Of course, that narrative is absolute hogwash. One look at the charts of the major indices prove that there were forces at work other than a superlative jobs report which contributed to the quick and sustained upticks in the price of stocks on Friday, March 5.
Dow Jones Industrial Average
NASDAQ
S&P 500
The above charts show the Dow, NASDAQ, and S&P 500 for the day. It's clear that all of them responded positive at the open, but quickly faded, then caught bids and continued to rally for the rest of the session. That action can't logically be tied to a smashing jobs report. If that had been the case (non-farm payroll data was released at 8:30 am ET), stocks would have been much higher at the open and remained at high levels through the day, as has been the case in all such instances in the past. No, the stock market could care less about another 379,000 slobs or slaves or plebes getting jobs. Interest rates, inflation fear, the stimulus bill, and other macro indicators have been moving this market.
Further, eventual gains on all the main indices were uniquely uniform, not erratic and skewed, as has been the norm for many months. In other words, the NASDAQ is usually the leader or loser by an order of magnitude, but on this day, it was nearly in line with the others. See the "At the Close" figures at the bottom of this post.
And, it all happened at the exact same time: 11:30 am ET, so the dramatic reversal can be attributed to either luck, every trader on the planet hitting their “BUY” buttons simultaneously, or the PPT… or a combination of those.
Whatever the cause, US equity markets were saved from waterfall-like declines as was the case on Thursday. The hot jobs report provided the perfect alibi for the glad-handers on TV and over at the Wall Street Journal.
Overall, the week was exciting, invigorating, and, in the end, constructive to the “all is well” narrative from the Fed. The Dow and NYSE Composite bounced off their 50-day moving averages, the S&P closed at its 50-day MA, and, while the NASDAQ ended the week below its 50-day moving average, it managed to claw itself out of correction territory on an intraday basis. The Dow and S&P 500 are both down by less than four percent from their very recent all-time highs. So, all around, success. Clink of glasses, pats on backs, jobs well done.
For now.
There will be hell to pay, it’s just not going to be paid this week. There’s still another week of trading ahead, and that will be devoted to parlor games involving the cretins currently in occupancy at the US Capitol, as the Senate ground out provisions in the COVID stimulus (the third in this series) bill handed to them by the House in record time, making some basically cosmetic changes and sending the bill back to the House for a final vote before passing it over to the current resident of the White House (whoever that may be).
The morons have been posing and preening as usual, acting like they’re doing important work. The majority of these useless idiots have never done an honest days’ work in their lives. Instead, they’re wrecking the economy, the society, and countless lives with their bribery and theft masqueraded as “stimulus.”
On that point, the people of the United States don’t need any more stimulus. The $1.9 trillion is being directed at state and local governments - a handout to shore up woefully underfunded pension accounts - an extension of additional unemployment insurance benefits, and $1400 checks to anyone earning less than $75,000 a year. Most measurements of net worth, income, retail spending and other data involving the general health of individuals and families are up sharply from a year ago when factoring in additional unemployment insurance checks for 35-45 weeks, stimulus checks, rent and mortgage moratoria, and other easy street incentives rolled out by governments over the past year.
The money will be ill-spent, but much of it will go right into the coffers of major corporations listed on the various exchanges, either in the form of outright purchases or stock investments, boosting their top-and-bottom lines, making everything on Wall Street look entirely rosy and wonderful.
Such appearances have to be kept up, unless the serfs storm the Capitol for real or the military turns its guns on the insiders rather than look like they’re protecting them.
As weeks go, this one was fairly volatile, as all assets had rather outsized price movements. The big winner was OPEC+, as the price of oil rocketed higher when this cartel of oil-producers decided against production ramps. They, and the traders in oil futures, are attempting to convince everybody that there’s demand (that’s funny) and a shortage of supply (that’s even funnier). In any case, they’re doin OK, since WTI crude oil shot up this week from $61.50 to $66.28 a barrel and prices at the pump are sure to follow. A year ago, the price per barrel was $41 and dropping. Yes, we need stimulus checks… to pay for higher-priced gasoline and fuel oil.
One problem, though, is that oil futures are in backwardation, with the prices for future contracts lower than the current price. Usually, it’s the other way around, a condition called contango. For instance, November WTI contacts are at $61.94. Who is willing to pay spot ($66.28) when you could buy it for less in eight months? Or, for $44.38 in August of 2023. That’s the bid right now. It’s backwards, thus, backwardation. Somebody - actually, a lot of people - don’t believe this high price is sustainable longer term.
Not to be outdone, the treasury complex has gone completely bonkers. If the price of oil is flashing inflation signs, the 10-year note is a wailing siren for a liquidity crisis.
On August 4, 2020 - incidentally, about the same time gold was setting a new all-time high - yield on the 10-year was a measly 0.52%. On Friday, March 5, 2020, it closed at 1.56%, triple the yield in just seven months. The short explanation is that investors are demanding a higher payout (interest rate) because they see more risk and more inflation on the immediate and mid-term horizons.
Those buyers in 2020 accepting 0.52% or 0.93% (12/31/20) are completely back-doored on their investments. They paid premium prices for protection and now can’t sell those bonds unless they’re willing to accept a massive write down from par. Nobody wants a bond returning less than one percent when current issues are fetching 1.5% or more, especially when real inflation (dollar deterioration) - and not what the Fed or some government agency tells you - is running at six to eight percent or higher and about to go parabolic.
Beyond the obvious, the Fed itself is snatching up all the TIPS (inflation protected) available to keep the inflation bugaboo as quiet as possible, but it’s raging right along. Anybody who buys groceries on a regular basis will tell you that. The best bond traders are not stupid. They clearly see the end of the 40-year secular bull market in bonds and anticipate a period of gnarly, grizzly bearish conditions for money. Conditions are very tight and about to get even tighter. Banks already are reluctant to lend, thus, the emergence of stimulus checks, mortgage and rent moratoriums, and a slow growth to no growth economy. The transition from lockdown to some kind of ordinary is going to be a long slog with many pitfalls and false perceptions, but the trend continues toward complete repudiation of the economic conditions in place and the death of fiat currencies, already worth tiny fractions of their original valuations.
It’s taken more than 100 years since the Federal Reserve System was established in 1913, but they’ve managed to squeeze nearly every last penny from the dollar. The current estimate is that the dollar has lost 98% of its value over those 108 years. Congratulations to Jerome Powell and Janet Yellen. Here are your bags of merde.
As the world emerges from lockdown hell, the recovery meme is tantamount to going from solitary confinement to the general prison population. Sure, it’s an improvement, but it still isn’t good. The bond market is imploding, and with it, the world’s towers of debt will crumble to dust.
Keeping with the money-for-nothing theme, precious metals are deemed by the powers that be to be near worthless investments and not even good hedges against severe economic conditions. Gold was down 1.94% on the week, falling from $1734.40 to a close at $1700.80. Silver got clubbed like the proverbial baby seal, dropping from $26.68 the ounce to $25.24 at week’s end, a loss of 5.4%.
While somewhat depressing for goldbugs and silver stackers, the low, low prices do represent a buying opportunity, if any price even within 10% of spot can be had at local or online dealers.
Here are the most recent prices for common gold and silver items sold on eBay (numismatics excluded, shipping - often free - included:
Item: Low / High / Average / Median
1 oz silver coin: 33.99 / 52.00 / 40.77 / 39.54
1 oz silver bar: 36.00 / 56.53 / 45.76 / 44.42
1 oz gold coin: 1,845.04 / 1,929.10 / 1,876.79 / 1,879.00
1 oz gold bar: 1,800.00 / 1,950.48 / 1,834.42 / 1,817.28
What the current eBay prices are showing is that the most recent short raids in precious metals has caused some slippage at the retail end, but not to any severe degree.
The new Single Ounce Silver Market Price Benchmark for this week is $42.62, a significant decline from last week's price of $44.34, and the first price decline in five weeks.
Last, but certainly not least, here’s Max Keiser with a double dose of Stacy Herbert, explaining and extrapolating current economic conditions into real world applications.
At the Close, Friday, March 5, 2021:
Dow: 31,496.30, +572.16 (+1.85%)
NASDAQ: 12,920.15, +196.68 (+1.55%)
S&P 500: 3,841.94, +73.47 (+1.95%)
NYSE: 15,251.83, +292.42 (+1.95%)
For the Week:
Dow: +563.93 (+1.82%)
NASDAQ: -272.20 (-2.06%)
S&P 500: +30.79 (+0.81%)
NYSE: +241.37 (+1.61%)
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