August 2, 2022:
Dow: 32,396.17, -402.23 (-1.23%)
NASDAQ: 12,348.76, -20.22 (-0.16%)
S&P 500: 4,091.19, -27.44 (-0.67%)
NYSE: 15,162.68, -123.33 (-0.81%)


First Inflation, Then Recession, Depression, as Europe Falls Apart, US, China Housing Markets Stumble

Tuesday, August 2, 2022, 7:47 am ET

Nancy Pelosi, US Speaker of the House, is set to land in Taipei, Taiwan at 11:20 am ET (10:20 pm, local time) on a plane loaded with other House members, staff, a few reporters and crew.

China has issued a number of statements and threatening videos on social media, suggesting that Pelosi's visit will have consequences. Markets were little moved by the seeming collision course between two of the world's great powers, probably because nothing of huge importance will happen directly before and during her visit. It's what happens afterward that has attracted the attention of investors, because China has never been prone to knee-jerk reactions, no matter how serious the issue.

Pelosi's visit will be recorded in the memory banks of China's leadership and broadcast loudly to the citizens, amping up the anti-US rhetoric, the drumbeat for war growing louder. A similar condition will manifest in the United States. "Pelosi good, congress good, China bad," will be the mantra barked out by the lapdog media in an attempt to distract from the real threats emerging in the economy and society.

Since the government and media is going to insist that, despite rather convincing data to the contrary, there is no recession in the US, lumping a war with China atop the already lost proxy war with Russia in Ukraine, is to be expected from the government that can't shoot straight, talk straight, nor deliver much in the way of hope for a struggling population. They are best at spending, taxing, grifting, and lying, not necessarily in that order.

If two consecutive quarters of contraction in GDP isn't enough to convince the people "running" the country that conditions are recessionary, perhaps three or four will offer better perspective. The insane policies, shifting narratives, outright lying and underlying structural economic problems are sending the world economy over the recession cliff, straight into a global depression.

While the stock market got a reasonably good bounce in July off of June's lows, it does not appear to be sustainable against a background of slowing productivity, growing social unrest, advancing unemployment, and a demographic shift that has upwards of 10,000 Americans retiring every day with scant quality replacement value from the up-and-coming generations.

As of late, economic data has been spotty at best, dismal at worst. Just yesterday, Germany reported retail sales for June fell a record 8.8% with inflation running at 8.5%. China announced that housing sales dropped 39.7% in July from the same period last year. At the same time, people with unfinished homes have stopped paying their mortgages and are demanding refunds from developers across the country. The developers are defaulting on bond payments, exacerbating China's housing and imminent economic implosion.

While Germany and most of Europe's economies were already toast and starting to burn, China has been trying to contain its own developing disaster under cover of Covid lockdowns and heightened tensions over Taiwan. Their economy is cratering, rapidly.

The US isn't far behind in the race to fall off the economic cliff, though the government and media are trying their best - on a level with Chinese propaganda, the world's best - to shield the public from the unfolding realities.

First and second quarter "not a recession" contractions and dismal first half on the stock market aside, the US housing market is beginning to show signs of stress. A report by analytics firm, Black Night Inc. (BKI) shows growth in home prices decelerating at the fastest pace since the 1970s. This comes as interest rates for 30-year fixed rate mortgages peaked at 5.54%, but since have backed down, to around 5.15%.

Still, higher interest rates for mortgages are driving up the cost of new home ownership just as inflation is near a peak and the country's mainstream economy is slowing. Even Treasury Secretary Janet Yellen admits that the economy is slowing and says that is good (why?), though she's a serial recession-denier in line with the rest of the tone-deaf administration.

Just in case the brain trust in Washington DC needs a reminder about economic reality, Money Daily is providing it's own proprietary definition of a depression, as follows:

A sustained period of sub-par economic growth lasting more than two years, punctuated by unlevel periods of contraction and expansion.

According to that definition, which is in line with the experience of the 1930s Great Depression, the US depression may have already started in late 2019 or early 2020. A more cynical view would suggest that it began in 2007 with the onset of the Great Financial Crisis and sub-prime disaster.

Award-winning author and economist, James Rickards, believes we're headed into another great depression.

According to Rickards: "The best definition of a depression ever came from John Maynard Keynes in his 1936 classic The General Theory of Employment, Interest and Money."

Per Keynes then, depression is "a chronic condition of subnormal activity for a considerable period without any marked tendency either toward recovery or toward complete collapse."

Rickards goes on to say, "I've maintained that the United States has been living through a New Great Depression that began in 2007..."

Hard to argue with his logic, when the long term growth trend in GDP is around three percent, whereas "growth in the U.S. from 20072013 averaged 1% per year. Growth up until 2020 was only marginally higher," according to Rickards.

With Tuesday's opening bell in the US approaching, overnight, Asian stocks were pounded, down between 1.4 and 2.4%, with the China's Shenzhen Index leading the way, lower by 2.37%, the Hang Seng down 2.36% and Japan's Nikkei down 1.42%. Europe is beginning to feel the pain, with major indices off less than one percent, but declining as of this writing.

US stocks look to open lower. Dow futures are down 200 points, NASDAQ futures off 100, and the S&P mini down 27 points.

WTI crude oil fell below $94/barrel on Monday and is under pressure again this morning. Gold is closing in on $1800/oz, with silver lagging. Silver's expected explosive move may come later, once gold reaches a range of $1850-1890.

There's currently a lot on the table for such an inept top level US government to handle efficiently or effectively. Congress and the Brandon administration don't appear to be up to the task at hand.

At the Close, Monday, August 1, 2022:
Dow: 32,798.40, -46.73 (-0.14%)
NASDAQ: 12,368.98, -21.71 (-0.18%)
S&P 500: 4,118.63, -11.66 (-0.28%)
NYSE: 15,286.01, -41.70 (-0.27%)


WEEKEND WRAP: The Fed Raises, Government, Media Say There Is No Recession; Gold, Silver Advance, Offering a Divergent Perspective

Sunday, July 31, 2022, 10:18 am ET

Definitions don't matter and the US economy is strong. At least that's what the public is being told to believe this week. Ukraine is defeating the Russians, all's well in Europe, and high food and energy prices are good for you (especially if you're a shareholder of Exxon Mobil (XOM) or Chevron (CVX).


Stocks

For the second straight week, stocks powered ahead, posting the best gains since 2020 for the NASDAQ and S&P. Making gains on two consecutive weeks has happened only twice this year prior to this event (three times for the NYSE Composite), so the moves came as more welcome relief for battered bulls.

As the first month of the third quarter and second half came to a close on Friday, the major indices have recovered from June bottoming. For the year-to-date, the Dow is only down 10.22%, the NASDAQ remained the worst of the bunch, down 21.74%, with the S&P off by 13.89%, and the Composite lower by 11.02%.

Those figures are a far cry from the June, when the S&P slumped to below -22%, the textbook definition of a bear market, but, since old definitions have been cast aside of late, the actual percentage losses don't really matter, especially after two straight quarters of negative GDP is no longer a recession.

The week's highlights were the Fed's raising of the federal funds rate by 75 basis points and the 2Q GDP reading of -0.9%, following 1Q's -1.6% result. The United States is not really in a recession. Really, we're not, so says Janet Yellen, Jerome Powell, Joe Brandon, and a slew of financial media outlets.

Whatever it is, it certainly doesn't feel quite right. New claims for unemployment insurance hit a high note for the year at 286,000, the 11th consecutive week that reading has been over 200,000... and counting. Yet, the plebeians are told we have a strong job market. That premise will be tested this coming Friday morning when July non-farm payroll data is released.

While the economy lurches from one crisis to the next and stocks surge on every data drop or earnings report, the coming week offers a delightful assortment of second quarter earnings hits or misses, as outlined below.

Monday: Devon Energy (DVN), Pinterest (PINS), Avis Budget Group (CAR)

Tuesday: Uber (UBER), Caterpillar (CAT), British Petroleum (BP), Marriott (MAR), AMD (AMD), PayPal (PYPL), AirBnB (ABNB) Gilead Sciences (GILD)

Wednesday: Moderna (MRNA), UnderArmour (UAA), CVS Health (CVS), Generac (GNRC), Yum Brands (YUM), Marathon Oil (MRO)

Thursday: Alibaba (BABA), Kellogg's (K), ConocoPhillips (COP), AMC Entertainment (AMC), Warner Bros. Discovery (WBD), Carvana (CVNA)

Friday: DraftKings (DKNG), Goodyear (GT) Western Digital (WDC)

There are many, many more companies reporting this week, the height of earnings season.


Treasury Yield Curve Rates

It's pretty obvious that the Fed, as the major buyer in the treasury market, is attempting to squash the yield on the 10-year note, the benchmark of the yield curve. Falling from 2.77% to 2.67%, the 10-year remained inverted (lower) against 6-month, 1-year, 2-year, 3-year, 5-year, and 7-year yields.

This is inversion to the extreme, either by purpose or accident, and, since there are no accidents concerning the Fed and the economy, the purpose is somewhat unclear. Every maturity other than the 1-month (up seven basis points, 2.22%) and 30-year (flat, 3.00%) was bid this week, with the 7-year down the most, from 2.85% to 2.70%.

By continuing to buy up buckets-full of bills, notes, and bonds - the Fed's treasury holdings have increased from $2.5 trillion in February 2020 to $5.7 trillion presently - the Fed has effectively cornered the market and can move rates in whatever direction they desire.

So, why then the inverted curve and why the focus on the 10-year? A couple of cynical possibilities emerge.

First, the Fed is trying to avoid an outright recession (epic fail) as the rates mainly tied to credit cards and auto loans are the 3-year and 7-year, respectively fell 10 and 15 basis points. The 10-year yield is tied to mortgage rates, which fell dramatically this week, from 5.54% to 5.13% for a 30-year fixed loan, Wednesday through Friday.

It's a safe bet, however, that rates on auto loans and credit cards are going up, due to the Fed's 75 basis point hike from Wednesday. The picture is murky, with lots of moving parts. There's also the contention that the Fed has to keep rates in a tight, low range to ease the burden on the US debt. Every little hike costs the federal government more in interest payments.

The second scenario would suggest the Fed has lost control of the treasury market and that a major recession is on its way if not already underway, which is the most distinct probability, since all federal officials are downplaying the recession signals. It's kind of a mess and one that isn't going to be resolved easily.

Date 1 Mo 2 Mo 3 Mo 6 Mo 1 Yr
07/01/2022 1.27 1.68 1.73 2.52 2.79
07/08/2022 1.57 1.92 1.98 2.68 2.96
07/15/2022 1.98 2.26 2.37 2.94 3.12
07/22/2022 2.15 2.29 2.49 2.97 3.01
07/29/2022 2.22 2.28 2.41 2.91 2.98

Date 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
07/01/2022 2.84 2.85 2.88 2.92 2.88 3.35 3.11
07/08/2022 3.12 3.14 3.13 3.16 3.09 3.53 3.27
07/15/2022 3.13 3.14 3.05 3.03 2.93 3.34 3.10
07/22/2022 2.98 2.93 2.87 2.85 2.77 3.23 3.00
07/29/2022 2.89 2.83 2.70 2.70 2.67 3.20 3.00


Oil/Gas

The price of a barrel of WTI crude oil rose this week, from $94.70 to $98.30, Friday to Friday, and while the gain was substantial, it may not have been significant, as the price remained under $100 for the seventh trading day running. Oil has been trending lower for nearly the past two months. It reached a recent high on June 8, at $122.11, down 19.50% over that period.

Gas at the pump has been continuing lower and lower, this touted as a major accomplishment by the Biden administration, failing to point out that while the national average is down recently, it's up more than a dollar from a year ago and about $1.80 from when Joe Brandon entered the White House in January, 2021. So, for all their claims of helping out the consumer, their policies clearly wrecked them prior to their latest ploys.

Currently at $4.20, the US national average is down 14 cents from $4.34 a week ago and 65 cents from $4.85 a month ago. That's some relief, especially in the Southeast, where prices have all fallen well below $4.00 a gallon, the lowest in South Carolina, at $3.70. A bunch of states, including Kentucky, Florida, Wisconsin, Iowa, Missouri, and Ohio have joined the sub-$4.00 club, but the Northeast remains elevated at $4.30 and higher, while California, Oregon, Washington, and Nevada remain above $5.00.

How long the relief will last is not known, as the Ukraine/Russia situation is yet unresolved and sanctions on Russian gas/oil by the EU have yet to be fully imposed. They are due to completely halt all Russian gas and oil by the end of the year, and government leaders are racing to find alternatives. The US will not be as negatively affected by the full ban, though it continues to be an exporter, harming its own citizens.

There are plenty of oil "experts" saying that all manner of fossil fuel is going to be much higher as summer turns to fall and fall to winter, but they've been known to be radically wrong and talking their book in the past, so there's simply no good reason to rely on any of their predictions.


Bitcoin

Bitcoin continued to surge during the week, topping out at over $24,000, currently nestled at $23,791.70. There have been notable gains over the past month, as the price rose from a low $18,948 on June 18, and this recent burst merely followed the NASDAQ, which remains a problem.

Bitcoin may have lost all of its charm and independence since Wall Street got involved with a number of tracking ETFs and it may never fully recover. Presently, it's nothing more than a token trade with extremely high risk, as is the rest of the crypto universe. "Fools and their money" may be the appropriate sentiment.


Precious Metals

Gold price 06/24: $1,828.10
Gold price 07/01: $1,812.90
Gold price 07/08: $1,740.90
Gold price 07/15: $1,706.50
Gold price 07/22: $1,725.30
Gold price 07/29: $1,782.70

Silver price 06/24: $21.13
Silver price 07/01: $19.86
Silver price 07/08: $19.24
Silver price 07/15: $18.66
Silver price 07/22: $18.49
Silver price 07/29: $20.34

The past two weeks have been salad days for gold and silver investors as the prices for both metals showed significant gains on the COMEX and the LBMA spot market. These recent moves may prove to confirm that a bottom has been plumbed. When gold closed at $1700.20 on July 20 and silver ended the day of July 14 at $18.23 could turn out to be prices not seen again for quite a long time, though with the wild swings in the economy and global tensions at threatening levels, prices could plummet as they did in 2008 and again in 2020.

Where precious metal prices head next or further into the future depends largely upon the fate of the COMEX and LBMA. After the London Metals Exchange (LME) nickel debacle of March 8 - which started a rowdy decline in both gold and silver - the basic premise and functioning reality of gold and silver price suppression may have been altered permanently. That is the opinion of British commodities trader and whistleblower, Andrew Maguire, along with similar views from legendary silver analyst Ted Butler and Mike Maloney, whose series, "Hidden Secrets of Money" is one of the world's great works on economics ever published, in any form.

GoldMoney.com's Alasdair Macleod regularly provides probing insights into economics, money, and, especially, precious metals. As head of his firm's research department, he provides a weekly "must read" column for serious investors and novices alike.

Macleod's most recent column, "Month end bear squeeze" is a brief, poignant commentary on the global condition.

Money Daily doesn't often tout experts in any field or asset class, but this quartet deserves mention and continued attention, their deep insights into money and metals among the best the world has to offer. The planet would certainly be a better place if these fellows were heading the Fed, Treasury Department, Exchequer, or other high level economic posts than the obtuse Keynesian lapdogs occupying them currently.

The gains this week and last were of such violence and quality that it's difficult to imagine them not being part of a larger move higher, possibly one for the ages. If gold and silver price suppression is truly at the beginning of the end, expect precious metals prices to continue higher for an indeterminate amount of time. While gold and silver investors share a well-deserved high level of suspicion and anxiety concerning the free trading of their favored investment class, there is little doubt that current global conditions are begging for change.

The battle royal between the dastardly proponents of the World Economic Forum (WEF) headed by the notorious Klaus Schwab and the combined forces of the BRICS nations - Brazil, Russia, India, China, South Africa - has at its focus the ongoing devastation of Ukraine, but the economic conflict is approaching a global precedent.

With its thumb on the people and governments of developed nations in the EU, British Commonwealth, and the United States through pandemic lockdowns and climate change rhetoric, the WEF threatens imposition of harsh, neo-fuedal tyranny and a continuance of the fiat currency regime. The BRICS, headed by Russian President, Vladimir Putin, together represent 3.21 billion people, or about 41.5% of the world population, and, notably, they are major producers of precious metals and other valuable resources.

Putin's June 22nd announcement that the BRICS were working on developing a new global reserve currency sent shock waves through the deeper veins of the economic community worldwide. Should their serious endeavor produce fruit, the ramifications would be monumental, changing the dynamics of politics, economics, and societies around the world. The world may very soon be witness to a bi-polar or multi-polar economic event on the level of the 1944 Bretton Woods agreement or Nixon's closing of the gold window in 1971.

Gold and silver are likely to be great beneficiaries of any great change in the world economy. The recent gains may be just the start of a true free market in gold and silver and another nail in the coffin of fiat currencies.

Oddly enough, the price of an ounce of silver rose by exactly 10% over the course of the past week. That's just weird... but delightful.

Here are the latest 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: 29.70 44.99 35.92 34.19
1 oz silver bar: 29.00 40.00 34.65 34.00
1 oz gold coin: 1,859.59 1,937.29 1,890.82 1,879.32
1 oz gold bar: 1,840.93 1,909.90 1,859.83 1,850.40

The Single Ounce Silver Market Price Benchmark (SOSMPB) rebounded from last week's multi-month low, to $34.69, a gain of 75 cents from the July 24 price of $33.94.


WEEKEND WRAP

Wall Street has once again turned bad news into good, a time-worn tactic for selling corporate ownership certificates to the rubes who buy stocks. Meanwhile, the bounce off the bottom in gold and silver, while ostensibly a similar directional move, offers a distinctly different perspective in terms of global economic understanding and future concerns.

Pundits and officials in the Biden camp and at the Fed pointlessly echoed each other's talking point that there is no recession in the USA, despite obvious data refuting their propaganda. Where the world heads from here and how individuals and businesses either benefit or are impaired depends greatly upon perspective, leading to actions. There has rarely been a time at which viewpoints and opinions ran in opposite directions as the current one. The world, it seems, is breaking apart at various seams and fissures.

Longer term investing will be affected in no small way by short term events. While this environment may be a traders' paradise, everything, from sovereign nations to the peace and security of individuals and families, are at risk.

At the Close, Friday, July 29, 2022:
Dow: 32,845.13, +315.50 (+0.97%)
NASDAQ: 12,390.69, +228.09 (+1.88%)
S&P 500: 4,130.29, +57.86 (+1.42%)
NYSE: 15,327.71, +128.90 (+0.85%)

For the Week:
Dow: +945.84 (+2.97%)
NASDAQ: +556.58 (+4.70%)
S&P 500: +168.66 (+4.26%)
NYSE: +536.92 (+3.63%)


Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., 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 Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2022, Downtown Magazine Inc., all rights reserved.

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