February 8, 2023
* Currencies & metals fight back on Tuesday…
* U.S. Consumers feel worse off…
Good Day… And a Wonderful Wednesday to you… The full moon rose over the ocean last night, coming into sight as an orange globe… There were clouds in the sky, so the moon rise wasn’t as glamorous as it could have been, going in and out of cloud cover. That’s one of the highlights for me down here, as place faces the ocean, and so I can sit out on the balcony, and watch the full moon rise out of the ocean, whenever I’m here. I forgot to mention yesterday that it was going to be the State of Union Address that night… I didn’t watch it, for I knew what was going to be said… I wouldn’t agree, so I decided to skip the address, and not have my blood pressure rise… Cat Stevens greets me this morning with his very appropriate titled song: Wild World…
Well, the dollar saw some profit taking yesterday, and lost some ground it had gained the previous night. The BBDXY lost 5 index points on the day, with pound sterling gaining enough to move back above 1.20, And buyers of the Aussie dollar (A$) are picking up the pieces, and putting the A$’s gains back together again. There was no price manipulation going on yesterday, for the price manipulators were just plum tired out from all their activity, Thursday and Friday, last week. Gold gained $5.10 on the day, to end the day at $1,873.50, while Silver lost 10-cents on the day, and ended at $22.25… The price of Oil gained $2 on the day, and ended the day trading with a $77 handle… Bonds were steady with the yield on the 10-year at 3.65% to end the day…
I’m sitting here wondering what on earth, the stock jockeys are smoking these days? Apparently, they truly feel that Fed/ Cabal/ Cartel Chairman, Powell, is going to deliver them a “soft landing”, for the economy, and therefore they think they are out in front of the recovery in stocks… I for one, don’t believe it one iota… Even Jay Powell, himself, said it was going to be a slow process with a lot of hardship… Hmmm, does that sound like he believes that he can deliver a “soft landing?” So, if you’re a bear, and think that buying stocks right now is the wrong thing to be doing, Then you and I are singing from the same song sheet…
I want to point out something that I pointed out on Monday in my rant… The Manufacturing sector has seen it index number fall for 10 consecutive months, and in the most recent months, it has fallen below the 50 level that tells us Manufacturing is contracting… Falling every so close to the 45 figure… if you harken back to very old Pfennigs, I explained that two months of below 45, indicates a recession… No matter what GDP is doing, because GDP is so dominated by Gov’t spending. Of course, I’ll be letting you know about the Monthly ISM Manufacturing index reports as they are printed…
In the overnight markets last night… The dollar slipped a little as things calm down from the end of last week. The BBDXY lost 2 index points overnight, and Gold gained $7 in the early trading today. Shoot Rudy, even Silver is gaining ground this morning, up 24-cents to start the day. The euro remains below 1.08, but I have to think if the dollar selling returns like it was, before all the manipulation last week, that the euro will return to 1.08 with no problem, especially with the ECB in rate hike pants… The Swiss franc seems to be THE currency du jour for investors these days… I guess they’re thinking “safety”…
The price of Oil remained in the $77 handle overnight, but seems to be perking again, and some of that is coming from a report from China that their reboot of the economy is seeing demand for Oil strong… Bonds are steady Eddie, with little to no movement in yields… Like I said the other day… The Bond Boys seem to have thrown in the towel on their thought that the Fed Heads would pivot, and instead are focused on the slew of bonds that will be issued when the Debt ceiling debacle gets raised, and who’s going to buy those bonds?
One thing that keeps rattling around in my brain, I hear you saying, oh-no, here we go again, but no, this is different, in that it’s about that whopper of a lie that the B.S., I mean BLS printed for jobs last week… Even if it is somewhat true, what’s the Fed/ Cabal/ Cartel going to do about this? Haven’t they pointed out that high employment needed to slow down or else their job of combating inflation ,would be made harder? So… yesterday, Powell had this to say, ““The disinflation process… is going to take quite a bit of time [and] not going to be smooth.” When asked about the jobs number last week, he replied that the employment report “shows you why this will be a process that takes a significant period of time.”
And that process is?…. hiking rates, and he’s whiskey bent, and Hell bound to go about it slowly from here on out… I said last summer that I thought that rates would top out at 5.50%, It sure looks like that’s what’s in the cards now… And no, I’m not patting myself on the back for that thought… Besides, my bursitis is acting up!
Circling back to the stock jockeys… Have you been watching all the companies that have been announcing layoffs? Every day there’s a new company making a layoffs announcement an yesterday it was Dell Technologies Inc. as the latest technology company to announce job cuts Oh, and the Bed Bath & Beyond ordeal just gets worse every day… So, I’m talking about these companies as a part of the economy that’s obviously not doing too well, and not about the performance of their stocks…
I guess no one looks at the actual Company and what’s going on any longer… eh?
Well, the world of markets have changed, immensely, there are no markets out there, no asset classes that are NOT manipulated… So, nothing trades on its own merits… And that’s what makes investing difficult to do. There was a time, long ago, in a galaxy far, far away, pre euro, pre JPMorgan taking over the metals desk from the defunct Bear Stearns, and pre Exchange Stabilization Funds, I was a foreign bond & currency trader… My charge de’ affairs, was to know by heart, the economies of every country that we traded in… I needed to be able to talk about, drachmas, puents, pesetas, lira, marks, francs, Swiss & French, etc… And every country traded on its own merits… That’s when I came up with the phrase, that I used to use all the time, that “ a currency is the stock of a nation”…
I would tell people to simply use the criteria you use for valuing a company, and use it for valuing a country, and therefore their currency… That worked…. Until it didn’t… And that’s when price manipulators entered the markets in all phases…
Of course, they needed to read the Pfennig each day, to know the merits of different countries… These days, it’s all about the dollar… Gold doesn’t really gain value, the dollar loses value to Gold… The first currency to prove that its merits didn’t matter any longer, was the euro… The euro is the offset currency to the dollar, so just like Gold… the euro doesn’t gain VS the dollar, the dollar loses value to the euro…
The U.S. Data Cupboard yesterday had the Consumer Credit for December scheduled, but it failed to print… You know me, and what I’m going to say about this, right? That apparently, the report was really bad, and didn’t tell the story the POTUS was going to tell in his speech last night, so they held it back and massaged it a bit, cooked it, and then glazed it for public presentation…
There is no real data to print today, but there are 4 Fed Heads out speaking this afternoon… So, maybe one of them will stray from the song sheet, and say, that he/she favors cutting rates soon! I doubt that will happen, but if could!
To recap… The dollar saw some profit taking yesterday, and the BBDXY lost 5 index points on the day. Gold gained $% yesterday, and Silver lost 10-cents. The POTUS gave his State of the Union Address last night, Chuck didn’t tune it in, didn’t want to hear what he feels is not right… Chuck talks about how everyone is forgetting about the sad state of the ISM, or the fact that companies are laying off workers, and makin new announcements nearly every day.
For What It’s Worth… This article is about how U.S. Consumers say they are worse off… I found this on Bloomberg this morning, and thought it to be quite FWIW worthy… I don’t think that this is anything new to anyone, because I’ve written about how the U.S. Consumer seemed to tapped out, I mean Christmas season saw Personal spending go negative! So, you can find this article here: Half of Americans Say They’re Financially Worse Off, Most Since 2009 – Bloomberg
Or, here’s your snippet: “Half of Americans say they are financially worse off now than they were a year ago, the highest share since 2009, according to a Gallup poll released Wednesday.
An even greater portion of lower-income Americans said they were losing ground, according to the Jan. 2-22 survey. About 61% of those with a household income of less than $40,000 reported they were worse off, compared to 49% and 43% for middle- and high-income households respectively.
Gallup noted high inflation, rising interest rates and declining stock values likely weighed on Americans’ financial situations. That said, respondents remain upbeat about their future finances despite looming concerns about a recession.
Some 60% of Americans expect they will be better off a year from now. That share is largely the same across different income groups, and Gallup said the optimism is not unusual — Americans tend to expect their finances to improve rather than worsen.
“If this optimism holds and consumers act accordingly, it may help to minimize or avert an economic recession,” Gallup’s Jeffrey Jones wrote in the report.”
Chuck again… Well, as Jack Reacher says… Hope for the best, plan for the worst…. I don’t know why, other than that Great American Optimism, why these folks think their situation will improve next year, unless they are watching MSNBC all day long… Oops, did I say that out loud? That was supposed to be a keep to myself statement, Chuck! Now, you’ve gone and ticked off 1/2 your readers! Sorry…
Market Prices 2/8/2023: American Style: A$ .6972, kiwi .6334, C$ .7475, euro 1.0737, sterling 1.2097, Swiss $1.0877, European Style: rand 17.5230, krone 10.2553, SEK 10.5461, forint 361.50, zloty 4.3999, koruna 22.1467, RUB 71.90, yen 130.82, sing 1.3239, HKD 7.8494, INR 82.49, China 6.7863, peso 18.87, BRL 5.2049, BBDXY 1,234.41, Dollar Index 103.15, Oil $77.89, 10-year 3.64%, Silver $22.49, Platinum $989.00, Palladium $1,675.00, Copper $4.05, and Gold… $1,880.96
That’s it for today… Well, I was up late last night watching my teams play… I was rewarded with both teams pulling out victories! Mizzou Tigers, and SLU Billikens had tough games, but were able to hold on to win the game late… So, I’m dragging the line today… Even my watch went to sleep before I did last night! HA! Well, it’s Super Bowl Week… The early spread is Philly is giving away 1.5 pts… That’s too close to bet, if you ask me, but billions are being bet on this game, and it’s only Wednesday! Congrats to Yuri Collins, the point guard for the SLU Billikens, Yuri set the league (A10) record for assists… I’ve always pulled for Yuri to do well, as he’s a kid from my old neighborhood in S. St. Louis! 7 days until pitchers and catchers report… And you only have 6 days to secure gift for your Valentine… This has been a public service announcement, please take action! I hope you don’t take the finish line song’s words to heart, next week… The Rolling Stones take us to the finish line with their song: Dead Flowers… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!
Chuck Butler