Rocktober 18, 2023
*currencies drift on Tuesday…
* China’s economy not in collapse, as reported…
Good Day… And a Wonderful Wednesday to you! Boy, was it cold when I went to get my blood draw yesterday morning! I was then cold to the bone all day, wrapping myself in a blanket, and hunkering down all day… Which was easy to do, since my stomach was revolting in me, and hunkering down seemed to be the only thing I could do… I think I finally got it under control last night, fingers crossed this morning… Dastardly Chemo is to blame, although, I do believe I did have a touch of a stomach bug, because no Chemo has ever affected me like this new one… Junior Walker and the All-Stars greet me this moring with their 60’s song: What Does It Take?
Well, yesterday’s price action in the dollar was booooorrrinngg! The BBDXY remained 1,270 all day long… So, that means the currencies were non-movers too… I read last night that the markets had calmed down now that the POTUS is heading to Israel… What on earth do they think he’s going to do there? I have my opinion, but I’ll keep it to myself! The Potus was supposed to have a meeting with the Palestine President (PP), but the PP cancelled the meeting after Potus’ plane left the ground… I guess he didn’t want to talk to our POTUS!
Gold had a good day going at one point in the day, up more than $5 and looking like it wanted to go higher, but then the short paper traders showed up and reduced Gold’s gain to $2.80 on the day. Silver was following Gold’s lead, and was up nicely, when the short paper traders showed up, and reduced Silver’s gain to 20-cents… Gold ended the day at $1,923.80, and Silver at $22.89…
I think the thing that saved the dollar from getting sold again yesterday, was the out of left field, print of Retail Sales for Sept… Retail Sales were up .7% in Sept…. The increase was spurred by strong demand at auto dealers and online stores, the government reported. Higher gasoline prices also played a role, however. And I would bet a shiny quarter that the rise in gasoline prices played a large role in the increase of Retail Sales… I read one article that was so all-in on the resiliency of the economy, that they talked about how consumers have the cash to keep the economy going… Well, that may be, but then why has consumer credit (read debt) risen in recent months?
The price of Oil gained $2 yesterday and end the day with an $88 handle… I need to fill up my gas tank, and of course I waited a couple of days to do this, and it will come back to bite me, but… I need the gas, so I pay…
The 10-year Treasury yield climbed to 4.83% yesterday… Now that’s a move! The bond boys figure that if Retail Sales was so strong, then the Fed Heads are NOT going to be cutting rates any time soon… So, they mark up the yield and everything that’s priced off of the 10-year, like loans, mortgages to name a couple, will also be marked higher and that’s a cost to you, dear reader…
So… That’s what happened in the markets yesterday… The dollar drifted, Oil gained, bond yields gained, Gold & Silver gained, and it was all tied to a stronger than expected Retail Sales…
In the overnight markets last night… Well, the dollar again drifted but this time higher by ½ Index point… So, no biggie… But the real news this morning is that Gold is on a run higher! Gold is up $48 to start the day today, and Silver is up 38-cents! The flight to safety is in the cards today, and brother does it look good for Gold & Silver!
The price of Oil trades with a $88 handle this morning, and the 10-year added to its yield overnight, and starts today at 4.85%… But that run up of Gold & Silver this morning is impressive to say the least!
Longtime reader, Bob, sent me a note yesterday, here it is: “we think of the money going to debt, and to the military – but did anyone know that tthe costs of wildfires are truly enormous!!!!!! An impact that is even more than the costof the us military!!!!
So, here’s the skinny of what he’s talking about… “National defense costs roughly $766 billion per year and education and social services cost $677 billion. The Wildfire budget can go from $394 Billion per year to $893 Billion per year… Yikes… But, here’s the problem as I see it… These wildfire expenses wouldn’t be that big of a deal if we were a budget surplus country… Yeah, imagine that as the Twilight Zone music begins to play, the U.S. as a Buget Surplus country, it boggles the imagination, does it not?
In the housing market, there’s this from CNBC.com this morning: “Builder confidence in the market for single-family homes dropped to the lowest level since January, as builders contend with a market dominated by high mortgage rates and costs for financing.
The monthly National Association of Home Builders/Wells Fargo Housing Market Index dropped 4 points to 40 in October, and September’s read was revised down 1 point. Anything below 50 is considered negative. This marks the third straight monthly decline in builder confidence.”
Confidence is very important to have in anything, but here, it means that there are many builders that are being shut out of the business, because of high interest rates… Poor souls… If they think these are high interest rates, they certainly weren’t around when I first bought a house, and my mortgage rate was 10%! I’m just saying…
Well, all the reports that talk about a collapse of the Chinese economy, will be backing of their statements after it was reported last night that China’s economy grew at a faster-than-expected clip (4.9%)in the third quarter, while consumption and industrial activity in September also surprised on the upside, suggesting the recent flurry of policy measures is helping to bolster a tentative recovery. Retail Sales also beat expectations, so not is all as bad in China as the so-called experts have stated…
Reuters reported, this morning, that U.K. inflation remained sticky at 6.7%… Here’s Reuters view: ” British consumer price inflation (CPI) unexpectedly held at 6.7% in September, remaining the highest of any major advanced economy and keeping alive the possibility of another rise in interest rates.
A rise in petrol prices between August and September was the main factor stopping a fall in the annual rate, the Office for National Statistics said on Wednesday.”
Chuck again, yeah, those pesky Petrol prices, will do that every time!
The Data Cupboard yesterday had Retail Sales, which we already talked about, and Industrial Production, which was also reported stronger than expected at .3% and Capacity Utilization, which also increase to 79.7%… Well, from the looks of these three reports, one would think that the U.S. economy is doing alright… But there are some dark alley ways associated with the economy folks, that you wouldn’t want to venture down!
Today’s Data Cupboard has Housing Starts for Sept. and 3 Fed Head speakers… late in the afternoon, we’ll see the Fed’s Beige Book, which used to mean something to traders, but doesn’t really hold a candle to other reports that traders use now… So there’s that!
To recap… The dollar drifted yesterday, with the BBDXY remaining in the 1,270 handle all day… Chuck thinks what saved the dollar from getting sold was the stronger than expected Retail Sales report for Sept… Gold & Sliver’s gains yesterday were chopped down by the short paper traders, Oil gained $2, and the 10-year’ yield climbed to 4.83%!
For What It’s Worth… This is a cute article that appeared on CBS.com that talks about what Gold did the last 10 years, and it can be found here: What a $1,000 gold investment 10 years ago would be worth today – CBS News
Or, here’s your snippet: “Gold’s value has been recognized for thousands of years, and it continues to hold a unique place in the world of investments. Not only can this precious metal help to reduce the risk from other investments in your portfolio, but it can also help protect your wealth and hedge against inflation.
Most other types of investments simply can’t offer those types of benefits to investors. That’s a large part of why so many investors have flocked to this precious metal recently, whether they’re investing in gold bars and coins, gold stocks and ETFs or preparing for retirement with a gold IRA. And, given the current uncertainties with the economy, it’s likely that even more investors will put money into gold in the coming months and years.
But what exactly can new investors expect to see in terms of gold’s price growth? A variety of factors can impact the price of gold, including economic conditions, geopolitical events and market sentiment. And, over the past decade, gold’s price has experienced both ups and downs, making it an interesting case study. Let’s take a look at what a $1,000 investment in gold 10 years ago would be worth today.
“Gold’s value has been recognized for thousands of years, and it continues to hold a unique place in the world of investments. Not only can this precious metal help to reduce the risk from other investments in your portfolio, but it can also help protect your wealth and hedge against inflation.
Most other types of investments simply can’t offer those types of benefits to investors. That’s a large part of why so many investors have flocked to this precious metal recently, whether they’re investing in gold bars and coins, gold stocks and ETFs or preparing for retirement with a gold IRA. And, given the current uncertainties with the economy, it’s likely that even more investors will put money into gold in the coming months and years.
But what exactly can new investors expect to see in terms of gold’s price growth? A variety of factors can impact the price of gold, including economic conditions, geopolitical events and market sentiment. And, over the past decade, gold’s price has experienced both ups and downs, making it an interesting case study. Let’s take a look at what a $1,000 investment in gold 10 years ago would be worth today.
What a $1,000 gold investment 10 years ago would be worth today
In October 2013, the price of gold was approximately $1,325 per ounce, according to historical price data from the World Gold Council. If you had invested $1,000 in gold at that time, you would have been able to purchase roughly 0.753 ounces of gold.
Now, let’s fast forward to the present.
As of October 2023, the price of gold hovers at about $1,900 per ounce. So, if you held onto your 0.753 ounces of gold from your initial $1,000 investment, it would be worth approximately $1,432 today. This means that your $1,000 investment would have grown by about 43% in nominal terms.
If you factor in an average annual inflation rate of 2%, your $1,000 investment would need to grow to about $1,218 to maintain its purchasing power over 10 years — which it has. So, over the last decade, the nominal value of your gold investment has increased, and its growth has kept pace with inflation — and also surpassed it!”
Chuck again… Well, do I need to say more? Gold has kept up with inflation and has increased over that!
Market Prices 10/18/2023: American Style: A$.6364, kiwi .5887, C$ .7319, euro 1.0570, sterling 1.2200, Swiss $1.1138, European Style: rand 18.8253, krone 10.9845, SEK 10.9537, forint 363.47, zloty 4.2328, koruna 23.3616, RUB 97.27, yen 149.88, sing 1.3698, HKD 7.8263, INR 84.26, China 7.3146, peso 18.02, BRL 5.0306, BBDXY 1,271.19, Dollar Index 106.19, Oil $88.06, 10-year 4.85%, Silver $23.27, Platinum $908.00, Palladium $1,151.00, Copper $3.58, and Gold… $1,948.40
That’s it for today… Well the Phillies look unbeatable right now, so good for them! My beloved Mizzou Tigers come home this Saturday, to Home Coming! Home Coming all started at the University of Missouri, so at least we’re known for something! My Tigers will play the Gamecocks of S. Carolina on Saturday, and they need this win BIG Time, for then they go on bye next week before taking on Big Bad Georgia! It’s supposed to warm up today, so maybe I’ll be able to go outside and not freeze! I did have a decent night’s sleep last night, and woke up this morning, with a wine glass in my hand, who’s wine, what wine, where the hell did I dine? Ahhh, a little Peter Frampton today.. .But really I woke up this morning feeling better, so maybe, just maybe, today will be a healing day! Blood, Sweat, and Tears take us to the finish line today with their mega hit song: You’ve Made Me So Very Happy… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler