- currencies & metals have strong rallied on Tuesday…
- The House agrees to kick the can down the road again…
Good Day… And a Wonderful Wednesday to you! Real Quick here, this is just a reminder that there will be no Pfennig tomorrow! Ok, now that that’s out of the way, my beloved Mizzou Tigers were named the # 9 team in the College Playoffs Rankings! That’s a long way from where they started the season, non ranked! YAHOO! I went to lunch in Port Salerno yesterday with some friends from down here… It was a fairly long drive, but well worth it to see everyone again! 3 years ago, I used to make that drive and even further to Port St. Lucie, 2 times a week, to visit the wound center there… I’m sure glad that’s all behind me now! The late, great, Leon Russell greets me this morning with his song: Back To The Island…
Well, you can’t say that I didn’t tell you! On Monday this week, I told you that IF the STUPID CPI came in weaker, as it was expected to do, that it would be bad for the dollar, and good for Gold… Well, rewind to yesterday, and the STUPID CPI came in weaker, and the dollar got sold like funnel cakes at a State Fair, and Gold & Silver rallied big time. on Tuesday… The BBDXY lost 15 index points yesterday, and most likely has the PPT tuning up their horns to blow some intervention toward the markets today… Gold gained $16.90, and at one point yesterday it was much higher, but settled to close at $1,963.70… Silver gained 76-cents, and after flirting with falling below 22-cents, earlier this week, Silver closed yesterday at $23.16…
The euro rallied BIG TIME on Tuesday, and ended the day at 1.0875!, all the other currencies followed the lead of the euro, with the star performers including the: pound sterling, Swiss franc, and even the Japanese yen saw some love for the fist time in a while… These gains by the currencies were all a result of the dollar getting sold… It’s all about the dollar, and has been for some time now…
The price of Oil remained in the $78 handle, and Bonds got bought in bunches on Tuesday… So, here’s the skinny, on the bond buying… The markets are all saying that the “Fed is finished hiking rates”… And that was celebrated by the bond boys, by marking up bond prices… The 10-year’s yield fell from 4.62% to 4.43%, which in bond moves is considered to be collossal! And normally I would say that the only thing that moves bonds by that much is some bulk buying by the Fed/ Cabal/ Cartel… But with all this euphoria in the markets about how the Fed Heads are finished hiking rates, I’m going to leave this move all to the markets…
In the overnight markets last night… The dollar got sold a little, cetainly not with the umph that it was sold during the day… The BBDXY has lost another index point overnight, with the euro pushing toward 1.09, this has got the inklings of a major PPT intervention to save the dollar… But as long as they remain on the sidelines, the currencies will contiue to gain VS the dollar… Gold is up $9 to start the day today, and Silver is up 30-cents… So, some good gains from the metals to start the day today… I love it when a plan comes together! I just knew in my heart of hearts that 1. the BLS would show that inflation weakened, 2. that the markets would take that as a Fed isn’t hiking rates any more stance, 3. that the dollar would get punished for this stance, and 4. that Gold (& Silver) would rally strongly… So, as Hannibal Smith of the A-Team used to say… “I love it when a plan comes together!”
Speaking of a currency rally… The Chinese renminbi really rallied, overnight! The Peoples Bank of China (PBOC) was probably looking the other way, when the markets took the renminbi to a 7.24 handle… That move prompted the Singapore dollar to a higher level too… And the currencies in the rest of the Asian region all rallied… And that includes the Pan-Asian Aussie and kiwi dollars…
The price of Oil slipped about 50-cents overnight and trades this morning with a $77 handle. And thinking that the drop in yields was overdone, the bond boys adjusted the yields a bit higher in bonds, with the 10-year’s yield at 4.47% this morning…
I thought I would stop here and give you the skinny on the STUPID CPI yesterday… First of all… On a monthly basis, prices increased were unchanged following a 0.4% rise the previous month. The euphoria came from the result of annualized CPI, which fell to 3.2%… So, the drop in the STUPID CPI was due to lower gas prices… And apparently they were so low that they more than made up for the gains in inflation from: Food, Insurance, and Health Costs… So, here’s my take on the whole shootin’ match… According to www.shadowstats.com if we calculate inflation without the hedonic adjustments, like we did before 1990, CPI would be 7.9%… More than double the 3.2%, the BS, I mean the BLS would have you believe is real inflation… As if! I didn’t just fall off of a turnip truck last night! I don’t believe the BLS’s CPI, and the markets should know better, but they apparently don’t!
The other thing that I read from the markets, is that they don’t believe the Fed Heads will be cutting rates any time soon… But you can see the gears in their heads grinding right now… if the the Fed Heads are finished hiking rates, then their next move will be down… And that’s what the markets are hanging their hats on right now… I won’t complain too much as long as Gold continues to get some love becuase rates are going higher!
Here’s Dave Gonigam from his 5 Bullet Points newsletter yesterday: “Some of the internals of the report are laughable. Food at home up only 2.1% year-over-year? Yeah, maybe if you cut back on meat and got more of your protein from lentils. (Believe it or not, the statisticians monkey with the numbers exactly this way; they call it “the substitution effect”)
Chuck again, see? even Dave sees the STUPID CPI print for what it is… worthless!
Well the news this morning is that the House agreed on a spending bill that would be an exension, to avert a Gov’t shutdown… We all knew this would happen, with the only surprise here is that it was done a day early, and not at the 11th hour… This extension will now go to the Senate, and then to the POTUS for his signature… So, mark your calendars, for February 2nd… That’ll be our next day of default… Kicking the can down the road… I need to write a song with that title… I’ll get working on that when I get home…
I was looking at the components of the BBDXY Index the other day, and noticed a change in the makeup… The Singapore dollar was added to the list of currencies that make up the index… That brings the total of currencies that make up the BBDXY index to 12… do you want to know what they are? I’m sure you do! … Ok, here’s the list: euro, sterling, yen, C$, peso, renminbi, francs, A$’s, S.K. won, rupee, sing, and Taiwan dollar… I’m sure you’ve been wondering what those were for a long time, since I began using the index instead of the dollar index, since the dollar index is so heavily weighted with euros… So, congrats Singapore dollar, you make the club!
The U.S. Data Cupboard yesterday was the spring board to the dollar selling with the Stupid CPI… and today we get the wholesale inflation index, PPI… Should show that the pipeline inflation isn’t going away… We’ll also see Retail Sales for Rocktober… I have something for you in the FWIW section today, with regards to Retail Sales… It’ll be interesting to see just how disappointing the report will be… I’m just saying…
To recap… The STUPID CPI sent the markets reeling yesterday, as it showed that the propeller heads at BS, I mean BLS, showed inflation, on an annual basis, had weakened, never mind that on a month to month basis it remained the same, and that was with a revision higher in September’s number! Nevertheless, the dollar got sold on a new markets stance that the Fed is finished with rate hikes, Gold & Silver romped on the day, and the euro traded well into the 1.08 figure! The House agreed on a spending extension to avert a government shutdown… Whoopee! As if we didn’t think they would!
For What It’s Worth… Well there’s a new sheriff in town, so where’s bad Bart? That’s what I wanted to think when I read this article in Ed Steer’s letter www.edsteergoldsilver.com And it’s about a new system that will track consumer spending, and it can be found here: Consumer spending fell in October, according to new CNBC/NRF Retail Monitor tracking card transactions
Or, here’s your snippet: “The consumer took a spending break ahead of the holiday season, with October retail sales, excluding autos and gas, falling by 0.08%, and core retail, which also removes restaurants, declining by 0.03%, according to the new CNBC/NRF Retail Monitor.
The new Retail Monitor, debuting Monday, is a joint product of CNBC and the National Retail Federation based on data from Affinity Solutions, a leading consumer purchase insights company. The data is sourced from more than 9 billion annual credit and debit card transactions collected and anonymized by Affinity and accounting for more than $500 billion in sales. The cards are issued by more than 1,400 financial institutions.
The data differs from the Census Bureau’s retail sales report as it is the result of actual consumer purchases, while the Census relies on survey data. The government data is frequently revised as additional survey data becomes available. The CNBC/NRF Retail Monitor is not revised as it’s calculated from actual transactions during the month. It is, however, seasonally adjusted, using the same program employed by Census.
“Our audience, investors and executives alike, will now be armed with dynamic insights that go beyond headline numbers to show emerging trends and critical detail,” CNBC Senior Vice President of Business News Dan Colarusso said.
Chuck again… Well, I’m all for technology that brings us data faster and correctly… And this report said that consumers took a break in spending in Rocktober… I guess we’ll see if it plays out like that when Retail Sales will print this morning for Rocktober… As I said on Monday, the BHI tells me that this report should be disappointing…
Market Prices 11/15/2023: American Style: A$.6527, kiwi .6047, C$ .7309, euro 1.0862, sterling 1.2473, Swiss $1.1277, European Style: rand 18.1395, krone 10.8228, SEK 10.5422, forint 346.70, zloty 4.0460, koruna 22.5582, RUB 89.26, yen 150.32, sing 1.3415, HKD 7.8013, INR 83.14, China 7.2418, peso 17.30, BRL 4.8637, BBDXY 1,248.06, Dollar Index 104.13, Oil $77.82, 10-year 4.47%, Silver $23.46, Platinum $895.00, Palladium $1,041.00, Copper $3.67, and Gold… $1,972.41
That’s it for today, and this week… There are storms that moved through the area yesterday, and the ocean is really angry! The surf is up BIG TIME, and probably causing beach erosion… I guess we’ll find out when the storms clear out which won’t be until Friday! My wife and I keep the local TV station app on our phones, so we can check out what’s going on here while we’re back home… I think when I get back home tomorrow, I’ll have one more day of hammering and sawing to get through, and then our house will be back together! Just in time for Thanksgiving, which will be at our house next week… When I left St. Louis it was chilly, then it warmed up while I was gone, and now it’s going back to being chilly… UGH! I would stay here, except there’s Thanksgiving next week… My beloved Mizzou Tigers take on the Florida Gators on Saturday… I’m worried about this game… After Mizzou’s big win last Saturday, I hope they still have the killer instinct in them! The Cure takes us to the finish line today with their song: Just Like Heaven… I hope you have a Wonderful Wednesday today… And please, oh please remember to: Be Good To Yourself!
Chuck Butler