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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.
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Stocks Lower Since End of July; PPI Comes in Hotter than Expected Friday, August 11, 2023, 9:05 am ET Just glancing at closing prices on the major exchanges, one might assume Thursday was a dull day on Wall Street. One would assume incorrectly. After the ill-regarded Bureau of Labor Statistics (BTW: Why does the BLS calculate CPI? The Consumer Price Index has little to do with Labor.) released the July CPI, markets turned red-hot, with futures soaring into the opening bell. The euphoria lasted less than an hour. By 10:15 am ET the major indices were selling off. Incidentally, the churning of the Dow continued apace, with the index of 30 stocks up some 445 points in early trading. By the close, it would give up almost all of those gains. So, after CPI showed inflation heating up again for the first time in 13 months (well, duh), stocks spent the remainder of Thursday's session selling off, a rather commonplace occurrence this August. While the majors are a mixed bunch for the week, the bigger picture, going back to July 31, shows that when the calendar page was turned, so was market sentiment.
Here's where the major indices stand on the week, through Thursday's close:
Here are the closing prices on the 31st of July and the gain/loss through Thursday's close: Clearly, despite the Dow's intra-day swings of 200, 300, or 400+ points every day in August since the 1st (8 sessions), the direction has been decidedly downward. An aside on the churning of the Dow: What is happening is nothing new, though it is mischievous and rather sleazy. Dow stocks are experiencing distribution, i.e., long-term holders are selling, by-and-large. The brokerages and banks are likely making hay by bidding up stocks with client money, then selling the firm's stocks at the top. After getting the Dow to nose-bleed levels with a run of 13 straight positive sessions from July 7 through the 26th, the streak was closed out on the 27th, but three more days of gains put the Dow at its high for the year, closing at 35,630.68 on August 1st. Since then, up, down, up, down, all the while the index losing ground overall. Every rally is being sold into, and the losses happen very quickly. If you're holding certain Dow stocks and they're way up since early July, you may be about to become a classic bag-holder. There's nothing nice about Wall Street's trading regimen and retail clients usually end up on the losing side, besides being the brunt of many bad jokes amongst brokers and dealers. Friday's data dump is the July PPI, which increased 0.3 percent in July, seasonally adjusted. On an unadjusted basis, the index for final demand advanced 0.8 percent year-over-year. This was worse than expected, so futures began declining right after the release, paving the way for a negative open and possibly a sorry end to the week. In any case, stocks seem to have changed trajectory since the start of the month. Further declines should be expected after stocks were red-hot through the first seven months of the year. Overnight, Asian stocks were lower. European indices were down, especially the FTSE, off by more than one percent and falling further, midday. Meanwhile, Kazakhstan is calling. Take the quiz. Only 11 days to the BRICS summit...
At the Close, Thursday, August 10, 2023:
Thursday, August 10, 2023, 9:22 am ET Nothing had more influence to markets than the July CPI reading on inflation, which was released by the BLS at 8:30 am ET. CPI for July rose 0.2% month-over-month, and increased 3.2 percent for the 12 months ending July, slightly more than the 3.0 percent increase for the 12 months ending in June. Core inflation, which strips out food and energy, rose 0.16% for the month, but fell to 4.7 percent from a year ago, a figure that is unlikely to sit well with the Fed, which needs outright disinflation to consider their interest rate hiking a success. It's clearly not happening, even though the number continues a steady decline. There's ample evidence that inflation has not yet been wrung out of the US economy, especially with crude oil and gasoline prices rising in July and even more so in August. The chart provided by gasbuddy.com is instructive. According to the BLS, gas prices are down 19.9 percent from a year ago, though their data may be somewhat misleading since prices last July were falling rapidly, while this July they were rising, especially at the end of the month. Unless gas at the pump settles or declines through the end of August and into September, that 19.9% decline from a year ago is going to look something like -2.5 percent or even add to inflation if prices continue to rise. Thus, one has to take into account a forward-looking prospectus, factoring in rising prices in food, housing (the main contributor to the July gains), energy, and services, which continue to see an upswing. That's why stock futures rose initially on this morning's release, but have been tempered by the future outlook, which is suggesting inflation returning as summer turns to fall, oil supply remains stretched and gas prices continue to at least moderate at current levels or rise. At the end of the discussion which will play out in markets today and through Labor Day, a consensus may be emerging that the Fed may just hike interest rates again in September, fending off what they believe to be a re-emergence of inflation or that the "sticky" part of the equation, housing, food, and energy, remain stubbornly high. Regardless of CPI forward readings, everything costs more than it did a year ago, two years ago, and beyond, while wages have not kept pace until recently. Outside the inflation argument, there's also a valuation issue. Just how high can stocks climb in such an environment before companies are forced to make cost-cutting a primary factor in their profit calculus? After the July jobs number was such a disappointment, August figures may be even worse. Today's unemployment report adds to that consideration, as initial claims jumped this week from 227,000 to 248,000. The employment outlook imposes a certain degree of uncertainty to an already disconcerting inflation and general economic condition.
At the Close, Wednesday, August 9, 2023:
Wednesday, August 9, 2023, 9:04 am ET Strange as it may seem, after wiping away all of last week's losses with a Monday buying spree, Dow stocks gave it all back again in the first hour of trading on Tuesday, then proceeded to buy it up again through the end of the session. In prior days, when markets actually functioned properly, this would be considered "churning," a term, much like "painting the tape", "spoofing", or "naked shorting" that describes an activity that is technically illegal. However, since there is no longer any oversight, much less enforcement, except in those rare cases in which the government collects a big fine in return for essentially looking the other way, these and other sleaze-ball tactics are standard practice for the big boys these days. Wall Street has always been a bit on the greasy side, but lately it's become as much a cesspool of corruption, graft, bribery, and lawlessness as the gang in Washington, DC, that it's honestly difficult to report objectively on events that occur in the business culture. Asking the obvious, how does one actually invest in such an environment? Wall Street firms use other people's money (OPM) to float out their trade ideas, often taking the other side of the same trade with company bucks. When the trade goes bad, the client takes the loss, Goldman Sachs, JP Morgan, or Merrill Lynch takes the profit. To believe that the big brokerages protect their clients is about as naive an outlook as thinking congress works for the people. Neither has any fiduciary responsibility. They work for themselves, lining their pockets with your money. Wall Street operators care about commissions, profits, and bonuses. Politicians only care about getting re-elected. They are parasites. They steal the wealth of others. It's hardly surprising that regular people in America don't care about any kind of atrocity any more. Bio-lab in California. Check. Millions of illegals crossing the Southern border. Check. Stolen elections. Check. Fake prosecutions, train derailments, bribe-taking, 10% for the big guy, check, check, double-check. It's all standard operating procedure now. Everybody looks the other way. There is a problem with that line of reasoning. Eventually, officially-sanctioned criminal behavior affects everybody. High prices for food and gas are not accidental. Propagandist media did not just emerge from out of the blue. Big cities turning into third world hell-holes isn't merely the result of poor planning and even poorer policy. All that's contributing to the destruction of the United States of America has been planned, plotted, and implemented over many years, decades, in fact. If you like your government and your stocks, you can keep your government and your stocks. In the meantime, those who are truly awakened (not "WOKE") will be stocking up on land, food, water, energy, seeds, gold, silver, guns, and ammo. Time is running out. Anyhow, a boatload of banks got downgraded on Tuesday. Disney (DIS) reports after the close Wednesday.
At the Close, Tuesday, August 8, 2023:
Tuesday, August 8, 2023, 8:04 am ET Monday was a great day for stocks in the Dow Jones Industrial Average (+407.51), erasing the entire previous week's losses (-393.67). Rational people - the few remaining on the planet - look for cause and effect in events. If, for instance, a plant in a garden dies (effect), the gardener looks for a cause. Was it bugs, bad soil, uprooted by an animal, etc.? Something caused the plant to die. What was it? So, when stocks careen one way or another, there should be some cause associated with it. On Monday, the cause was difficult, if not impossible, to detect, but, early Tuesday morning, Fox News, on one of their hourly radio spots, said the gains on the Dow were due to "strong earnings," which is odd, because no Dow stocks reported earnings Monday morning. The two notable companies - not Dow components - that did report were Berkshire-Hathaway (BRK.B), which gained 3.60% on the day, and Tyson Foods (TSN), which reported very poor second quarter earnings and fell 3.83% on the day. What's odd about Tyson Foods are a couple of things - actually, quite a few things, but a few stood out. Tyson is the nation's largest food producer in the country. They reported sales of beef and pork down, and sales of chicken up. That makes sense, since most people gasp at the price of beef these days and pork's a little high, so a lot of people are buying chicken, which is still priced reasonably. This is where it gets interesting and maybe even confusing. Remember the egg shortage last year, supposedly caused by having to cull the chicken population because of an outbreak of some avian virus? Oddly enough, when eggs were going for $4 and $5 a dozen, the price of chicken never budged. Chicken, be it whole chickens, thighs, legs, quarters, breasts, etc., could be purchased before, during, and after the "outbreak" and culling of flocks at roughly the very same prices. If the number of chickens (inventory, supply) was down, why wasn't the price (demand) higher? OK, maybe just laying chickens were killed. Chickens raised for eating were not. Maybe. Sounds like bulls--t. Let's leave it at Tyson wasn't selling enough chicken, had excess inventory and the virus story was just a cover to make more money on eggs. Ugh! Fast forwarding to Monday, when Tyson said chicken sales were up, their response was to close four chicken processing facilities. That really doesn't make sense. Anybody who's been in business for even a short period of time knows that when sales of any product line are up, the proper response is to produce more and cash in on increased volume, supposing profits are being produced at good margins. The people at Tyson apparently see it differently. People are buying less beef and pork, but more chicken, so, let's pull back the chicken supply, and, supposedly, raise chicken prices, prompting people to buy more beef and pork. This is what passes for capitalism these days. Most people call it price gouging. Truth of the matter is like oil prices, which go up or down on supposed supply and/or demand when in reality there is always more than enough to go around, Tyson, being a monopolistic type of company, having excess supplies of beef, pork, and chicken wants people to buy their foods at higher prices because, you know, inflation. In other words, You people just aren't eating enough! Honestly, most people won't buy sirloin steaks at $12.95 or $14.95 a pound, just as they won't buy rib-eyes at $24 a pound or some other absurd number, but Tyson, being an integral part of the inflation industrial complex, has to keep you thinking there's a shortage of beef, because, you know, cow farts are killing the planet, so let's not raise more cattle. Pigs? Who knows? Bottom line is Tyson Foods, like most big corporations, is not friendly to American consumers. They want you to buy their most expensive products and then STFU. Well, that discussion went fairly sideways. Getting back to Monday's gains on the Dow, the other strange thing about Tyson stock is that at the open, it was down nearly 10% (51.00) from Friday's close (56.46). It rose all day, closing at 54.30. That's some fancy loss-trimming right there.Still, Tyson is unrelated to the 30 stocks listed on the Dow Jones Industrial Average, so there had to be some other cause for the Dow to rebound in such a manner, but, there isn't, other than, well, stocks need to go up on Mondays and/or somebody at the NY Fed's trading desk (in Chicago) had his or her finger stuck on the "buy" button all day. It's all OK, though. Approaching 8:00 am ET, stock futures are diving, with Dow futures off 250, NASDAQ futures down 131, and S&P futures off 35 points.
At the Close, Monday, August 7, 2023:
Sunday, August 6, 2023, 10:00 am ET Some cracks in the foundation of the bullish narrative that's persisted since last November began to emerge this past week, as the major equity indices tumbled and bonds of longer maturity were being disposed of post haste. After the Bank of Japan sloppily executed an expansion of the upper limit for their 10-year bond, the US government was unceremoniously downgraded by Fitch, joining Standard and Poor's at a notch below AAA. That created a headache not just for the Treasury Department, but for fund managers, some of which are contractually bound to purchase only AAA-rated bonds. Fitch's downgrade prompted some short-term, knee-jerk selling, especially in the 10-year note and 30-year bond, both of which saw yields blow out to as high as 4.20% and 4.32% respectively, before paring some of those losses on Friday. Even with the Friday dip-buying in long-dated treasuries, yields are well beyond what one would expect from a supposedly strong economy and a Federal Reserve that has inflation under control. The poor showing in July's non-farm payroll result (+187,000 jobs) and the rapidly-rising price of oil put the lie to the narratives as mostly wishful thinking rather than owing to prudent policy. Official government policies and data points have become the butt of jokes recently, to the point that comparisons are being made to communist China and the former USSR. At the same time, US government is a shambles, its ability to function in a reasonable, constitutional manner and project confidence are lost on the collection of loonies and misfits the administration has appointed to cabinet posts as well as the weak-kneed, compromised congress which seems capable of investigating every small detail except Joe Biden. With impeachable offenses appearing on an almost daily basis, Republicans in congress can't seem to muster up enough will or courage to take down the worst president in the country's history... and there have been some bad ones. For their part, Democrats are content to ride the gravy train for as long as it goes. The level of non-accountability at the federal level has likely surpassed crisis conditions. Political arrogance and an open distaste for any kind of meaningful legislation brand the current congress as classic disingenuous maligerers, fakes, grandstanders, bribe-takers, grifters, sophists, and louts. This collection of over-aged maroons masquerading as protectors of democracy are an insult to the American people, who deserve much better representation than is being afforded. Continuation of this kind of maladaptive deception leads in only one direction: toward overwhelming rejection of leadership by the general population. America is truly on the brink of disaster in terms of governance.
With the busiest earnings week of the current season now a thing of the past, there are lessons to be learned. Foremost, the winning stopped rather abruptly with the NASDAQ and S&P down four of five sessions last week and the Dow lower the last three. Corporate earnings have by and large been beating lowered expectations, but year-over-year comparisons for many companies are falling short. Post-earnings gains don't last. Profit-taking can occur at the drop of a hat, triggered by even the slightest signs of weakness, like lowering guidance or slip-ups during conference calls. Accountancy at the Wall Street level being somewhat more art than practice, the truest picture of a company's health might be easily hidden behind walls of numbers and calculations, in footnotes, or buried deep within the bowels of a 10-Q. Earnings per share are nowadays reported in aw form, but accepted in "adjusted" figures. However valid or otherwise quarterly and annual reports have become, they're still regarded as forthright by analysts and trading desks. Wall Street's resilience is partially reliant on the veracity of quarterlies. The rest is hope, expectation, sentiment, and greater fool theory. There's a lot of crowding into favorite stocks, as recently witnessed by the recent NASDAQ special rebalancing, as market breadth had become slim, mostly focused on a handful of select tech stocks. More and more, however, attention is being paid to more fundamental issues like profit margins, balance sheets, and cash flows as valuations reach extremes. It is when valuations are priced to perfection that bean-counters and quants begin unearthing troublesome metrics, shaking investor confidence. With a run-up like the most recent one, there's a huge propensity for mean reversion, especially nearing the end of a calendar year, as is approaching. Funds like to lock in profits sooner, rather than later, and, if enough are driven to pare down positions to lock in gains at once, the potential for a cascading sell-off intensifies. With issues piling up, the rump of the earnings season begins on Monday. Here's a brief list of the reporting companies to watch: Monday: Tyson (TSN), Berkshire Hathaway (BRK.B), Biontech (BNTX), Palantir (PLTR), Chegg (CHGG), Paramount (PARA). Tuesday: Barrick (GOLD), Novavax (NVAX), UPS (UPS), Eli-Lilly (LLY), AMC (AMC), Rivian (RVN), Marathon (MARA). Wednesday: Wendy's (WEN), Penn National Gaming (PENN), Roblox (RBLX), Disney (DIS), Wynn Resorts (WYNN). Thursday: Ralph Lauren (RL), Six Flags (SIX), Yeti (YETI), Alibaba (BABA), Pagaya (PGY). Friday: New York City Reit (NYC), Air Canada (ACDVF), Soho House (SHCO).
The US treasury market, reliably the most robust and heavily-traded of any sovereign bond issuance, has been under siege for the past 18 months, but this week exhibited signs of real stress, perhaps not seen since the gold standard was smashed back in 1971. Inflation, seen declining to three percent via the CPI data, may be about to re-emerge, the contributing factors being dents in the yen carry trade, US credit downgrade, and oil prices rapidly advancing. During the week, the 10-year note rose to a yield of 4.20% on Thursday, a dangerous level. The pushback on Friday may provide some short-term relief, but it does seem to be, using the Fed's terminology, "transitory," at best. Spread on 2s-10s continued to correct, down to -73 basis points, from -93 last week. The complete curve (1-month - 30-years) is inverted by 133 basis points, also an improvement from -144 last Friday (July 30). Should the curve dis-invert and return to whatever passes for normal these days, it would likely mark the end of the Fed's inflation fight, with loosening policy coming over the transom, chasing recession fears. Looking out six months, to February of 2024, the Fed's tightening policy might be over and done, though a resumption of inflation could make any pauses or pivots unlikely. As is usually the case, the Fed will get some things wrong, especially in terms of timing. Routinely behind the curve, so to speak, the Fed's response almost always is too late, and, often incorrect as regards depth and immediacy. At the base of all Fed action is preservation of the US currency reserve status, which seems to be slipping through their overactive fingers. So long as the Fed is committed to fiat, bank lending and economic progress will be close to nothing.
After rising a full $10 in July, WTI crude oil tacked on another $1.97, gaining from $80.67 on July 28 to close at $82.64 on Friday, August 4. Closing in on the April 12 peak of $83.09, surpassing that level would put WTI at its highest point since last November. Sanctions and the overall ineptitude constantly on display by the Biden administration has resulted in oil prices being dictated by OPEC+ and a deepening currency crisis. Thus, the US and Europe are facing rapidly rising prices for gasoline and other distillates, the US national average for a gallon of unleaded regular gas up sharply again this week, rising from $3.73/gallon last Sunday to $3.82, according to gasbuddy.com. The Southeast continues to maintain the lowest prices, albeit at levels not experienced in at least nine months. Mississippi remains the cheapest place to buy gas, now at $3.31, which is a marked difference from just a few weeks ago when Mississippians enjoyed prices under $3.00. Louisiana ($3.41) and Alabama ($3.46) are the next cheapest. Everywhere else across America is $3.44 or higher. Texas is up to $3.47, Florida, the Southern outlier, is at $3.81. California is now averaging $5.05 a gallon, followed by Washington ($4.98), Oregon ($4.63), Nevada ($4.32), Utah ($4.10), and Illinois ($4.05) increasing the number of states above $4.00 to six. Closing in are Idaho ($3.99), Montana ($3.94), and Colorado ($3.93). In the Northeast/Midwest region, beyond Illionois, the highest gas prices are in Pennsylvania ($3.90) and New York ($3.87). The lowest prices in the region are in Ohio ($3.44) and Kentucky ($3.45).
This week: $28,992.70 Crypto continues to crumble, albeit at a reduced pace. If Bitcoin is unable to hold $29,000, the subsequent decline should be back to the $25-26,000 area.
Silver:Gold Ratio: 81.76; last week: 80.02 Per COMEX continuous contracts:
Gold price 07/07: $1,930.50
Silver price 07/07: $23.28 Gold and silver prices continue to be pressured by short-sellers on COMEX, who have managed to keep precious metals from logical gains against fiat currencies. Financial authorities in Western nations are playing the long game, hoping high interest rates and inflation will keep gold and silver contained. There is considerable pressure in terms of BRICS and their upcoming summit in South Africa on August 22-24. A flurry of rumors and statements from interested parties have added to confusion regarding the immediacy of a BRICS currency, gold-backed or otherwise. Particularly poignant was a statement by Russian Press Secretary, Dmitry Peskov, who revealed on Thursday that experts are currently engaged in discussions of implementing a unified currency within the BRICS group. "This is an ongoing process of deliberation, and it is evident that it will take time to reach a consensus," said Peskov, adding, "in the near future, it is unlikely that this will be feasible, but the use of national currencies is already a reality that is growing on a global scale, and this practice is not only used by countries that face sanctions but also by those that do not face them. The global de-dollarization process is steadily advancing, and numerous countries are increasingly moving towards utilizing their national currencies." In the current environment, initiation of a unifying currency would be completely destabilizing to the entire world, probably prompting military action by NATO and the US, in particular. It would appear that BRICS countries and others in the "Global South", outside the hegemony of the West, are presently content to continue pressing forward with cross-currency transactions that do not employ US$, which does harm enough to US reserve currency hegemony. Whether the US likes it or not, its currency reign is diminished by its own sanctions and seizure of Russia's reserves back at the onset of the Ukraine conflict. Many countries no longer trust the United States as a valued partner, but view the country on an adversarial basis. From Brazil and the South American continent to Nigeria and Africa, through the Middle East and Asia, nations are forming alliances and trading partners exclusive of the US and Europe. These efforts, as Peskov mentioned above, are contributing to weaken the global grip of the United States and dollar hegemony and are likely to continue to expand over coming months and years. The advantage to gold and silver investors is one that requires faith and patience. There appears to be more time to top up stores of value in precious metals at what many consider bargain basement prices. Should the world - or even parts of it - return to some form of a gold-backed currency regime, prices, in dollar terms, may rise substantially, but even if not, the value should increase as dollar dominance wanes. While the hopes of the world rise and fall with the success or failure of BRICS nations and others to coalesce around a unified currency, that prospect may take years of trial and error, war, and unsettled times. Faith in real money, as gold and silver have proven to be for centuries, will require great patience. Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping included):
The Single Ounce Silver Market Price Benchmark (SOSMPB) fell by $1.13 over the course of the week, to $36.93, from the July 30 price of $38.06 per troy ounce. Prices continue to fall on COMEX-traded futures, affecting single ounce prices at auction or from dealers, but not to an extent that would be discouraging to true believers. Finding gold coins or bars of under 10 ounces for less than $2000 an ounce is nearly impossible, as is silver under $30, though 10-ounce silver bars and coins can still be purchased for $25-28/per ounce, and are currently the best bet for savers and investors considering the lofty silver:gold ratio. The question remains of how long will prices be contained in the current range.
A collapse of confidence in all institutions is well underway in advance Western economies. Through government policy and poor choices by leadership, people are simply not just annoyed with government, but close to rejecting its authority. The end of democracy as a functioning mainstay of civilized societies may not be here, though it is perceptibly near. Consider your choices, make a plan, and execute it with all due alacrity.
At the Close, Friday, August 4, 2023:
For the Week:
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