April 26, 2023
* Currencies & metals get sold on Tuesday…
* But then rebound in the overnight markets…
Good Day… And a Wonderful Wednesday to you! Well, my beloved Cardinals found another way to lose a game last night… I know its early in the season, but this is getting serious, folks… UGH! I went to City Park to watch our StL City SC team last night, and sat with Frank Trotter! I also saw, Ty Keough, Jack Stapleton, and Dane Moody! It was an EverBank reunion! I’ve been to two games now, and each game has been won by the good guys by a score of 5-1… Maybe the owners of the team might want to get me to every game, eh? By now, you’ve heard the news that Frank Trotter is starting a new bank (EverBank2), this one is called Battle Bank, and he’s got all the pieces in place to virtually open, just waiting on the FDIC to bless the bank… If you haven’t been to his website yet, here it is: www.battlebank.com The Band, Missouri, greets me this morning with their great driving song: Movin’ On…
Tuesday was not a good day to be a currency not named dollar… The dollar bugs went on a rampage and at the end of the day, the BBDXY was up 6 index points, and the euro had dropped back below 1.10, with the other currencies taking their whipping from the dollar. This dollar rally was something out of left field… I say that because according to my estimate of how many traders, economists, hedge fund gurus, that are talking about how the fed/ Cabal/ Cartel, is going to be cutting rates later this year, one would think that the trade would be to sell dollars, since they bought dollars when rates were going up… Gold was getting beaten about the head and shoulders and then turned around… Gold did lose just $1.40 on the day to end the day at $1,288.50… Silver, too, turned around, but not as much as Gold did… Silver, which was down 70-cents in the early trading yesterday, rallied a bit to close down 43-cents on the day and close at $24.80…
In the overnight markets last night… There must have been someone with an ounce of gray matter say, “Hey, why are we buying dollars, when we should be selling them?” And that got traders and investors to exam what their counterparts had done during the day on Tuesday, and that got them selling the dollar… And as we start the day today, the BBDXY has given bak 4 index points, the euro is back above 1.10, and Gold is back to $2,000… Now, this looks more like what the trading should be doing to me… The price of Oil slipped lower again in the past 24 hours, to trade this morning with a $76 handle… It’s a daily battle between the Oil bulls, and the Oil bears… I do believe in my heart of hearts that the Oil bulls will be the eventual winner here..
The 10-year Treasury continues to see its yield drop… This morning the 10-year is at 3.40% yield… That’s crazy folks, but… it does poit out what I was saying above about how many folks are calling for the Fed Heads to be cutting rates later this year… I guess it all depends on the data that prints betwen FOMC meetings… Speaking of which, I’m still calling for a tiny 25 Basis Point rate hike at the next FOMC in May…
I was reading yesterday about the Japanese yen, and how a glut of investors, traders, etc. are betting that the yen is a ONE-Way street to stronger levels VS the dollar based on the idea that the new Bank of Japan (BOJ) Gov is going to do more than drop the control of the Gov’t Bond yield… I read that and thought, but… hasn’t the BOJ disappointed the markets time after time previously? And I’m of the thought that the yen will see 1.40, before it sees 1.25… (remember, yen is European Pricing, so the lower the price, is a good thing for yen)
I was telling Frank last night, that I had come up with a currency mix that would be a good combo to combat dollar weakness… And he asked me, if I had talked to the folks on my old trading desk about that… And of course I hadn’t, because they don’t want to hear from me any longer.. I’m a “has been”… He laughed, and said, that I should anyway… Well, I said, if they read the Pfennig still, they know what I think…
For those of you, who skipped over that part yesterday, where I listed the combo mix of currencies, that I would be looking to own to offset dollar weakness… They are: euros, francs, Aussie dollars, kiwi, and rubles… You’ve got the offset to the dollar in the euro, you’ve got a safe haven in the franc, you’ve got an Oil play in rubles, and you’ve got currencies with interest rates either higher than the dollar or going to be higher than, when the Fed/ Cabal/ Cartel begins to cut rates…
That would make a good combo currency CD, in my humble country boy opinion… I’m just saying…
Well, the good folks at Gata sent me this note yesterday, “Shares of First Republic continued to plunge on Tuesday as regulators in Washington and financiers on Wall Street scrambled to come up with a plan to stabilise the ailing bank.
The California-based lenders stock price, which is down by more than 93 per cent this year, fell by a further 49.4 per cent, a day after it revealed its customers had withdrawn $100 billion of deposits during last month’s turmoil.”
So, Ahem, Janet Yellen, do you still believe that the banking crisis is over? Well, knowing how she thinks, since I’ve been following her moves since she was the San Francisco Fed/ Cabal/ Cartel President, I would say that she knows deep down that the crisis isn’t over, but she has to tell us all that it is, so that there are no more bank runs…
The top 30 banks with uninsured deposits have a total of $7 Trillion in deposits over the $250,000 FDIC max insured deposit. That’s a lot of uninsured deposits, don’t you think? And if you do, then do you believe that if any of these 30 banks can’t make it, that the banking crisis is just in the 3rd inning? Yeah, that’s what I thought, so don’t pay attention to the woman behind the curtain… (Janet Yellen) I read an article yesterday that called Yellen, the “high priestess” of the economy… I laughed until I cried!
Well, the other news yesterday was that the POTUS has decided to run again in 2024, when he will be 81 years old… Did anyone mention a competency test? I mean in general, shouldn’t anyone running for President of this nation, and holder of the button to ignite nuclear bombs, have to take a competency test before being elected? I’m just saying.. . No politics here, just an observation from the cheap seats…
Before we head to the Big Finish today, I have a funny for you… Dennis Miller sent this to me and said when he saw this it reminded him of me! I played in a small band named The Hinges… We opened for the Doors! HA!
The U.S. Data Cupboard yesterday had the stupid Consumer Confidence report and it believe it or don’t, it actualy showed that Confidence fell in March! Yowza! Now that’s something to write home about! Maybe, just maybe, cause you never know, the folks that take the surveys, actually called someone else besides their uncles and aunts! In another surprising data print yesterday, Case/ Shiller says that home prices actually rose in February .1%, but a rise nonetheless… Stranger than fiction, but it is what it is… So, we’ll move along to today’s Data Cupboard… Today we’ll see the color of Durable Goods Orders for March… February’s Durable Goods were negative, so in keeping with the surprise data prints, I’ll say today’s print for March will be positive!
To recap… Tuesday was not the day to be a currency not named the U.S. dollar… The BBDXY gained 6 index points on the day, and the euro fell back below 1.10, Gold got sold big time early, but fought back to only lose $1.40… Chuck questioned the thought process fo buying dollars, given is seems most everyone’s opinion is that the Fed Heads will cut rates this year… In the overnight markets calmer heads with an ounce of gray matter, decided that buying dollars was dumb, and they proceeded to sell dollars, and the BBDXY gave back 4 index points, and the euro moved back above 1.10… Lots of other things to talk about today, so if you came here first, you might, just might, cause you never know, want to go back and read the whole letter!
For What It’s Worth… Long ago and far away, I had the opportunity to talk to Dennis Gartman… He’s a very famous investment advisor, newsletter writer, etc. And every now and then he sends me a note about something I said in the Pfennig… Well, yesterday, Kitco News had something on Dennis, so this time, I’m going to print something he said! And it can be found here:Dennis Gartman remains bullish on gold, recommends University of Akron endowment fund increase its exposure to 5% | Kitco News
Or, here’s your snippet: ” Gold’s inability to hold its ground above $2,000 is disappointing; however, it remains an attractive safe-haven asset, according to famed commodity investor Denis Gartman.
In his latest investment letter, Gartman said that as chairman of the University of Akron’s Foundation’s endowment investment committee, the precious metal has outperformed in the portfolio. He noted that the university’s endowment fund reduced its equity holdings by 3% two years ago and put that into gold.
“As of today, GLD was up 15.7% over that time, while the broad Russell 2000 stock index was down by approximately 18.9% over that same period,” he said.
He also recommended the fund increase its gold holding to 5% of the portfolio.
In his personal investments, Gartman reiterated his bullish positioning in gold and Treasuries. He added that he is also long-term bearish on equities.
“I’m still holding 80.6% of my portfolio in 2-year notes and 2.2% in cash. I am short of 6.4% of my portfolio via derivatives and I’m long of 10.8% via gold using GLD and GDX with a focus upon the latter,” he said.
Gartman’s bullish outlook for the precious metal comes as prices look to regain their foothold on $2,000 an ounce. The yellow metal sold off sharply last week, falling to a two-week low as market expectations around the Federal Reserve’s monetary policy started to shift.
Markets have all but priced in a 25-basis point hike at next week’s monetary policy meeting. At the same time, markets are pushing back the first potential rate cut after the summer.
The gold market has also seen some profit-taking as concerns over the banking sector eased after the failure of major regional banks in the U.S. and the collapse of Credit Suisse in Europe last month.”
Chuck again… I agree 100% with Dennis on this… And I thank him for participating, although he wasn’t aware of it until now!
Market Prices 4/26/2023: American Style: A$.6600, kiwi .6126, C$ .7339, euro 1.1046, sterling 12477, Swiss $1.1252, European Style: rand 18.4000, krone 10.6246, SEK 10.3072, forint 340.28, zloty 4.1575,
koruna 21.2630, RUB 81.77, yen 133.34, sing 1.3357, HKD 7.8500, INR 81.76, China 6.9237, peso 18.08, BRL 5.0534, BBDXY 1,224.64, Dollar Index 101.35, Oil $76.82, 10-year 3.40%, Silver $24.96, Platinum $1,106.00, Palladium $1,519.00, Copper $3.88, and Gold… $2.000.14
That’s it for today… Man I went back to look for something in yesterday’s Pfennig and noticed that it was quite long… Well, sometimes I have a lot to say, and sometimes I don’t… Yesterday, was a day when I had a lot to say!
I’m still very impressed by the new City Park, nice and new, clean, and the food is good, while the soccer is good too! And, besides all of the steps, I love my seats! Especially now that I know that my good friend, Frank Trotter has the two seats next to mine! I don’t go back to the Park until May 27th, as I share some of my tickets with good friend, Rick Baur… Speaking of Rick, a child of the 80’s, he’ll love this one… We are taken to the finish line today with a song from the Outfield titled: Your Love… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler