Palladium Continues to Soar!

April 19, 2018    

* Chuck tells us why we should look to buy euros…

* Silver finally gets back above $17!   

Good Day…  And a Tub Thumpin’ Thursday to you! Another cold and snowy day in Chicago yesterday, caused yet another postponed baseball game… My beloved Cardinals lose an “off day” today, to attempt to get the game in. I went out for baseball my freshman year in high school, the weather was quite like it has been this year, but with much more snow… I hated playing in the cold, so I said, “I think I would prefer playing with my club team that doesn’t start practice until May! And so I feel for these guys out there trying to play a warm weather game in the cold! ( I know they get paid millions to do so, but sill, cold and snowy is not meant for baseball!  The Blue Jays greet me this morning with their song: Remember Me My Friend… The Blue Jays were two guys that split from the Moody Blues, so the music sounds very much like its the Moody Blues playing, and longtime readers know how much I enjoy the Moody Blues!    

The dollar’s attempt to fight back didn’t last long, (just overnight on Tuesday) And the currencies were back at work gaining VS the dollar yesterday and overnight. The big movers on the day were the Aussie dollar (A$), Norwegian krone, Brazilian real, and stretching out Gold gained $2.00, and the price of Oil is trading this morning with a $69 handle… (Ok spring training buddies this is not the time or place to correct me! HA) 

Regarding the price of Oil rising nearly daily in recent weeks, the latest weekly supply report surprised Oil traders as it showed a huge withdrawal, and that has propelled the price of Oil higher.  And with Oil bubbling out of the ground like black gold, Texas Tea, the Petrol Currencies, for the most part, including the Brazilian real have picked up the pace of appreciation… I also read this morning that Lola, AKA Goldman Sachs is telling their clients that the real is read to soar, and to buy the currency.  And we all know that what Lola wants…. Lola gets! right?    

I’ve been watch the euro’s rally that began last June when the currency began to get some love from traders. The single unit was trading at 1.09 at that time, and overnight last night, the euro traded as high as 1.24, it has seen some profit taking since hitting 1.24, but that’s a good sign, get all those old shorts out of the way, so the next move higher won’t have them weighing it down!  

I’m very impressed, that the euro has been able to gain VS the dollar give they still have negative  deposit rates, and the U.S. is hike rates about every 6 months, soon to be every 3 months if you believe new Fed Chairman Jerome Powell.  All signs point to the European Central Bank (ECB) to begin to unwind their stimulus they have used to bring the Eurozone economy back from the flat line they were showing a couple of years ago, after having had to deal with Greece. 

My good friend, Dennis Miller, the Retirementor, and  author of his weekly letter Miller On the Money, is going to issue his newest letter today, and in it is an interview with me!  It’s the first of two parts, with the second part coming next week. if you’re retired or thinking about retiring you should be reading Dennis’s letter each week, that can be found here:    I said all that to tell you I said in the interview that the first currency a diversifier should look to own is the euro, because  it’s the offset currency to the dollar… So, as the dollar slides, investors, traders, hedge funds, all look to buy euros.. I’m just saying…   Oh, and this morning there’s news that Iran was switching their reporting that was done in dollars, to euros… Interesting, eh? 

I’ve been wring some very long letters so far this week, but today’s will be the end of that! The ideas just aren’t flowing in my brain this morning, so this will be more of a this is what happened kind of letter to end the week for me… Sorry, but I’ve given you so much stuff to think about these past few Pfennigs, that you should be kept busy with those, and not need another homework assignment! HA!   

Have you been watching the metals prices in the currency roundup each day? I talked a little about the huge jump in Palladium last week, and this week it continues. The price of Platinum is also in rally mode, and yesterday, Silver finally got back above $17 spot! WOW Gold is trading right at $1.350 this morning, so watch that carefully… For this is the level that the “boys in the band” aka the price manipulators have drawn a line in the sand, and they bring out the big guns to short Gold… But I would have to think that shorting Gold right now, with Syria, and dozens of other hot irons in the fire going on, this is Gold’s bag baby!   

Inside looking out, was a hard driving rock song by Grand Funk Railroad from the early 70’s, and  I’m reminded of that song when periods of time like right now are going on… And I think the “boys in the band” are inside looking out at the strong demand for physical Gold and thinking it would be hazardous to one’s wallet to short Gold right now… 

But as I say that, I’m reminded just how brazen these guys have been with their “all-in shorts”…  So, maybe I should dial back my Inside looking out statement right now…  NAH! Longtime readers know that’s not my style, it’s shoot from the hip and don’t get in my way!  But with age comes a softer demeanor, I’m just saying…   

The U.S. Data Cupboard  will have two non-market-moving data prints today, but ones that are interesting… Leading Indicators for March which seem like an oxy moron, as the report is looking forward, but it’s for last month… go figure…   Any way Leading Indicators is a composite of 10 forward-looking components including building permits, new factory orders, and unemployment claims. The report attempts to predict general economic conditions six months out.  And along with Capacity Utilization are the only real forward looking pieces of economic data that aren’t backward views…

 Another print that’s interesting today is the Philly Fed Index, ,which is a measure of the manufacturing activity in the Philadelphia region, and long ago, a trader showed me how it corresponds to commodity trading, and so each month I check that out to see if his hypothesis remains…  I find that it does some months and not in others.. So, much for that, eh?  

To recap…. The dollars 8 hours of recovery came to an end yesterday, and the currencies turned the tables on the dollar.  The real bright spot in recent weeks in Palladium, which once again is on a rampage…  the price of Oil is kicking tail and taking names later, and Silver is trading above $17 again, YAHOO!    

For What It’s Worth…  I did a deep dive into what I call the Retail Apocalypse in my DTL letter that will print tonight, and so when I saw this article come across my screen, I knew it had to be a FWIW article! So, it’s about the Retail Apocalypse and can be found here:        

Or, here’s your snippet: Ask anyone running a store and they’ll tell you that it’s tough to be in the retail business. Merchants big and small are struggling to meet the demands of a customer base that is demanding better service, lower prices and products both in-store and from the comfort of their homes. A new report from investor research firm Moody’s certainly confirms that.

According to last week’s report, bankruptcies in the retail sector were at a record high during the first quarter of 2018.

There were nine defaults in the sector — including Sears and Claire’s – during the three months ended March 31. Tops Friendly Markets, a supermarket chain, and the Bon-Ton, department store chain, also filed for bankruptcy during the period. The only non-U.S. default that occurred in the first quarter was Britain-based BrightHouse Group, which sells rent-to-own refurbished sofas, televisions and refrigerators.

Defaults on corporate debt from the retail sector in the past three months made up almost one-third of defaults by corporations in all industries.
“Stresses in the retail sector have weighed on the operating earnings of department stores, discount stores and drug stores in particular,” a Moody’s spokesman said in the report. “A year ago, we noted that 14 percent of retail debt issuers were distressed and predicted that both the U.S. and European retail sectors would have the highest one-year default rates among all corporate sectors.””

Chuck Again…  I know what you’re thinking, that it’s all the e-commerce’s fault, but that’s not all and I explain it all tonight! Wait! What? you haven’t bitten the bullet and subscribed to the Dow Theory Letters?  Shame, shame, shame… HA!   go to: should this interest you…    

Currencies today 4/19/18… American Style: A$ .7798, kiwi .7313, C$ .7925, euro 1.2370, sterling 1.42, Swiss $1.0325, … European Style: rand 11.9625, krone 7.7526, SEK 8.3893, forint 250.87, zloty 3.3690, koruna 20.4873, RUB 61.31, yen 107.36, sing 1.3093, HKD 7.8488, INR 65.72, China 6.2787, peso 18.17, BRL 3.3933, Dollar Index 89.67, Oil $69, 10-year 2.89%, Silver $17.18, Platinum $947.85, Palladium $1.051.55, and Gold… $1.350.90  

That’s it for today, and this week, of course!  No problems with my Southwest flight down here, and the Uber ride was just fine… I was remiss in forgetting to say RIP Barbara Bush, the former first lady, died on Tuesday. The wife of a president, and the mother of a president… WOW!  the sun is out, something I hadn’t seen much of back in St. Louis the 3 weeks I was home, so that’s a good thing! The coffee is brewing, and once I finish this letter, I take my cup of coffee out to the deck, and watch the ocean,,. The Counting Crows takes us to the finish line today with their song: Round Here…  I hope you have a Tub Thumpin’ Thursday, and Fantastico Friday tomorrow! And remember to Be Good To Yourself! 

Chuck Butler