The slow churn higher had "stimulus checks" writ large all over it. Pin money freshly distributed from the federal government to its subjects has that kind of effect. Gains were likely hold down by institutional money racking profits on selected issues. With markets soaring, it's worth noting that first quarter results will begin flowing to the street, leading off with bank stocks, the bulk of the biggest reporting this coming week. The most interesting aspect will be whether credit loss reserves are amped up by consumer lenders, those being primarily, JP Morgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC), and Citigroup (C).
The breakdown of release dates goes like this:
What's expected are solid, if not spectacular, results from the banking sector. As a group, banks and secondary lenders have been shielded from the worst financial effects of the pandemic by easy monetary policies at the Fed, widespread mortgage forbearance, and loose reporting standards. If there's any pain in the sector, it won't be substantial nor widespread.
In the treasury complex, some degree of yield curve control has been undertaken by the Federal Reserve. The 10-year note dropped five basis points over the week, from 1.72% to 1.67%. The 30-year was steady, losing one basis point, from 2.35% to 2.34%. Persistent fears of inflation may be premature or altogether unfounded. The Fed continues to jawbone that rising rates and price inflation are transitory or not sustainable, despite indisputably rising prices for food, many consumer goods, building supplies, durable goods, and transportation.
The Fed seems to have at least one blind eye when it comes to reporting inflation.
Oil continued to trend lower during the week, the price of WTI crude close last Friday (4/2) at $61.45 per barrel and fell out of favor right away Monday morning, ending the session at the low of the week, $58.65. Price did not recover much for the remainder of the week, getting as high as $59.77 before finally finishing Friday at $59.32. The declines over the past three weeks began showing up at the gas pump though the national average, according to AAA, remains elevated, at $2.86 a gallon.
States bordering the Gulf of Mexico appear to be declining fastest, a trend that could spread North and West should the decline in oil pricing extend into summer months.
Cryptocurrencies made some noise during the week as the total market cap for the entire crypto space topped $2 trillion, with Bitcoin holding the bulk of that, $1.1 trillion. The granddaddy of crypto popped above $60,000 early Saturday, as a massive spike late Friday night boosted the price from $58,000 to $61,218.97 as of 1:00 am ET Saturday.
The move marked the second time the price of Bitcoin had exceeded $60,000, the first such occurrence less than a month prior, on March 13, when it reached an all-time high of $61.788.45. Etherium has also been on a tear, rising nearly 20% in the past month to its current level, above $2,100. Crypto news reports were understandably excited, with predictions of BTC $200,000 and higher were being circulated once again.
To say the least, remarks by the SEC's Hester Pierce (aka Crypto Mom) that "you'd have to shut down the internet" in order to ban bitcoin or cryptocurrencies, were impactful. After noting that the window of time for banning Bitcoin has passed, she further added, "I don’t see how you could ban it. You could certainly make the effort. It would be very hard to stop people from [trading Bitcoin]. So I think it would be a foolish thing for the government to try to do that."
What Pierce pointed out has been the general thinking inside the crypto community for some time. Governments around the world surely would like to regulate currencies, be they foreign, domestic, cash, gold, silver, jewels, bitcoin or barter, but there's a major barrier to outright banishment, being that cryptocurrencies are peer-to-peer, decentralized, and outside the realm of fiat currencies. There's no need nor want for government involvement. Government and central banks are just going to have to learn to deal with a multi-currency world going forward, one which is very likely to be dominated by non-government-based currencies with transparent, though largely untraceable, transactions.
Related, gold and silver investors finally caught a break, with precious metals showing signs of bottoming over the past week. With gold falling as low as $1685.25 (3/30), it ended last week (4/2) at $1729.80. Through Friday's close in New York, gold finished at $1744.10, though it had risen to $1756 just a day before.
The outlook was also enthusiastic for silver, which ended the week at $25.25, but had been as high as $25.58 on the COMEX Thursday. Both metals have been recently downtrodden, some say due to the emergence of bitcoin and crypto in general as an alternative, while others complain of price manipulation via the LBMA price fixes and COMEX futures trading. The truth probably lies somewhere in between.
Presented below are the most recent prices paid for common one-ounce gold and silver items on eBay (numismatics excluded, shipping - often free - included):
Item: Low / High / Average / Median
1 oz silver coin: 37.70 / 51.00 / 41.29 / 40.00
1 oz silver bar: 37.75 / 47.00 / 42.69 / 42.85
1 oz gold coin: 1,877.51 / 2,103.15 / 1,944.58 / 1,943.39
1 oz gold bar: 1,837.64 / 1,895.00 / 1,848.42 / 1,844.34
This week's survey revealed a couple of interesting side notes, especially pertaining to gold coin availability. Searches on eBay for gold coins without numismatic significance, like SA Krugerrands or US Eagles, have been in decline for months, but this week were extended. The common search for "1 oz gold coin" lasted through nearly 500 entries before finding a dozen samples representative to Money Daily standards. This indicates that gold coins are being hoarded, which would make plenty of sense, since the price of gold has been lower recently and gold coins are the standard for individual investors.
In that same vein, prices for gold bars were seen to be roughly $100 lower in the sample and there was an abundance of them available. That particular price differential has been noted before, though this gap is the largest in more than a year of tracking prices and the gap seems to be widening.
On the silver side of the ledge, the opposite was the case. On average, a silver bar was selling for $1.40 more than a silver coin, with the median price showing a $2.85 gap ($40.00 vs. $42.85). The simple conclusion is that gold coins of similar weight are worth more than gold bars, while the opposite is true - though to a lesser extent - for silver. In the end, all these samples are one ounce. The difference in price is likely an anamalous preference.
Money Daily’s silver pricing model, Single Ounce Silver Market Price Benchmark (SOSMPB) stands at $41.71, down 43 cents from last week’s $42.14, though still comfortably in the range above $40/troy ounce.
AT THE CLOSE, FRIDAY, APRIL 9, 2021:
Dow: 33,800.60, +297.03 (+0.89%)
NASDAQ: 13,900.19, +70.88 (+0.51%)
S&P 500: 4,128.80, +31.63 (+0.77%)
NYSE: 15,956.37, +69.81 (+0.44%)
FOR THE WEEK:
Dow: +647.39 (+1.95%)
NASDAQ: +420.08 (+3.12)
S&P 500: +31.63 (+0.77%)
NYSE: +204.13 (+1.30%)
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