There's no doubt that there was manipulation and tampering with the presidential vote totals from November 3, 2020, and probably of a good number of Senate and House races as well, especially the two just stolen on Tuesday in Georgia, giving Democrats and Republicans an equal 50-50 split in the Senate (Doesn't really matter. The Republicans were in on the scam, too.).
On Friday and Saturday, Twitter, Facebook, Google, Apple, and Amazon continued efforts to silence President Trump and other conservative voices. The president was banned on Twitter and Facebook, all accounts shut down, along with others like General Flynn, attorneys Lin Wood and Sidney Powell, Rush Limbaugh, many independent bloggers, and many others. Some have estimated Twitter purged more than 10,000 users over the past few days.
In an attempt to avoid over-politicizing this space - there are plenty of websites which cover that better - let's get right to the economic side of the equation.
Amid all the turmoil in the political space, just like public sector employees who haven't missed a single paycheck over the last nine months, Wall Street traders didn't skip a beat over the week, sending all the major averages to record highs.
The real action, however, was at the bond market where the 10-year note exploded higher, which, in the upside-down world of fixed income, meant a huge sell-off was underway. This only makes sense because the Fed believes they can make inflation happen while keeping interest rates near zero. Voodoo Economics has resurfaced, and it's located in the Eccles Building. There are trillions of dollars in malinvestments now, and more to come.
Yield on the 10-year note, which was as low as 0.54% on March 9, 2020, opened the new year on January 4 at 0.93%. By week's end, January 8, it was yielding 1.13%, a full 20 basis points higher. Uh-oh! This is not what the Fed had in mind, but it is what happens when you debase your currency, keeping the printing presses going 24 hours a day. Money in fixed income flees to the risk assets in the stock market.
Yield on the 30-year bond rose, from 1.66% on Monday to 1.87% as of Friday's close. Monday, and moving forward, is going to be interesting, to say the least.
In crypto-land, Bitcoin and Etherium continued their steady, unstoppable ascent. Bitcoin, which touched down at $27,678 on Monday, got as high as $41,986 on Friday, and is holding above $38,000 as of this writing. Etherium rocketed from $886 (Monday) to $1350 (Sunday), an impressive move.
Precious metals continue to be erratic, thanks in large part to being driven solely by the derivative, futures market. On Friday, both gold and silver were devastated by the criminal enterprises controlling the price. Silver was hammered, reaching nearly $28 an ounce on Wednesday. Friday's futures trading took it down as low as $24.41 (that's not a misprint) before closing out the week at $25.40.
Gold was walloped in similar manner. After hitting a three-month high at $1957.20 on Wednesday, controllers took it down as low as $1828.20 on Friday, settling out for the week at a depressing $1850.00.
Buyers and sellers were not amused in the least, as asset values for everything other than real money - which gold and silver have proven to be over thousands of years - were shooting higher. Buyers of physical sensed bargains, but paid severe premiums as supply continues to be strained. This is demonstrated by the weekly survey of prices on eBay, below.
The latest prices for common gold and silver items on eBay (numismatics excluded, shipping - often free - included):
Item: Low / High / Average / Median
1 oz silver coin: 31.05 / 52.00 / 39.64 / 38.48
1 oz silver bar: 34.30 / 49.50 / 39.66 / 39.52
1 oz gold coin: 1,915.00 / 2,054.59 / 1,976.41 / 1,969.40
1 oz gold bar: 1,859.00 / 2,027.00 / 1,953.40 / 1,952.21
Oil continued to rise through the week as anybody checking gas prices will attest. WTI crude and gas at the pump are at the highest prices since March of last year even though most of Europe and half of the US is on lockdown. It's criminal behavior, as prices should be leveling off or dropping post-holiday.
The coming week is going to be epic. Beyond the political struggle, which is rapidly descending into armed camps in Washington, DC (9,000 National Guardsmen on the ground for an indefinite stay) with congress calling for President Trump's impeachment, again, while the president refuses to concede the election.
Earnings begin rolling out this coming week, though on a limited schedule due to the calendar and annual reports being prepared. Friday should be the most interesting day, with reports prior to the opening bell from banking giants JP Morgan Chase (JPM), Citi (C), Wells Fargo (WCF) and PNC Financial (PNC). The rest of the biggest banks - Goldman Sachs (GS), Morgan Stanley (MS), Bank of America (BAC) - will report the following week. It will be especially interesting to note which banks, if any, begin to report credit loss reserves that have been building, largely unreported, since the end of the first quarter. Millions have had credit card, mortgage, and personal loan deferrals or forbearance which the banks have not had to report due to regulations enacted under the CARES Act.
Good Luck!
At the Close, Friday, Janaury 8, 2020:
Dow: 31,097.97, +56.84 (+0.18%)
NASDAQ: 13,201.98, +134.50 (+1.03%)
S&P 500: 3,824.68, +20.89 (+0.55%)
NYSE: 14,966.83, +38.08 (+0.26%)
For the Week:
Dow: +491.49 (+1.61%)
NASDAQ: +313.69 (+2.43%)
S&P 500: +68.61 (+1.83%)
NYSE: +442.03 (+3.04%)
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