Rocktober 23, 2023
* Currencies & metals rally a bit on Friday…
* Banks are quietly axing branches & employees…
Good Day… And a Marvelous Monday to you! A very nice weekend here in the Midwest, as the sun came out on Saturday, and it turned into a very nice day. A little chilly yesterday, but sill, nice and sunny… I did have a relapse of bleeding and upset stomach yesterday, but it appears to have passed… So… I carry on… How about them Tigers? They are 7-1 after beating S. Carolina last Saturday, to celebrate their Homecoming at Mizzou! It was the first game they played this year, where I wasn’t fretting or sweating at some point in the game! The Tigers did take their collective feet off the accelerator to start the 2nd half, but no biggie… They now are on bye this week, before taking on mighty Georgia in two weeks… Go…. Tigers! The Band King Crimson greets me this morning with their rock classic song: In The Court of the Crimson King…
Well, those dastardly varmints were at again on Thursday, last week. Gold at midday was up $21, and then it wasn’t… The short paper traders made Gold’s gains disappear, and only a flourish of buying at the end of the day gave Gold a $6.90 gain on the day, $15 off its recorded high of the day… Silver was also shorted, and it was able to squeeze out a 33-cent gain, which was 30-cents off its high of the day… Buth metals finished the week much higher than when they started the week, and hopefully, that can continue… Gold closed Friday at $1,982.20, and Silver closed on Friday at $23.45…
The dollar was down on Friday, this time 2 index points fell off the BBDXY index… So, the BBDXY ended the week at 1,273.63… The dollar slipped a bit last week, and in a week where it saw some fair to middling’ economic reports… So, no news is good news for the dollar these days, and what do we have here? The first part of the week, the Data Cupboard is lacking to say the least! So… watch out for a dollar rebound early in the week…
The euro is nearing 1.06 again, the last time it hit that level, it couldn’t hold it but a day… The best performing currency on Friday, last week, was the Russian ruble… This currency has been beaten about the head and shoulders for so long that when it gains it is surprising… Not surprising like BOO! But surprising in a softer way… The price of Oil slipped on Friday, and ended the week trading with an $89 handle… And the 10-year’s yield continues its march to 5%, ending the week trading with a 4.91% yield.
In the overnight market last night…. well, the Japanese yen finally fell beyond the 150 level last night… It quickly rallied back to 149, as fear of Bank of Japan intervention loomed over currency traders… What a bunch of sissies! Neener, neener, neener, your mother wears army boots! That’s what I have to say to those trades that fear the BOJ… Because, unless the BOJ is going to get several Central Banks of join them in selling dollars and buying yen, any action/ intervention that the BOJ may carry out, will be short lived! That’s the way these things go, folks… I’ve been around currencies now since 1992, and I’ve seen all kinds of interventions… They all seem to carry out this same way… That is unless, the BOJ wants to be in intervening every day, and jawboning the currency higher, every day… The problem with that is this.. they don’t have the reserves to do that… So, there’s that!
Remember back in the 90’s when Then Treasury Secretary Robet Rubin, led the crusade saying in the markets nearly every single day, that the U.S. had a strong dollar in its best interests… Eventually, he got traders to see it his way, but there was never any actual currency intervention going on… So, there’s that too!
Back to the overnight markets… the dollar drifted last night, and still trades with the same clothes on this morning, at 1,273… But the euro did overtake the 1.06 level overnight, and looks like it just might stary above that level going forward… That is, until the PPT makes an entrance…. Gold is up 10-cents to start the day/ week, and Silver is seeing some selling and is down to start the day/ week 15-cents… So, basically the metals are flat to start the day… The 10-year’s yield breached 5% for a bit last night, but settled back below that figure, but it won’t be long before it climbs over it again and stays over it for some time! The price of Oil remained trading with an $89 handle overnight… The ground assault by Israel hasn’t begun yet, so watch what Oil does when that does happen… I’m just saying…
And the 10-year’s yield did go over 5% last night, only to come back below the figure, but… It’s headed there any way, so it might as well, go ahead and take it out and stay above it for some time…. I’ just saying…
You know why this is a Big Deal, right? You see, the 10-year’s yield is used to price everything from short term loans to mortgages… And when the yield in the 10-year rises, so does mortgage rates… I see 8% rates becoming the norm… Uh-Oh!
Moving on to something else… So, last week’s Retail Sales number really had me thinking about what it meant… And what it meant is that consumers are paying more for everything, and that’s what made the Retail Sales number so strong! Is that a good thing? No! It’s not, because eventually consumers will run out of money, having to pay more for things… So, see? It wasn’t about “how the U.S. consumer wasn’t tapped out yet”, it was more about how much more consumers were having to pay for things!
Ok, lets’ get this started off with something I found on Zerohedge.com from Michael Snyder: “Major US banks are continuing to close branches across the US, leaving an increasing number of Americans without access to basic financial services.
Bank of America axed 21 branches in the first week of October, according to a bulletin published by the Office of the Comptroller of the Currency (OCC) on Friday.
Wells Fargo shuttered 15, while US Bank and Chase reported closing nine and three respectively.
In total, some 54 locations had either closed or were scheduled to close between October 1 and October 7.
That is just one week!
And our banks are also laying off staggering numbers of workers here in 2023…
The largest American banks have been quietly laying off workers all year — and some of the deepest cuts are yet to come.”
Chuck again… I have a feeling, that this is just the beginning folks… things will spiral out of control probably before we reach year-end… I’m just saying…
You know, the jaded side me sees this as banks preparing for a cashless society… no need for branches when everything is digital, right?
The U.S. Data Cupboard today, has nothing, absolutely, nothing, say it again! And tomorrow just has some housing stuff that we all know is circling the bowl right now… Later in the week, we’ll pick up the pace and worthiness of the data prints, but for the first part of the week, it’s crickets…
To recap… The dollar got sold on Friday, but not by much… The euro inches toward 1.06 again, and the Russian ruble was the best performing currency last Friday… Gold was on its way to new lands, but was brought back to earth by the short paper traders on Friday, Silver also participated in that scenario… Chuck has figured out what caused the Retail Sales print to be so strong last month… And banks are secretly axing tons of employees… and closing branches… Chuck has his thoughts on why…
For What It’s Worth… Well, I’ve been commenting on this data print for some time now, pointing out how it just can’t be that a recession hasn’t started as of yet… What I’m talking about it the Leading Indicators, which have now printed negative for 18 straight months! This article can be found here: Philly Fed Future Expectations For Shipments/CapEx Near ‘Worst Since Lehman’ Levels | ZeroHedge
Or, here’s your snippet: “The Conference Board’s Leading Economic Indicators (LEI) continued its decline in September, dropping 0.7% MoM (worse than the 0.4% decline expected).
The biggest positive contributor to the leading index was jobless claims at +0.13
The biggest negative contributor was average consumer expectations at -0.19
This is the 18th straight monthly decline in the LEI (and 18th month of 19) – the longest streak of declines since ‘Lehman’ (22 straight months of declines from June 2007 to April 2008)
“The LEI for the U.S. fell again in September, marking a year and a half of consecutive monthly declines since April 2022,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.
“In September, negative or flat contributions from nine of the index’s ten components more than offset fewer initial claims for unemployment insurance.
Although the six-month growth rate in the LEI is somewhat less negative, and the recession signal did not sound, it still signals risk of economic weakness ahead. So far, the U.S. economy has shown considerable resilience despite pressures from rising interest rates and high inflation.
Nonetheless, The Conference Board forecasts that this trend will not be sustained for much longer, and a shallow recession is likely in the first half of 2024.”
Chuck again… well, I’ve said all I had to say about this data print… no stock market has ever rallied during a recession, so… trade at your own peril…
Market Prices 10/23/2023: American Style: A$ .6313, kiwi .5822, C$ .7290, euro 1.0613, sterling 1.2176, Swiss $1.1276, European Style: rand 18.9923, krone 11.1018, SEK 11.0334, forint 359.70, zloty 4.2006, koruna 23.2313, RUB 94.84, yen 149.92, sing 1.3714, HKD 7.8258, INR 83.19, China 7.3161, peso 18.28, BRL 5.0449, BBDXY 1,273.75, Dollar Index 106.07, OIl $89.02, 10-year 4.97%, Silver $23.30, Platinum $909.00, Palladium $1,136.00, Copper $3.56, and Gold… $1,982.30
That’s it for today, and the next two days, as once again this week, I have doctor appts early Tuesday and Wednesday this week. Little Evie came with her older brother Braden to spend the night with us Saturday night… Braden has one of those oculus things, and I called him Yourgos, and he didn’t have a clue! Evie is so darn cute! We shared some popcorn Sat. night, and she told me I made good popcorn! HA And she’s got to be the only child I’ve ever known that didn’t like Chocolate Milk! I can’t wait to tell my oncologist about my episodes with Chemo! I’m sure she’s heard it all before! But she’ll humor me, and let me tell my tale of being sick… Last Thursday night, I went out and met my Latte Buddy, Michelle! Michelle was my operations manager for the World Markets Div. at EverBank, and she’s still there! She looked great, like she hadn’t aged a year! It’s great knowin that the folks I used to work with, still remember me… And with that… John Waite takes us to the finish line today with his song: Every Time I Think Of You…. I hope you have a Marvelous Monday today, and will please remember to Be Good To Yourself!
Chuck Butler