September 13, 2023
* currencies rally on Tuesday…
* There seems to be a shortage of Oil in the Saudi reserves…
Good Day… And a Wonderful Wednesday to you! My beloved Cardinals found a way to win last night in Baltimore, marking the 199th win of Adam Wainwright’s career… The baseball Gods were smiling on him, as he wasn’t really fooling any one last night… I do believe that Adam will hang ’em up once he gains win # 200… Go out on top… Not that he’s a quitter, just that the Cardinals aren’t in the playoff hunt this year, so what’s the use of going on any further if you’re Adam Wainwright? What a beautiful day, weather-wise, here yesterday! I had a great lunch with my spring training buddies, Dewey and Rick! A good time was had by all! We’ve had some unbelievable weather here the last 2 weeks, and I’m loving it! Stevie Ray Vaughn and Double Trouble greet me this morning with their song: Pride And Joy…
Well, the dollar pretty much drifted yesterday…. It was weaker, but only by a small margin… The BBDXY lost 3 index points from Tuesday’s close, but most of that loss was taken in the overnight markets… I read an article on Bloomberg.com about a hedge manager who says that the dollar is going to gain 5% in the coming weeks… He based his thought on the Fed / Cabal/ Cartel hiking rates a couple of times before we get to year-end…. Ahem… the Fed Heads would have to hike rates more than 300 basis points just to reach “real inflation” as calculated by John Williams at www.shadowstats.com
I’d also like to place a bet with this guy, for a shiny quarter, that the dollar won’t gain 5% in the coming weeks… I just don’t see how that happens, but, if, if, if, it did, the dollar would finally be out of the red for the year… So, that’s going to have to take a lot for the dollar to get past its current negative -3.34% loss for the year…
Gold started the day yesterday down $7 and never found a bid all day, ending the day down $9 to $1,913.80… Silver was able to find a bid, and a lot of them offset its early morning loss of 25-cents, and end the day flat as a pancake (Head East) and close at $23.15… A nice recovery for Silver on the day I must say!
The price of Oil gained a buck, and ended the day trading with a $89 handle. The 10-year was flat on the day, and ended the day with a 4.29% yield…
In the overnight markets last night… The dollar fought back again… This time the dollar gained 2 index points in the BBDXY to start the day at 1,251… The currencies seem to be held hostage by the Stupid CPI… Traders seem to be waiting to see what the report has to say about consumer inflation before making any strong move either way with the dollar/ currencies… Gold seems to be caught up in this too, as there’s been no real conviction to move higher in the recent trading sessions. Gold this moring is down $2 to start the day, while Silver has given up 29-cents to start the day…
The price of Oil remained above $89 overnight, while the 10-year’s yield rose to 4.31%… No big shakes there, just a bip here, a bip there, and pretty soon, we’re talking about real yields! HA ! I told you the other day that there is a slew of inventory in bonds coming to the markets very soon… and that’s going to push yields higher, I do believe, because bond traders will have to make the bonds attractive to buy…
I did come across this on Oil on zerhedge.com this morning: “Oil prices had been coiling for a few days ahead of this data and are breaking out now after OPEC reports that global oil markets face a supply shortfall of more than 3 million barrels a day next quarter – potentially the biggest deficit in more than a decade”
Well, as far as I’m concerned here, it sure is nice to see an asset trade on fundamentals… That’s all…
Ok, while perusing the internet yesterday, I came across an article on Kitco.com where the writer said that he was: “developing a gloomy outlook for metals”… And immediately, I clicked on it to read his thoughts, and it occurred to me while reading it that the short paper traders are achieving their goal… You see, the main reason the short paper traders do what they do, is because the Gov’t can’t have something like Gold or Silver become more of an asset in investment portfolios and take away from the dollar… This goes back to 1972, when Henry Kissinger and the head of the Senate, met and talked about how they must deter Gold from achieving great heights… This was because, Richard Nixon had removed Gold from the backing of the dollar, and the dollar was on its own from that point on…
So, the Gov’t needs to keep the lid on Gold, so you don’t want to hold it, and grow tired of all the engineered takedowns… So, if this guy at Kitco.com says he’s developing a gloomy outlook for metals, then he’s grown tired of all the short paper trading antics, and is throwing in the towel… And I say, Don’t Do It! You need to be steadfast in your conviction that Gold is a store of wealth, and that no mater what the Gov’t wants, you’ll stay the course! Stick to the Man, per se…
Here we go again with all the drama, and hand wringing and the “oh woe is me” statements from the lawmakers…. Here’s the skinny from USA Today.com “The House is back Tuesday to what is expected to be a fierce fight over government spending. While government funding technically expires on Sept. 30, the House has just 11 working days to pass a short-term funding extension – called a continuing resolution – to buy lawmakers more time to hash out the details of a spending package. But a group of ultra-right lawmakers from the House Freedom Caucus have drawn hard lines even before the House comes back into session. The group is openly threatening to leverage a shutdown if a continuing resolution does not meet their demands, such as more security on the southern border. “
Didn’t we just go through all that B.S.? Yes, Virginia there is a Santa Claus! I don’t know what else to say about all this saber rattling, except to say, ignore it… It’s all a drama they want to play out so that they look like they are working hard for Americans, when in reality, they only do things to hurt us… I’m just saying…
OK… well the Bank of Japan’s warning shot across the short traders’ bows has been getting a lot of playing time… Once again though, I’m going to point out that at this point, it’s all jawboning, which the BOJ has been known to spout about… After a few days, and the BOJ doesn’t follow through with a rate hike, and traders and investors will go back to selling the yen… Disappointment is the BOJ’s genes… I’m just saying…
Longtime readers know that I keep an eye on the Euro Wannabes… The moniker I put on the currencies of Poland, Hungary, and Czech Rep back in the day… I have to say that I am surprised at the volatility of the Hungarian forint… But in thinly traded currencies these huge shifts back and forth are easily accomplished, so I guess I’m not that surprised, just interested in them…
The euro has been range trading in recent sessions, and here, traders are waiting on the European Central Bank (ECB) to see what their rate hike intentions might be… In recent days, we’ve had ECBers out talking and not singing from the same song sheet… One might say that interest rates need to go higher to combat inflation, while another one might say that rates have gone high enough… I don’t know if this back and forth is an orchestrated effort to confuse the markets, if it is, then it has worked! If The ECB was run by Germany’s Bundesbank, you could bet a shiny quarter that they would be hiking rates at their next meeting which will be… drum roll please… Tomorrow! So, we don’t have to wait long to find out!
The U.S. Data Cupboard today, finally has something for us to see, unfortunately, it’ll be the stupid CPI for August… the stupid CPI is supposed to come in stronger than in July, as told to us by the so-called experts that were surveyed… I wouldn’t doubt it for a minute, given the rise in the price of Oil, and just knowing how sticky inflation can be… We’ll also see the Gov’t’s Budget report for August, and it’s not going to be pretty… I’m just pointing out…
To recap… The dollar drifted yesterday in the U.S. session after losing 3 index points during the previous night’s session the dollar remained down 3 index points in the BBDXY the rest of the day. The BOJ is getting lots of air play on their warning that they could be hiking rates soon, but Chuck reminds us that this is nothing more than jawboning, to keep the yen from spiraling out of control… Chuck ago points out that the BOJ is known to disappoint the markets, so there’s that!
For What It’s Worth… This article is from a fave economist of mine, and one that more people should follow what she has to say.. Stephanie Pomboy is her name, and in this article she talks about Corporations heading to bankruptcy, and it can be found here: Collapsing US Companies Could Be a Sign of Catastrophe to Come: Pomboy (businessinsider.com)
Or, here’s your snippet: “More US companies collapsed during the six months through June than any other half-year period since 2010 as historically high interest rates heaped pressure on American businesses, according to data published by S&P Global Market Intelligence. First-half bankruptcies outstripped even the same period of 2020 – when the pandemic wreaked havoc on the economy.
“It’s really something, listening to johnny-come-Latelys parroting my talking points on corporate bankruptcies (which none of them saw coming 6 MO’s ago). But they still fail to connect the dots. If they did, they’d be calling for a fiscal & monetary response that makes 2008-9 look like peanuts,” Pomboy wrote.
This is not the first time Pomboy has raised concerns of looming economic and market risks in 2023.
Last month, she warned that investors, while growing optimistic about the Federal Reserve eventually cutting interest rates, are still downplaying the fallout from the central bank’s aggressive policy tightening since early 2022.
“The markets don’t seem to be anticipating the pain before the pivot — they’re just anticipating the pivot,” she said in a recent Wealthion interview.”
Chuck again… I hear you Stephanie! Loud and Clear, but then you didn’t have to sell me on this thought, I’ve been banging the drum for Corporate problems for some time now!
Market prices 9/13/2023: American Style: A$ .6401, kiwi .5899, C$ .7371, euro 1.0731, sterling 1.2472, Swiss $1.1191, European Style: rand 18.9331, krone 10.6888, SEK 11.1332, forint 358.05, zloty 4.3097, koruna 22.8222, RUB 96.37, yen 147.46, sing 1.3619, HKD 7.8247, INR 82.98, China 7.2923, peso 17.26, BRL 4.9571, BBDXY 1,251.95, Dollar Index 104.81, Oil $89.21, 10-year 4.31%, Silver $22.86, Platinum $901.00, Palladium $1,246.00, Copper $3.77, and Gold… $1,911.67
That’s it for today… Another beautiful day is on the docket for here again today, and the rest of this week! YAHOO! My Cardinals have one more game tonight in Baltimore before coming home to play the Big Bad Phillies, who stomped on the Cardinals pretty good when the team last visited them in Philly… The Poor NY Jets… Their fans were so wound up and lathered up about having Aaron Rodgers as their quarterback this year… But on the 4th play from scrimmage Rodgers went down with a torn Achilles Tendon… OUCH! What a letdown for the team and the fans… not to leave out, Aaron Rodgers! I think of all those fantasy football geeks, that picked Rodgers #1… Too bad, so sad… I used to be one of those fantasy football geeks, and then I grew up and became an adult! HAHAHAHA! Nah, i quit because I had become jaded on the game… It’s taken me about 4 years, but I still can’t watch the games like I used to… The band, Smith, takes us to the finish line today with their song: Baby It’s You… (Their version of the song, which I prefer) I hope you have a Wonderful Wednesday today, and Please… Please, Please Be Good To Yourself!
Chuck Butler