- The dollar drifts after the STUPID CPI print
- The bond boys are scratching their collective heads…
Good Day… And a Wonderful Wednesday to you! Another beautiful day down here in paradise… I spent most of the day outside, enjoying the vitamin D… In the afternoon, we took a short trip to visit some friends who used to stay at our condo building, but now stay somewhere else. And when we got there, we got a HUGE surprise! We go a personal tour of a yacht that was in the marina, that belonged to the brother of our friend… What a trip! As I told Kathy as we exited the yacht… This proves that there’s always someone else with more money than you… The Rascals greet me this morning with their song: Beautiful Morning…
Well, the selling of the dollar ended yesterday, but not like it was a total reversal of the current trend. One thing I used to remind everyone all the time, is that you must always remember is that a Trend is not a One-Way Street. There’s always days when the trend seems to be over, but then it comes right back… The BBDXY gained 1 index point yesterday. But, the euro climbed above 1.08 on the day…
Gold lost a lot of ground yesterday, and all that I could find on it was that there was profit taking, and that some Gold buyers had cooled their feet on the stronger than expected STUPID CPI… And that’s all fine and good, but… Gold lost $24 yesterday, and that leads me to believe that the short paper traders were piling on again… I know how Gold feels when the short paper traders pile on… One time when I played H.S. football, I tacked a runner near the opposing sideline, and the ball came loose… and suddenly, I was piled on by what seemed like the whole team… There’s nothing you can do, so you just lay there until they all get off of you… And there’s nothing Gold holders can do when the short paper traders pile on, but to wait until they’ve all gone home, and leave Gold alone…
Silver also lost ground yesterday this time being by 14-cents… Gold closed at $2,158.10, and Silver closed at $24.18… The price of Oil remained in the $78 handle, and the bond buying stopped with the 10-year adding on to its yield, pushing it higher to 4.14%…
So, instead of waiting until later in the letter today, I thought I would address what caused all this selling yesterday of the currencies & metals, and the buying of bonds… It was the STUPID CPI! This from MarketWatch: “Consumer prices matched the biggest increase in February in five months, leaving the yearly rate of inflation above 3% a week before the Federal Reserve meets again to consider when to cut interest rates.
The consumer price index climbed 0.4% last month, the government said, largely because of higher gas prices and housing costs.
It was the largest increase since last September.
The rate of increase in the last 12 months in the CPI, the nation’s most best-known price gauge, edged up to 3.2% from 3.1%.”
Chuck again… well, John Williams at www.shadowstats.com, shows that inflation is really 7.9%… So, the markets can react like they do, when the STUPID CPI prints, but we all know, what’s really going on and that is that inflation is sticky, and will continue to be sticky!
In the overnight markets last night…There was no movement in the dollar, and the currencies look very much like they did when we closed the U.S. session yesterday, having taken on the brunt of anti-sentiment from traders swayed by the STUPID CPI… The euro took a bold move yesterday, and I’ll discuss that in a minute…
The price of Oil remains in the $78 handle this morning, and bonds continue to reverse all the gains it made in the last week when it looked as though a rate hike by the Fed Heads was a done deal… I’m surprised that the price of Oil didn’t react to the news that a Russian Refinery was on fire from a drone attack… Usually news like that gets the boys all lathered up thinking that the supplies of Oil will be cut down… Maybe it will be a delayed reaction?
Well, late last week in the FWIW I had an article about how the euro was picking up steam. And lookie there! The euro had range traded for a couple of week in the 1.08 handle, and suddenly yesterday it moved higher in the the 1.09 handle… (Look, I know that sounds like pennies in gains especially when compared to the $70,000 price of that ponzi scheme Bitcoin) But… There are millions of dollars in currency transactions each and every day, and most of those trades are very large trades, so pennies on them mean something!
Ok, have you heard about the NY Times (NYT) writer that focused on Financial matters for a very long time now, did a mea culpa to NYT readers about his description that he has used a long time, for Bank Capital Requirements?
This all came to light when there are calls for the largest banks to received higher bank capital requirements… Here’s Russ & Pam Martens’ take on this mea culpa: “Let this settle in for a few moments. A New York Times financial writer who has been opining on financial matters as co-host of CNBC’s Squawk Box since 2011 and wrote a bestseller book on what caused the banking crash of 2008 is admitting now, in 2024, that he has to be schooled by a Pulitzer Prize winning author and an Economics Professor at Stanford on his misunderstanding of what bank capital actually is.”
Chuck again… WOW! But for the record: bank capital is not a “fund.” It’s not cash. It’s not liquid assets. It’s an accounting term and a balance sheet item whose components have changed over time. Again, I’m reading the book: The Great Taking by David Rogers Webb, and he goes through all this and more…
Before we head to the Big Finish today, I wanted to point out something that I’ve talked about until I’m blue in the face, and that is the shortage of Copper, and how the metal hadn’t seen any increases because of the shortage… Well, very quietly, and stealth-like, Copper has inched higher and higher in recent trading sessions, and last night, Copper traded past $4… It’s been a long time coming, been a long time gone (CSNY)… I’m just saying…
The U.S. Data Cupboard is empty again today, with no prints on the docket… The Data Cupboard will pick the pace back up again tomorrow with the print of Feb Retail Sales… I talked about this yesterday, so I won’t go through it again other than to say that the BHI indicates it will be stronger than the average bear…
To recap… nothing much has gone on with the dollar and currencies, other than the euro has climbed above the 1.09 handle…. The STUPID CPI showed that inflation is still growing and prices are still on the rise, and that caused the bond boys to genuflect and bonds to recover the yield they lost in the last week… And inflation is changing the landscape folks… and it’s not going anywhere!
For What It’s Worth… This is an article about how many parents are bailing out their children, and it can be found here: Half of U.S. parents financially support their adult kids (qz.com)
Or, here’s your snippet: “Getting older is unavoidable, but growing up, well that’s a different story. A new survey found that nearly half (47%) of parents in the U.S. financially support their adult children in some way.
Monthly, parents are contributing about $1,384 to at least one of their adult children. On average, that’s twice as much as what working parents contribute to their own retirement savings, or about $609 a month, the survey found.
The study, conducted online by technology and coupon sleuth company savings.com, surveyed an estimated 1,000 U.S. parents. The data consisted of 50% men and 50% women. Notably, it excludes data from parents who are supporting disabled adult children.
Although parts of the economy are showing signs of improvement, led in part by rising employment and cooling inflation those factors may not be reaching young Americans just yet, the survey said.
In particular, Gen Z, those between 18-27 years old, were the most common group to receive financial support.
Each financial situation, however, is likely to look different for a family. On average, parents helped their Gen Z adult children pay at least three bills, the survey found.”
Chuck again… I don’t see how this comes out without some family problems, and financial disaster… And parents need to plan for retirement without stressing how their children will make ends meet.” all I’ll say about that…
Market Prices 3/13/2024: American Style: A$ .6610, kiwi .6155, C$ .7462, euro 1.0939, sterling 1.2794, Swiss $1.1390, European Style: rand 18.6535, krone 10.5086, SEK 10.2353, forint 363.08, zloty 3.9142, koruna 23.5392, RUB 91.80, yen 147.98, sing 1.3329, HKD 7.8229, INR 82.86, China 7.1929, peso 16.76, BRL 4.9721, BBDXY 1,230.20, Dollar Index 102.90, Oil $78.31, 10-year 4.16%, Silver $24.33, Platinum $934.00, Palladium $1,069.00, Copper $4.01, and Gold… $2,162.88
That’s it for today… Well, today is Kathy’s Mom’s Birthday! Happy Birthday, Granny! Her mom has been staying with us down here this past week, and I’ve enjoyed having her around! We will take her out tonight for her birthday dinner… It’s the simple things in life that give me pleasure… And a nice dinner with two lovely ladies, will do the job! No game for me again today, which means I’ll be outside reading again… The Kinks take us to the finish line today with their song: Sunny Afternoon… I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself!
Chuck Butler