Dow Ends Losing Streak at 10; Up 0.036% and We're Supposed to Be Relieved?; House Bill Fails, Government Shutdown Looms

As might be expected, the week looks pretty bad with potentially increased volatility via Friday's quad-witching expirations.

The Dow, which managed to post a small gain Thursday, is down sharply, off 1485 points through Thursday’s close. If the Dow closes near that level or lower, it would be the largest weekly drop in at least two years. The NASDAQ has lost more than 550 points over the past four days, while the S&P has shed 180 points, or just more than three percent.

In case you might have been suspicious, the entire U.S. stock market is a sham. How else do you end a 10-session Dow losing streak by barely holding on in the final minutes of trading to get +15.37, a gain of 0.036%?

Besides the Dow's miraculous streak-ending, last gasp, everything else was down on Thursday: the Russell 2000, NASDAQ, S&P 500, Dow Transports, Oil, Gold, Silver, Bitcoin, were all down.

For better or worse, this was the first gain in 11 sessions and only the second gain in the last 14. From December 4 through the 19th, the Dow lost 2,671.80 points, dropping from 45,014.04 (an all-time high BTW) to 42,342.24, about six percent.

So, Thursday, it was up 15 points. That doesn't even register as a rounding error, and Friday's shaping up to be a test of will for even the most intrepid traders.

For those interested in charts, patterns, and technical analysis, the major averages have been exhibiting early signs of bear market patterns, up early, but closing lower. Daily charts reveal these obvious markers. Thursday was textbook. The Dow, for instance, opened with a bang, at 42,787.85, up more than 540 points just minutes after the open, but sold off all day, closing very near the lows of the day.

That's not a sign of a healthy market.

On the economic front, the final estimate for third quarter U.S. GDP showed the economy grew at an annualized rate of 3.1%, well above the previous reading of 2.8%, a number that is barely believable. Stripping out government from the GDP calculation renders GDP in the red almost every quarter. GDP is hardly a good measure of a nation's overall economic condition because government produces nothing other than paperwork and debt.

Other data out Thursday morning showed weekly unemployment claims dropped from the 242,000 seen the previous week to 220,000 in the latest reading. The four-week average rose by 1,250 to 225,500.

Being so close to the holidays, weekly claims are likely to be lower than normal as employers are less inclined to hand out pink slips during the festive season. Jobless claims are likely to ramp up in January and February as Trump's DOGE team goes to work and businesses lay off holiday hires.

Adding to the unemployment lines will be layoffs from Big Lots, which plans to close all of its remaining 963 locations after its planned sale to Nexus Capital Management fell through. The cheap junk which lined the shelves of the now-bankrupt company will be even cheaper in days ahead, just in time for Christmas!

In congress, the scaled-down (116 pages, down from 1,547 in the initial, pork-laden proposal) emergency CR put forward by House Speaker Mike Johnson failed by a vote of 174-235-1, with 38 Republicans voting against the measure. Legislators have until midnight Friday to pass some form of funding for the government or shut it down just days before Christmas.

Due to House rules which require three days for members to read bills, any measure put forward on Friday would require a 2/3rds majority under suspended rules. The measure which failed Thursday didn't even come close. Early Friday morning, Speaker Johnson arrived on Capitol Hill, reportedly saying, "so y’all stay tuned, we’ve got a plan."

What that plan is, nobody at present knows, though incoming VP JD Vance - who is still a sitting Senator from Ohio - was reported to be meeting with the Speaker.

Muddying the waters is President-elect Trump's desire for the funding bill to include language extending or suspending the debt ceiling, which has been suspended until January 1, 2025, a kind of poison pill for the incoming administration. Without new legislation, the ceiling will be raised on that date to match whatever borrowing the government has undertaken. The government will use what's known as "extraordinary measures" to keep the government from defaulting, which would likely keep government functioning into the summer of 2025, so there's really no urgency on that front.

As usual, democrats are blaming Republicans and vice-versa. If the usual script plays out, congress will approve some kind of stop-gap measure at the last minute, Biden will sign it, and everybody will leave Washington and head home for the holidays.

Overnight, bitcoin was hammered lower in what may be turning into a leverage/liquidity event. Margin calls certainly were issued during Wednesday's slide and bitcoin seems to have taken over the role gold used to play during such events. Not so long ago, dealers kept excess funds in gold or gold futures and redeemed them when they needed cash. Bitcoin seems to be the choice these days as it appreciates faster than gold (and also loses ground quicker).

Bitcoin, which made an all-time high just above $108,000 on Tuesday, fell to as low as $92,296 just this morning.

Ironically, gold bounced off $2,600 and is up around $10 this morning. Silver remains depressed, trading in the low $29 range on the COMEX.

Futures are pointing to a troublesome open. An hour before the opening bell, equity futures were down sharply, but began rising sharply right at 8:30 am ET, when the BEA released the Fed's preferred inflation gauge, Personal Consumption Expenditures (PCE) price index for November, which came in below Wall Street forecasts, suggesting that inflation continues to slow, albeit at a snail's pace.

That's providing some relief, but all stock futures continue trading fairly deep in the red.

Friday's session looks to be quite the show.

At the Close, Thursday, December 19, 2024:
Dow: 42,342.24, +15.37 (+0.036%)
NASDAQ: 19,372.77, -19.92 (-0.10%)
S&P 500: 5,867.08, -5.08 (-0.087%)
NYSE Composite: 18,958.21, -28.75 (-0.15%)

Dow Down 10 Straight; NASDAQ, S&P, Gold, Silver, Bitcoin, Oil, Bonds Join the Rush to the Basement

Editor's Note: For those who might sense a little (or a lot) bit of joy on the pages of Money Daily whenever stocks decline, you're right. Anybody with a realistic outlook should have seen that stocks were stretched to extremes weeks or even months ago and caution has always been advised here, whether stocks are up, down, or treading water, and so, when markets correct, it's a kind of validation.

Nobody is happy losing money and only psychopaths or sociopaths are happy seeing other people lose money, but, it's a cold, often cruel world, and if fat cat bankers and hedge fund billionaires lose some dough, well, maybe it's worthy of a little celebration. The people who really get hurt badly in situations like the one that appears to be unfolding are those passive "investors" stuck 401k plans or other vehicles over which they have little to no control, and that's a shame, though really, they have nobody but themselves (and their greediness) to blame.

Everybody got hurt today. All assets were marked down, but some worse than others. The difference lies in asset allocation. Paper assets got slaughtered. Owners of gold, silver, real estate, business assets still have what they started with, only the perceived value is lower. With stocks, bonds, bitcoin, etc., it's more of a reality. Those got marked down and some may not recover. The warnings have been apparent for some time (the Dow doesn't lose ground nine straight sessions for no good reason) and Wednesday's drawdown must be put into perspective. It's probably the beginning of something much larger. -FR

Anybody who was bidding up Dow stocks prior to the FOMC rate decision on Wednesday got their rumps handed to them in a memorable afternoon of relentless selling pressure extending the Dow's losing streak to 10 sessions, down

At 2:00 pm ET on Wednesday, December 18, the FOMC of the Federal Reserve issued the following press release:

Recent indicators suggest that economic activity has continued to expand at a solid pace. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.

In support of its goals, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage?backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller. Voting against the action was Beth M. Hammack, who preferred to maintain the target range for the federal funds rate at 4-1/2 to 4-3/4 percent.

For media inquiries, please email media@frb.gov or call 202-452-2955.

At the same time, the Fed released economic projections [PDF] of FOMC meeting participants, which showed the majority (10 of 19) thought the federal funds target rate would be between 3.75% and 4.00% in 2025, implying that the Fed may only be cutting the rate two more times next year, most likely at the next two meetings, in January and March.

Longer term, the projections were between 3.00% and 4.00% for 2026, with a slight bias toward the lower end of that range. The projections for 2027 centered around 3.00-3.25%, and longer run from 2.75% to 3.00%.

Historically, these projections seldom turn out to be correct, as economic conditions change in unforeseen ways. These current projects likely fail to take into account actions and fiscal policies by the incoming Trump administration, which may be more austere than the Federal Reserve wishes to admit.

Wall Street's reaction was decidedly negative, sending the Dow down by more than 300 points immediately after the release, erasing gains from earlier in the day. The NASDAQ and S&P, which were hovering just above the flat line prior to the announcement, sank into negative territory.

During Chairman Powell's question and answer period, he stated, "It's pretty clear we've avoided recession." Circle that line because it may turn out to rank right up there with "sub-prime is contained," and "inflation is transitory." The coming six to 18 months are fraught with downside risk, especially considering the establishment of Elon Musk and Vivek Ramaswamy's Department of Government Efficiency (DOGE), their stated goal being reducing government outlays by as much as $2 trillion within the next 18 months (by July 4, 2026).

At the end of the day, the Fed's latest policy decision gave investors plenty of cover to trim exposure and take profits before year-end. What happens next is anybody's guess, but, weighing the direction of stocks and bonds of late against future developments in congress and by the White House, odds and indications seem to be anticipating shocks to the U.S. economy in the coming year.

This flushing of stocks should serve to mark the end of the rally that began some 13 months ago, in late October of 2023. Comprised of excessive valuations and hype surrounding Artificial Intelligence (AI), stocks posted extraordinary gains which were based largely on flawed data (employment) and loose economic conditions. Signals were given by the Fed when they began a rate-cutting cycle in September, sensing that the U.S. economy was headed for recession.

Those fortunate enough to buy stocks in November and December of last year have now sold them for outstanding gains and a lower capital gains tax if held for more than a year. As is usually the case, those who joined the party late - from July through November are now looking at losses and hoping for a rebound in 2025.

Good luck with that.

Today's losses were the largest in well over a year's time on all the major indices. Anybody who is looking for a "Santa Claus" rally within the last eight trading days of the year might better consider hoping for some January froth, which, as any expert trader will attest, is not a cogent strategy.

The worst of it all may have been the radical downturn for recent buyers of bitcoin, which dumped nearly five percent, down more than $5,000 when equity indices closed. The slide into the evening and by early morning the price had descended below $99,000. There's been some comeback early morning Thursday, but bitcoin remains a purely speculative play.

Equally extreme was the move lower in gold and silver. Gold, which has been in a downtrend since just prior to the election, was slaughtered today, losing $60, down more than two percent. Silver was even worse, down nearly four percent, to $29.77, a three-month low. It would not be surprising to see both gold and silver drop even further as the days until Trump's inauguration dwindle and then his presidency becomes reality.

Gold breaking below $2,600 would not br significant. Silver losing touch with $30, is, and such slippage could usher in even more panicky Christmas-related selling, more wild naked shorting in the futures market and a cascading effect that could pull gold down with it. Remember: the Fed hates competition.

From a speculative or long-term position, a buying opportunity is being set up for those who enjoy the benefits of real money, i.e., gold and silver. Silver at $30 is not support. A range between $26 and $28 is probably a near-term bottom. In the case of a true crash of stocks into a bear market - which could happen - silver will be even lower, so, keep some cash handy.

Chris Irons at Quoth the Raven's Fringe Finance has an interesting take on Wednesday's market mayhem and leverage.

Also of note, Gregory Mannarino closed all his equity positions yesterday, joining Warren Buffett in the all-cash club, and, the Shiller PE, which recently was as high as 38.88, has dropped to a more reasonable 37.36, but is till well above the mean (17.19) and median (16.01). Reversion to the mean is an incontrovertible physical reality. Timing it is another thing altogether.

Bottom line, Wednesday's cram-down was not a one-off. If anything, the NASDAQ and S&P are just beginning to catch down to what the Dow was suggesting the past ten days. Topping it all off, like clockwork, congress is looking very much like it's going to create yet another crisis by shutting down the government Friday night. The continuing resolution (CR) put up by House Speaker Mike Johnson is so full of pork, provisions protecting congress from being investigated, and giving themselves another raise that even his own members are calling him out on it and a new, "plan B", cleaner CR is being considered

Stay tuned. This is only the first act of desperation.

For conspiracy theorists far and wide: shut down the government, declare an emergency, do not ratify the electors on January 6, postpone Trump's inauguration. Anybody who thinks drones flying around New Jersey are some kind of hoax knows little of the depraved behavior those about to lose power are capable of foisting upon the public and their enemies.

They will stop at nothing.

With less than an hour before Thursday's opening bell stock futures are exhibiting an overwhelming degree of hubris and misdirection, as if buying the dip at the open would be an appropriate action (hint: it's not). Dow futures are up more than 300 points, NASDAQ futures are ahead by 140, and S&P futures are up 44 points. Yeah, sure.

WTI crude oil has bounced back over $70, and bitcoin has rebounded to around $102,000. Gold and silver remain under pressure.

Today's magic numbers are 33 (days until Trurmp's inauguration), 7 (days until Christmas), and 8 (trading days left in 2024).

At the Close, Wednesday, December 18, 2024:
Dow: 42,326.87, -1,123.03 (-2.58%)
NASDAQ: 19,392.69, -716.37 (-3.56%)
S&P 500: 5,872.16, -178.45 (-2.95%)
NYSE Composite: 18,986.96, -530.65 (-2.72%)

Dow Losing Streak at Nine; Fed's FOMC Likely to Cut 0.25% Today; Wall Street Reaction May be Muted

US stocks suffered declines on Tuesday, with the Dow logging its ninth consecutive drop, its biggest losing streak in 46 years.

The last 9-day losing streak for the Dow was in February of 1978. Prior to that, the index suffered an 11-day losing streak in 1974 and another in 1971.

Stock futures are suggesting that the streak may end right at nine. Dow futures are up 125 points a half hour before the opening bell, thouogh they are well off their highs. NASDAQ futures have fallen into the red with S&P futures up marginally.

The day's trading will center around the Fed's FOMC interest rate policy decision at 2:00 pm ET, with Chairman Jerome Powell's press conference and the Fed's economic projections, complete with dot plots showing expectations for federal funds target rate direction through 2025 and beyond.

While the market will try to make sense of the Fed's posture, expectations, and Powell's subtle signals, nothing that happens today, except in the improbable case that the Fed doesn't cut from 4.50-4.75% to 4.25-4.50%, will matter very much in the long term because the incoming Trump administration is likely to tear up the playbook and institute new policies that will change the dynamic of how the government and the Fed handle deficits, government funding, and the direction of the country.

What interested parties will be looking for are signs of whether the Fed plans to continue cutting rates and where they eventually land. Projections so far have the Fed pausing at around 3.25-3.50%, implying four further rate cuts spread across the first two quarters of 2025. There are FOMC meetings set for January 28-29, March 18-19, May 6-7, and June 17-18. Cuts of 25 basis points would align with Trump's forced austerity policies for the government and continue to fuel speculation that the United States will follow Europe into recession early in the coming year.

Notably, the next FOMC meeting will occur after Trump's inauguration. Judging by the speed at which Trump has made his choices to fill key administration positions, he's likely to unleash the DOGE of Vivek Ramaswamy and Elon Musk via executive order on the first day in office via executive order. Presidential observers expect more than just a few executive orders from President Trump in his first few days, shaping his domestic policies with strong leanings towards efficiency and de-regulation.

While Trump's plans should eventually result in renewed growth for the U.S. economy, there's likely to be some disruption at the start. Entire departments could be defunded or downgraded, with budgets trimmed to bare bones and employee layoffs via Reduction in Force, over which federal unions would have no power to protest.

With Trump and his team on a cost-cutting expedition, expect howls from the entrenched congress and their supporters in the federal bureaucracy. The administrative state is not going to submit to its own demise without a fight.

That is why today's events are likely to produce more noise than signal about the future of U.S. markets, policies, and growth potential.

There is a good chance that the Fed won't reveal much today and even if they do, Wall Street insiders may interpret it with an ample supply of skepticism.

Elsewhere, bitcoin has backed off slightly, trending just below $105,000. The slump in gold and silver continues though the Fed's announcement may foster some change there. Oil is higher, though there still doesn't appear to be much conviction in higher prices. The world economy is obviously slowing and oil price is a key indicator.

At the Close, Tuesday, December 17, 2024:
Dow: 43,449.90, -267.58 (-0.61%)
NASDAQ: 20,109.06, -64.83 (-0.32%)
S&P 500: 6,050.61, -23.47 (-0.39%)
NYSE Composite: 19,517.61, -110.07 (-0.56%)

Dow Losing Streak Reaches Eight; Fed Readies to Cut Key Rate Another 25 Basis Points

The start of a new week didn't go so well for holders of stocks in the Dow Jones Industrial Average, which closed lower for an eighth straight session, the longest losing streak since June, 2018. The Dow fell 110 points while the S&P and NASDAQ posted gains.

As the opening bell approaches, stock futures suggest that Tuesday might not be much better. Dow futures are down nearly 200 points, with NASDAQ futures off 60 and S&P futures down 23 points.

What's causing the malaise in the blue chips may be tied to concerns over Donald Trump's proposed tariffs. Since many of the 30 companies listed on the Dow serve diverse multi-national markets, there is fear that other countries would impose tariffs as reprisals to the U.S., possibly sparking a global trade war.

Alongside that proposition, the dis-inversion of the yield curve - which just happened fully last week - usually presages recession, so investors may be taking money off the table, booking profits.

Whatever is causing the Dow's demise, it's rattling key segments. The Dow is down 1,300 points since December 4.

The Fed's final FOMC meeting of the year begins today and concludes Wednesday with the rate policy decision at 2:00 pm ET. A 25 basis point cut to the federal funds target rate is a near certainty.

At the Close, Monday, December 16, 2024:
Dow: 43,717.48, -110.58 (-0.25%)
NASDAQ: 20,173.89, +247.17 (+1.24%)
S&P 500: 6,074.08, +22.99 (+0.38%)
NYSE Composite: 19,627.68, -101.69 (-0.52%)

WEEKEND WRAP: Dow Down Seven Straight; Yield Curve Dis-Inverts; Gold, Silver Slaughtered; Oil Gains Probably Short-Lived

Drones sighted in New Jersey and an earthquake in the bond market highlighted a week that will largely go unnoticed by most analysts, but may turn out to be one of the more consequential indicators in recent memory.

While drone sightings serve mostly to confuse and disorient the general public, the upheaval in the treasury market - with the long and short ends completely flipping positions - is an actual economic big deal which mainstream financial journalists completely missed, likely because they have little to no clue about how the debt market functions.

Kudos to Paul Franke at Seeking Alpha making note of the change and for forward thinking, ferreting out some constructive investing ideas based on the "dis-inversion."

With November CPI and PPI in the rear-view mirror, the upcoming week will feature the Fed's final monetary policy rate decision of the year on Wednesday, followed by the Bank of Japan and the Bank of England on Thursday.

Somewhere in this jumbled miasma, there's a happy holiday package wrapped up with a frilly bow on top. Starting Monday, there are nine days until Christmas and just 11 trading sessions remaining in 2024. Following the Fed policy decision, most minds will be turning to college bowl games, last-minute shopping, and travel plans.

Oh, and drone swarms. Don't forget drone swarms.

Stocks

It was not a good week to be holding equities, especially blue chips. The Dow fell every day this week, with the losing streak hitting seven and nine of the last ten sessions.

The only index to show gain was the NASDAQ, the usual suspect in the over-heated stock environment, powered by AI. Artificial intelligence is making impacts in certain places beyond sex animations, better language usage, and deep fakes. There are ground-breaking developments in search quality, predictive analysis, and general business planning. What AI can do, used properly, results in positive outcomes for the most part. The problem is, like during the dotcom boom, it's vastly over-hyped and thus, certain high-flying stocks are being overvalued.

There is likely to be a correction, at least, in tech stocks, possibly a drop of more than the usual 10-15%, in months ahead. Other sectors are likely to be affected more severely, particularly consumer discretionary and general retail, should a recession appear in early 2025, which appears to be more and more likely.

Treasury Yield Curve Rates

Date	1 Mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
11/08/2024	4.70	4.69	4.63	4.53	4.42	4.32
11/15/2024	4.70	4.67	4.60	4.52	4.44	4.34
11/22/2024	4.72	4.67	4.63	4.53	4.46	4.42
11/29/2024	4.76	4.69	4.58	4.52	4.42	4.30
12/06/2024	4.57	4.50	4.42	4.42	4.34	4.19
12/13/2024	4.43	4.43	4.34	4.36	4.32	4.24

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
11/08/2024	4.26	4.18	4.20	4.25	4.30	4.58	4.47
11/15/2024	4.31	4.27	4.30	4.36	4.43	4.70	4.60
11/22/2024	4.37	4.32	4.30	4.35	4.41	4.67	4.60
11/29/2024	4.13	4.10	4.05	4.10	4.18	4.45	4.36
12/06/2024	4.10	4.05	4.03	4.09	4.15	4.42	4.34
12/13/2024	4.25	4.21	4.25	4.33	4.40	4.69	4.61

Yields rising during the week on maturities from two years out to 30 indicate a massive dumping of U.S. treasuries, owing to inflationary indication in November CPI and PPI and the Fed's steadfast commitment to cut the federal funds target rate at next week's FOMC meeting (Tuesday-Wednesday).

Fed policy has become fully disjointed from perceived reality. Never has the Fed cut rates with stocks near all-time highs, unemployment low, the general economy supposedly in good shape with GDP growing. It's almost as if they know something about which the rest of us are being purposely kept in the dark, which, like it or not, is probably the case.

This week's movements in bonds unclenched the long-term inversion, with full spectrum yields (30-days out to 30-years) flipping from -23 to +18, an event that should not go unnoticed by anybody considering investments in stocks or fixed income. The rapid change to a nearly-normalized yield curve has produced a flattening of immense consequence.

The entire curve is ensconced in a 0.40% range, from the low of 4.21% on the three-year note to the high of 4.61% on the 30-year bond and it is all concentrated at the long end with antecedent preference given to 30- and 60-day yields in anticipation of a drop next week from 4.50-4.75% to 4.25-4.50%. It's about as flat as it can be. 30-day bills will likely continue to drop when the Fed actually announces the cut, which is a near-certainty, as is another 25 basis point drop in January.

(As an aside, 20-year bonds should be simply ignored as they are largely illiquid, not favored by the bond-trading community and thus irrelevant in terms of yield structure.)

By Friday, 30-day bills could be yielding as low as 4.30%. By February, 30-day bills could yield 4.15% or lower, completing the Fed's task of normalization of the yield curve. Short-term issuance dropping along with long-dated maturities rising will result in a healthy upward-sloping yield curve, usually considered "normal", though little about the methodology nor the timing offer even a small degree of confidence. The Fed seems to be forcing the issue, driving down the short end to accommodate the incoming Trump administration's austerity protocol, which is likely to be predicated on cuts to government agency budgets and slashing of employment numbers which will lead inexorably to higher unemployment across government sectors, wedging into private payrolls as well.

The overall effects of Trump's process are going to be massively deflationary. The Fed is going to have to keep "pumping the brakes" with rate cuts and may have to slam them down to avoid what should, in all likelihood, become a deep, long recession, one that is long overdue owing to phony government statistics and readings that clouded over the true condition of the U.S. economy, thrashed and plundered by four years of Biden bone-headedness, pilferage, and dishonesty. What the current administration - with ample assistance from congress - has done to the economics of the United States is nothing short of criminal and there will, no doubt, be repercussions, recriminations, and penalties.

35 days until the Biden years get swept unceremoniously into the dustbin of history and counting. God help us.

Spreads:

2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48
12/15/2023: -53
12/22/2023: -41
12/29/2023: -35
1/5/2024: -35
1/12/2024: -18
1/19/2024: -24
1/26/2024: -19
2/2/2024: -33
2/9: -31
2/16: -34
2/23: -41
3/1: -35
3/8: -39
3/15: -41
3/22: -37
3/28: -39
4/5: -34
4/12: -38
4/19: -35
4/26: -29
5/3: -31
5/10: -37
5/17: -39
5/24: -47
5/31: -38
6/7: -44
6/14: -47
6/21: -45
6/28: -35
7/5: -32
7/12: -27
7/19: -24
7/26: -16
8/2: -08
8/9: -11
8/16: -17
8/23: -09
8/30: 00
9/6: +06
9/13: +09
9/20: +18
9/27: +20
10/4: +5
10/11: +13
10/18: +13
10/25: +14
11/1: +16
11/8: +5
11/15: +12
11/22: +4
11/29: +5
12/6: +5
12/13: +15

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123
12/15/2023: -154
12/22/2023: -149
12/29/2023: -157
1/5/2024: -133
1/12/2024: -135
1/19/2024: -118
1/26/2024: -116
2/2/2024: -127
2/9: -117
2/16: -103
2/23: -112
3/1: -121
3/8: -125
3/15: -109
3/22: -112
3/28: -115
4/5: -93
4/12: -87
4/19: -77
4/26: -70
5/3: -85
5/10: -87
5/17: -94
5/24: -99
5/31: -83
6/7: -92
6/14: -113
6/21: -103
6/28: -96
7/5: -101
7/12: -108
7/19: -103
7/26: -104
8/2: -143
8/9: -131
8/16: -138
8/23: -141
8/30: -121
9/6: -125
9/13: -117
9/20: -80
9/27: -80
10/4: -75
10/11: -58
10/18: -54
10/25: -38
11/1: -18
11/8: -23
11/15: -10
11/22: -12
11/29: -40
12/6: -23
12/13: +18

Oil/Gas
The demise of Assad and Syria gave oil a needed boost, to $70.65 as of Friday's New York close, though it was likely for many wrong reasons.

WTI crude oil leapt from the prior Friday close of $67.17, a massive move of $3.48, though it might be more of a one-off than the beginning of any kind of trend.

Oil prices have been under pressure for the past eight months, falling from a peak of $86.91 on April 5 to current levels. Peak to trough, the drop is a bear market signal. This week's run-up is just noise and an opportunity for hedgers to make money on both sides of the trade. There is nothing existent in the financial realm to suggest in the least that oil prices should rise unless the final days of Biden bunker mentality lands the world into thermo-nuclear winter just as climatological winter appear (December 20).

Consequently, gas prices stabilized at three-year low levels during the week with Gasbuddy.com reporting the national average for a gallon of unleaded regular gas at the pump of $3.01 a gallon, just two cents higher than the prior week. With Trump taking over the White House in a little more than a month, it's worth noting that the national average for gas never rose above $3.00 from 2016 through 2020.

California continues as price leader, at $4.28 a gallon, down four cents from the prior week and well below prices prevailing during the summer.

Pennsylvania prices are down another four cents this week, at $3.23, with the Keystone State holding the high price in the Northeast. New York was unmoved, down a penny, at $3.11. Connecticut ($3.02) and Massachusetts ($3.01) were slightly lower, continuing to nip at sub-$3 levels, while Maryland remained below $3.00, at $2.94 per gallon.

There were some upsetting price movements in the Midwest, led by Illinois rising from $3.13 to $3.20 and Ohio and Indiana both popping back over $3.00, both showing $3.04 on Sunday morning.

Fuel prices in Oklahoma ($2.44) continue to be by far the lowest in the nation, holding at current levels for a second straight week. Following are Texas ($2.50), Mississippi and Arkansas ($2.55), and Tennessee at $2.60. Louisiana and Kansas, at $2.63 and $2.64, respectively are just slightly lower than Southeastern neighbors South Carolina, Georgia, and Alabama. Florida ($3.11) remains the outlier, with all other Southeastern states well below $3.00, along with Virginia ($2.89) and North Carolina ($2.85).

Sub-$3.00 gas can now be found in at least 32 U.S. states. The Northeast and West coast are the over-$3.00 holdouts.

Arizona ($3.12) was down another four cents on the week, continuing a long trend. Oregon checked in at $3.44, Nevada at $3.57, and Washington at $3.91, leaving only California above $4.00. Utah ($2.92) and Idaho ($2.95) have both come down steadily and significantly over the last eight months.

Bitcoin

This week: $103,002.00
Last week: $99,645.69
2 weeks ago: $97,184.05
6 months ago: $66,111.79
One year ago: $42,651.91
Five years ago: $7,335.59

Bitcoin remains atop the asset leaderboard, up 133% year-to-date and more than 50% since the November 5 U.S. elections, retracing $103,000.00 this morning.

Fool's gold?

Precious Metals

Gold:Silver Ratio: 86.00; last week: 84.31

Per COMEX continuous contracts:

Gold price 11/15: $2,567.40
Gold price 11/22: $2,743.20
Gold price 11/29: $2,673.90
Gold price 12/6: $2,654.90
Gold price 12/13: $2,665.90

Silver price 11/15: $30.33
Silver price 11/22: $31.85
Silver price 11/29: $31.10
Silver price 12/6: $31.49
Silver price 12/13: $31.00

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):

Item/Price	Low	High	Average	Median
1 oz silver coin:	35.15	50.05	40.15	39.52
1 oz silver bar:	35.50	43.95	40.13	40.26
1 oz gold coin:	2,773.63	2,875.00	2,829.69	2,832.26
1 oz gold bar:	2,749.24	2,868.41	2,776.37	2,769.15

The Single Ounce Silver Market Price Benchmark (SOSMPB) priced higher this week, to $40.02, a gain of $1.31 above the December 8 price of $38.71 per troy ounce.

Prices for gold and silver remained steady, even as system riggers managed a complete turnaround, with both metals reaching six-week highs (gold: $2,758.70; silver: $33.28) late Wednesday into early Thursday on the COMEX continuous contract.

Individual purchasers haven't been paying homage to futures prices on the COMEX nor daily fixes at the LBMA. Prices at retail are trending well above both. For instance, Kitco reports spot gold Sunday morning at $2,647.50, while the lowest price for a 1-ounce gold piece on eBay is $2,749.24, a $100 premium to quoted spot.

The same holds true for silver, quoting spot at $30.52 on Kitco, while the median price for a finished silver 1-ounce coin on eBay is $39.52, and $40.26 for a 1-ounce bar with low prices for the same at $35.15 and $35.50.

While eBay maintains a robust market for bullion of all varieties, prices can sometimes exceed expectations, owing to the onerous fees charged by the auction and quick-buy monopolist. However, even at online retailers, a single 1-ounce common round can run anywhere from $32.26 t0 $35.81, depending on payment type (check, crypto, credit card, PayPal) plus shipping and tax (depending on jurisdiction), whereas on eBay, via Money Daily's weekly survey, free shipping is required, putting dealer and eBay prices more or less in agreement.

Naturally, buying single silver coins or bars is the most inefficient way to build a stack. Most serious buyers opt for 10-ounce lots or 10-ounce bars. Any way one looks at the trend, it's obvious that silver and gold are being purchased at an incredibly strong run-rate at retail.

Price-rigging at the COMEX and pric fixes by LBMA for both gold and silver are largely being ignored by individual purchasers who just want the metal at what they consider a reasonable price, even if premia are running 10-15-20% above spot.

Using silver as the base, a 10% premium over spot is $3.05, 20% is $6.10, translating into $33.54 and $36.62, respectively. Nothing unusual about that at all. Dealers, whether online, brick and mortar, or eBay-based, need to make money. Buying at spot -10% and selling at spot +10% has been normative behavior for decades and still, to some extent, is.

Nothing says "collapsing currency" better than advancing prices on gold and silver and a robust and growing market for precious metals. Trading crisp or crinkled U.S. greenbacks for actual physical metal one can hold in one's hand is about the most obvious trade one can imagine and everyday people are awakening to the crumbling condition of currency and markets.

COMEX and the LBMA will likely survive the onslaught of a gold and silver mania, but their relevance will continue to decline. Already, the Shanghai exchange challenging their legitimacy, and soon Moscow, Dubai, and possibly Mumbai will follow with exchanges of their own, making the LBMA price fixes and COMEX futures a fool’s errand as the world moves on from their outdated systems.

Anybody with even a limited interest in gold or silver should consider today's prices more or less a baseline, because, as recent history proves, prices for precious metals are going nowhere but up, reflecting the decreasing purchasing power of currencies issued by central bankers like the dollar, euro, pound, and even the Chinese yuan.

It's likely that China will be a first-mover in backing currency with gold, possibly Russia, since those two countries produce and hold the largest reserves in the world. The U.S. position is a grey area, as there hasn't been an audit of U.S. gold holdings in more than 70 years, the last one, in 1953, barely meeting any standard of credibility.

Those who are waiting on the sidelines for a pullback or believing that prices are already too high best not tarry further. Prices will continue higher, with or without the COMEX, LBMA, and other notorious manipulators.

Price, being relative to currency, is not as important as quality and quantity. Buy well and buy often.

WEEKEND WRAP

Changes are happening at a fairly rapid beat. It's a shame the mainstream press can't recognize the importance of events beyond the latest Taylor Swift concert or Disney production.

The numbers this week are 35 (days until inauguration), 11 (trading days left in 2024), and 9 (days until Christmas).

Don't drone me, bro!

At the Close, Friday, December 13, 2024:
Dow: 43,828.06, -86.06 (-0.20%)
NASDAQ: 19,926.72, +23.88 (+0.12%)
S&P 500: 6,051.09, -0.16 (-0.00%)
NYSE Composite: 19,729.37, -39.72 (-0.20%)

For the Week:
Dow: -814.46 (-1.82%)
NASDAQ: +66.96 (+0.34%)
S&P 500: -39.18 (-0.64%)
NYSE Composite: -378.42 (-1.88%)
Dow Transports: -167.97 (-1.00%)

Stocks Stalling Out Mid-December; Dow Industrials Lower Six Straight Sessions; Gold, Silver Being Taken to Slaughterhouse

Entering the final day of trading for the week, the major averages have been trending lower.

The Dow Jones Industrial Average is down 728 points for the week. It has closed lower every day this week and for six straight sessions and eight of the last nine.

NASDAQ is up a mere 43 points on the week, through Thursday's close while the S&P 500 is down 39 points.

Bitcoin continues to tease at the $100,000 level, having crossed that threshold for the first time on December 5, reaching a high of $103,242.

Gold and silver made large gains on Monday and Wednesday, but have been dropping like rocks since early Thursday morning. Gold peaked at $2,758 on Wednesday, but, nearing 9:00 am ET Friday morning, is trading at $2,683 on the COMEX. Silver reached $33.28 early Thursday morning, but has dropped to a low of $31.07, and continues to fall.

Anybody making sense of this should be considered a genius, an insider, or both.

Even though stocks are down generally, the decline is nothing more than a blip on the overall trajectory of the rally which began more than a year ago. Stocks have magically performed this year. The NASDAQ is up nearly 35%, the S&P has put on gains of 27%, with the Dow lagging, up a mere 16%.

Thursday's trading was the worst of the week for all the majors, but stock futures are offering a glimmer of hope for an opening to the upside. What's worrisome is the high levels that stocks have attained, despite the pullback this week, and an uncertain future, with President-Elect Trump due to be inaugurated in fewer than 40 days.

Military conflicts in the Middle East - now focused on the collapse of Syria - and Ukraine add to investor hesitancy as does the year-ending condition. Adding to or initiating positions in this envirornment almost certainly will have unforeseen consequences, manifesting themselves in the first and second quarters of 2025.

Barring a narrative that investors can easily latch on to, many are taking a wait-and-see attitude, likely the most prudent position at this uncertain juncture. Stocks may very well rally further into the year's end, but a pullback early in 2025 is an even more likely condition.

Should stocks open higher on Friday and fade throughout the session that could signal trouble ahead and spark further declines. There's also the possibility of some of the week's losses being dissolved on Friday, which would amount to more noise than signal.

Putting a wrapper on this market is an uneasy proposition. There's too much uncertainty for stocks to make general advances.

At the Close, Thursday, December 12, 2024:
Dow: 43,914.12, -234.44 (-0.53%)
NASDAQ: 19,902.84, -132.05 (-0.66%)
S&P 500: 6,051.25, -32.94 (-0.54%)
NYSE Composite: 19,769.09, -121.94 (-0.61%)

November PPI comes in Hotter than Expected; Futures Fall, Gold, Silver Ripped Lower after Big Gains Wednesday

Uh-oh.

At 8:30 am ET, the BLS issued the following:

The Producer Price Index for final demand rose 0.4 percent in November. Prices for final demand goods increased 0.7 percent, and the index for final demand services moved up 0.2 percent. Prices for final demand advanced 3.0 percent for the 12 months ended in November.

This was not expected by most of the brainiacs on Wall Street, but those in goods-producing businesses have been seeing input prices rising throughout the year. The 0.7 percent increase puts yesterday's CPI figure into question. Surely producers are passing along their increased costs to consumers.

That's why CPI and PPI, two measures that are never revised and are merely estimates of a very large population (all of America) should be regarded as highly unreliable.

Nevertheless, Wall Street's response was typical. Stock futures sold off just as rapidly as they rose on Wednesday's benign CPI release. The BLS press release offers more granularity, but, suffice it to be said that Wall Street is set up for a massive waterfall event, largely because it throws shade on the Fed's proposed 0.25% cut in the federal funds rate next week, but also because, in the most basic sense, inflation is bad.

Missing Wall Street's estimates (put another way, the experts on Wall Street were way off) isn't catastrophic, but it will likely leave some deep dents.

Just after 9:00 am ET Dow futures were down 32 points, S&P futures were off 16, and NASDAQ futures slid 116.

In an odd, but somewhat expected twist of logic, gold and silver are both down sharply. However, Wednesday saw some of the best gains in the past month. Gold is currently down more than $30, to $2,725.50. Silver is off 35 cents, at $32.62 after reaching a high overnight of $33.31.

If there's inflation at the producer level, it's a safe bet that consumer prices will soon be rising. In such an environment, precious metals usually do exceedingly well.

With 39 days left until Trump's inauguration, it's a crap-shoot in the near term.

At the Close, Wednesday, December 11, 2024:
Dow: 44,148.56, -99.27 (-0.22%)
NASDAQ: 20,034.89, +347.65 (+1.77%)
S&P 500: 6,084.19, +49.28 (+0.82%)
NYSE Composite: 19,891.03, +9.13 (+0.05%)

CPI In-Line, Who Cares?; Federal Government, Merrick Garland Slapped with Nationwide Injunction on CTA Constitutionality by Texas Judge

Wednesday morning, December 11, 2024: Does anybody actually care what the BLS reports as November CPI?

Other than bone-heads on Wall Street, probably not. People care about the price of ground beef, whether the Lions will beat the Bills this Sunday, how much money it coast to fill up their gas tank (a number that's been going steadily down, thankfully), and maybe what their kids are learning in the state-run indoctrination centers otherwise known as public schools.

In any case, October CPI was relatively tame, and nobody batted an eyelash, buying stocks until their eyes bled.

In October, the Consumer Price Index for All Urban Consumers rose 0.2 percent, seasonally adjusted, and rose 2.6 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.3 percent in October (SA); up 3.3 percent over the year (NSA).

So, November CPI was expected to fall in line and maybe drop a bit. The reality:

In November, the Consumer Price Index for All Urban Consumers rose 0.3 percent, seasonally adjusted, and rose 2.7 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.3 percent in November (SA); up 3.3 percent over the year (NSA).

The big takeaway from the 8:30 am ET release was that food at home (bought in grocery stores) was up 0.5% and the shelter component (rent, mortgage, etc.) was up 0.3%. Yep, Americans are still getting squeezed. It cost more to maintain a home and to eat. Lovely.

So, the monthly rate and annual rate was up 0.1% and we're supposed to care? Wash, rinse, repeat. Nobody is going to base buying or selling stocks, budgeting for Christmas or turning the thermostat up or down based on this number, but, it gives the simpletons on CNBC, Bloomberg, and FoxBusiness something to talk about and maybe the Fed will notice, but they probably won't change their minds about cutting the federal funds target rate another 0.25% a week from today.

There are more important items that the mainstream media doesn't even mention. One of them is the fate of the Corporate Transparency Act (CTA) and its implementing regulations. In case you haven't heard of this law, passed as part of the NDAA in 2021, it requires small businesses with fewer than 20 employees and a beneficial owner's interest (BOI) of more than 25% of the company to register with FinCEN (the Treasury Department's Financial Crimes Enforcement Network).

It's estimated that 32 million businesses fall into this denial of privacy trap set by congress. Most businesses were supposed to have registered between January 1 and December 31 of this year. Many small businesses don't even know the law exists, though quite a few were convinced by their lawyers and/or accountants that registration was a necessity because not doing so might open them up to fines of $500 a day and possibly up to two years in prison.

Well, not withstanding that the law was unnecessary and a burden on people running small businesses across the great expanse of America - like barber shops, restaurants, retail stores, online merchants, etc. - a lot of people sheepishly caved to yet another over-the-top demand from los federales and fell into compliance, giving up their right of privacy to the overbearing, out-of-control government.

That was all well and good until Judge Amos L. Mazzant III in the Eastern District of Texas U.S. Circuit Court granted a preliminary injunction, halting the process in its tracks, on grounds that the plaintiffs in the case of TEXAS TOP COP SHOP, INC., ET AL., v. MERRICK GARLAND, ATTORNEY GENERAL OF THE UNITED STATES, ET AL., had satisfied the court with their arguments enough to enjoin the Government from enforcing the Corporate Transparency Act and its Implementing Regulations.

Essentially, what the judge granted stops the CTA in its tracks. Businesses are no longer compelled to register with FinCEN. The government even went so far as to issue a statement on its website, to wit:

In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.

How nice of them, allowing companies to voluntarily submit to deprivation of privacy. The government is appealing the ruling and there’s other litigation ongoing, but, considering the degree of competence (none) in Merrick Garland's DoJ, the chances that the government will prevail appear slight.

Attorneys Kyle Fonjemie and Anthony J. Zeoli on Hinshaw Law authored a concise summary of the ruling and its implications.

Effectively, should the law be eventually ruled unconstitutional (which it almost surely is), the millions of business owners who submitted their information to the department of government overreach should have those records expunged.

There are even bills pending in both the House and Senate which seek to repeal the CTA. Backed by the NFIB, which was a party to the Texas lawsuit, H.R.8147 - Repealing Big Brother Overreach Act would accomplish that task and send a message to congress that the American public and individual states are not their playthings.

The House bill has 92 co-sponsors. Senate bill S.4297 is identical to the House bill.

There's more to this unfolding saga which will be addressed in this blog in Sunday's WEEKEND WRAP.

Getting back to the CPI and the loonies that slavishly follow this stuff, stock futures went up like 4th of July fireworks on the announcement because they were "in line" with forecasts. Yeah, only Wall Street cares about this stuff. Meanwhile, eggs, steaks, milk, and rent continue to become out of reach for the average household.

Buy more stocks. The Fed's got this.

At the Close, Tuesday, December 10, 2024:
Dow: 44,247.83, -154.10 (-0.35%)
NASDAQ: 19,687.24, -49.45 (-0.25%)
S&P 500: 6,034.91, -17.94 (-0.30%)
NYSE Composite: 19,881.90, -124.36 (-0.62%)

Stocks Sent Sideways; In Laughable Move to Suppress Gold's Price, CME to Begin Offering 1-ounce Gold Futures Contacts In January

There was nothing unusual about Monday's declines on the major indices, except maybe that the Dow lost ground for the fifth time in the last six sessions and that Wednesday of last week - the only day the Dow finished on the upside - produced an all-time high.

That sequence may indicate to some that Wednesday's record was an outlier, to others, signs of a near-term top, and to some, nothing in particular. It's safe to say that with stocks in a supreme bubble, nobody really has a handle on where it's all headed, especially those who think they know, the experts at Goldman Sachs or Merrill Lynch, or even your favorite stock picker.

Expectations for a rosy future in stocks can almost always be found somewhere on Wall Street. The latest prognostications for the year 2025 are hovering around S&P at 7000, implying a gain of around 15% for the coming year, a number that would be a disappointment when compared to this year's gain of 27% on the S&P.

It may be a little too early to say so, but stocks are likely to bounce around quite a bit before heading to the peaks in 2025. There's ample room for a sizable pullback, likely in the first and second quarter, setting up a scenario for a late run to year-end targets. Timing may be everything in the coming six to 18 months of investing.

Longer term, who knows? Stocks can go much higher if bubble economics prevails, but odds are that the Fed will continue to cut interest rates to a point at which inflation just can't be held back any longer. On that point - rate cuts - the Fed's current pathology seems to fly in the face of the market predictors' paradise scenario, the one in which stocks fly to the moon and everybody retires rich.

We'd all love that to be the case, but the realists probably know better.

Gold's move on Monday and again this morning is telling a different tale, approaching $2,700 with gusto and even getting to it just moments ago on the COMEX. Oddly enough, with gold apparently on more people's minds than just central bankers, the CME has announced the launch of a 1-ounce gold futures contract on January 13, 2025, pending regulatory approval, i.e., SEC's valued rubber stamp.

Jesse Columbo of MoneyMetals.com analyzed some of the issues such a contract offering would entail, the most pronounced being that the contract calls for cash settlement. Nobody exercising such a contract would be able to redeem it for physical metal. As such, it's just another diversion away from the ultimate hedge against everything in the Federal Reserve wonderland of fiat currencies, physical possession of gold bullion.

Thus, offering a gold futures contract on 1-ounce of gold that is not redeemable in gold is just more speculative misdirection from the likes of CME, COMEX, LBMA, and their friends at the Federal Reserve, none of whom want to see people buying and - perish forbid - hoarding gold when their chief function in the world of finance is to keep the mighty U.S. dollar as the pre-eminent store of value.

It's actually laughable. Only retards with limited cash on hand, or other retards with lots of money seeking to distort the true value of an ounce of gold (brokers, dealers, other proxies for the Fed) would bother with these contracts for "paper gold."

Anybody who wants to own an ounce of gold can just go to one of the many online dealers, or eBay, or their local coin shop and buy a coin, a round, a bar of gold. It's that simple.

The only conclusion as to why the CME would expand its offerings of gold futures in smaller denominations would be to lure in speculators and riggers who don't actually want to own gold at lower margins. When gold goes to $3,000, or $5,000 or $10,000, will the CME then begin offering 1/4-oz contracts, 1/10th-oz contracts?

Bet on it.

If you're the type of person who doesn't see the value of holding assets with no counter-party risk - gold, silver, other tangible assets - then continue dabbling in stocks, options, derivatives, and other time-and-money wasters.

But, if you don't trust the people on Wall Street, the Fed, the government, and maybe your neighbors who have three cars, a 401k, and dine out three times a week, then maybe physical possession of gold and silver is for you.

Anybody with less than three eyes can see, in a world built on debt, fiat currencies and fractional reserve banking, where gold and silver prices are headed.

Ultimately, it's wealth protection. In other words, "good as gold."

At the Close, Monday, December 9, 2024:
Dow: 44,401.93, -240.59 (-0.54%)
NASDAQ: 19,736.69, -123.08 (-0.62%)
S&P 500: 6,052.85, -37.42 (-0.61%)
NYSE Composite: 20,006.26, -101.53 (-0.50%)

WEEKEND WRAP: Bitcoin Tops $100,000; Dow, S&P, NASDAQ New All-Time Highs; Gold, SIlver Continue Decline; Gas at Multi-Year Low

This story is getting a bit old, but bears repeating: Stocks continue their ascent to who-knows-where, as the Shiller PE settled Friday at the second highest level ever, 38.88, slightly above 38.58, the pandemic level of October, 2021.

Considering that the highest reading ever, 44.19, was at the height of the dotcom boom in November 1999, implies that this bubble has further upside because it almost certainly is the biggest balloon ever.

Stocks do not always go up. It's a known fact, just like real estate in the early 2000s, when the most profitable activity was to own residential real estate and do nothing else. That episode ended in the sub-prime collapse which took real estate values down 40-60% and more in some cases, triggering millions of foreclosures nationwide and widespread financial reordering.

Will this crash play out gradually, then all at once, like in Hemingway's "The Sun Also Rises"? That seems to be the preferred pathway. The months and years ahead are sure to be entertaining and challenging.

Stocks

While the NASDAQ gained 3.34% for the week, the Dow Transportation Average sank 4.20%, just a week after making a new all-time high.

The Dow made an all-time closing high on Wednesday, but traded lower the other four days of the week.

All of the major indices are riding well above their 50-and-200-day moving averages. The NASDAQ is particularly stretched, more than five percent above its 50-day moving average and all of them have remained above their 50-week moving averages since November of 2023.

Currently, there's more than ample bullishness amid uncertainty, though the market appears to believe the incoming Trump administration will usher in an era of greater prosperity, or, at least, accommodating conditions for stocks.

Friday's report of 227,000 jobs gained in the November non-farm payroll data was just about what the market expected and reinforces the contention that the Fed's path of rate cuts will continue without interruption.

S&P 500 sectors for the week were mixed, led to the upside by Telecom (+4.1%), Information Technology (+3.4%), and Consumer Discretionary (+5.9%), while being held back by Healthcare (-2.1%), Utilities (-3.8%), Industrials (-2.3%), Materials (-3%) Energy (-4.6%) and Real Estate (-2.6%).

The week ahead will supply November CPI on Wednesday and PPI, Thursday. Like the latest employment figures, the accounts are expected to be benign, which reinforces a full speed ahead narrative for stocks.

A few notable earning reports in the week ahead include Oracle (ORCL), Toll Brothers (TOL), Yext (YEXT), and Vail Resorts (MTN) on Monday; AutoZone ((AZO), Ollie’s (OLLI), and Academy Sports (ASO) Tuesday morning, Game Stop (GME) and Sportsman’s Warehouse ((SPWH) Tuesday after the bell.

On Wednesday, Macy’s (M), Vera Bradley (VRA), and Adobe (ADBE) report, with Ciena (CIEN), Costco (COST), and Broadcom (AVGO) on Thursday.

Treasury Yield Curve Rates

Date	1 Mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
11/01/2024	4.75	4.74	4.61	4.53	4.42	4.28
11/08/2024	4.70	4.69	4.63	4.53	4.42	4.32
11/15/2024	4.70	4.67	4.60	4.52	4.44	4.34
11/22/2024	4.72	4.67	4.63	4.53	4.46	4.42
11/29/2024	4.76	4.69	4.58	4.52	4.42	4.30
12/06/2024	4.57	4.50	4.42	4.42	4.34	4.19

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
11/01/2024	4.21	4.18	4.22	4.30	4.37	4.68	4.57
11/08/2024	4.26	4.18	4.20	4.25	4.30	4.58	4.47
11/15/2024	4.31	4.27	4.30	4.36	4.43	4.70	4.60
11/22/2024	4.37	4.32	4.30	4.35	4.41	4.67	4.60
11/29/2024	4.13	4.10	4.05	4.10	4.18	4.45	4.36
12/06/2024	4.10	4.05	4.03	4.09	4.15	4.42	4.34

All yields were lower on the week, but especially short term rates, i,e, bills of 30-day, 60-day, 90-day, 120-day and six-month duration. 30-day and 60-day yields were down 19 basis points. By contrast, the 2-year and 10-year yields only fell by three basis points each.

Nothing shows more conviction that the Federal Reserve will lower the federal funds target rate by 0.25% at the next FOMC meeting (Dec. 17-18) than the enormous drop at the short end of the curve. It's a near-certainty at this point that the Fed is committed to cutting rates on a regular basis. They know the economy is sputtering and are trying to provide relief. The Fed is also quite well aware that the current debt burden and interest payments by Treasury in excess of $1 trillion annually is unsustainable and must be curtailed now that they've nearly bankrupted the federal government (with ample assistance from the free-spending congress, as always).

The big drop on the short end of the curve resulted in further flattening. 2s10s held steady at +5 basis points, but full spectrum fell closer to dis-inversion, at -23.

Timing is ominous. The Fed's plan to flatten the curve completely coincides with Inauguration Day, January 20, and just prior to the January 28-29 FOMC meeting. Two cuts of 0.25% would bring the federal funds target rate down to 4.00-4.25%, implying 30-day bills right around 4.12-4.20%. With the 30-year hovering in the same area, nobody in fixed income, including banks that lend to business, would make any money as there would be no spread upon which to "borrow short, lend long."

Those looking for a liquidity crisis might find one early next year.

Spreads:

2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48
12/15/2023: -53
12/22/2023: -41
12/29/2023: -35
1/5/2024: -35
1/12/2024: -18
1/19/2024: -24
1/26/2024: -19
2/2/2024: -33
2/9: -31
2/16: -34
2/23: -41
3/1: -35
3/8: -39
3/15: -41
3/22: -37
3/28: -39
4/5: -34
4/12: -38
4/19: -35
4/26: -29
5/3: -31
5/10: -37
5/17: -39
5/24: -47
5/31: -38
6/7: -44
6/14: -47
6/21: -45
6/28: -35
7/5: -32
7/12: -27
7/19: -24
7/26: -16
8/2: -08
8/9: -11
8/16: -17
8/23: -09
8/30: 00
9/6: +06
9/13: +09
9/20: +18
9/27: +20
10/4: +5
10/11: +13
10/18: +13
10/25: +14
11/1: +16
11/8: +5
11/15: +12
11/22: +4
11/29: +5
12/6: +5

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123
12/15/2023: -154
12/22/2023: -149
12/29/2023: -157
1/5/2024: -133
1/12/2024: -135
1/19/2024: -118
1/26/2024: -116
2/2/2024: -127
2/9: -117
2/16: -103
2/23: -112
3/1: -121
3/8: -125
3/15: -109
3/22: -112
3/28: -115
4/5: -93
4/12: -87
4/19: -77
4/26: -70
5/3: -85
5/10: -87
5/17: -94
5/24: -99
5/31: -83
6/7: -92
6/14: -113
6/21: -103
6/28: -96
7/5: -101
7/12: -108
7/19: -103
7/26: -104
8/2: -143
8/9: -131
8/16: -138
8/23: -141
8/30: -121
9/6: -125
9/13: -117
9/20: -80
9/27: -80
10/4: -75
10/11: -58
10/18: -54
10/25: -38
11/1: -18
11/8: -23
11/15: -10
11/22: -12
11/29: -40
12/6: -23

Oil/Gas

WTI crude oil fell near recent lows again this week, closing at $67.17 on Friday, down nearly a buck from $68.15 quoted last Friday. Oil's price continues to reflect the Middle East standoff and the lack of progress in the Ukraine-Russia conflict. Trump soon to enter the picture is also keeping a lid on oil, as is the concern over recession, already a reality in Europe. China's slowdown and a global glut adds to the woes of the producers who apparently cannot cut back enough, lest they destroy their own economies.

Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump of $2.99 a gallon, down four cents from the prior week and the first sub-$3.00 reading since May 2021. For reference purposes concerning the direction of gas prices under the incoming Trump administration, the national average never rose above $3.00 from 2016 through 2020. Nothing beats price inflation better than lower prices for oil and gas. Surely, less pain at the pump will translate to happier consumers overall.

California continues to be the price leader, at $4.32 a gallon, down five cents from the prior week and well below prices seen during the summer.

Pennsylvania prices are down, but saw a rise of five cents this week, at $3.27, with the Keystone State holding the high price in the Northeast. New York was static, at $3.12. Connecticut ($3.04) and Massachusetts ($3.01) were slightly lower, while Maryland became the latest state to dip below $3.00, at $2.97 per gallon. Prices in the Midwest continue to wane. Even Illinois was down seven cents ($3.13).

Fuel prices in Oklahoma ($2.44) continue to be by far the lowest in the nation, though five cents higher on the week. Following are Texas ($2.56), Mississippi ($2.57), and Arkansas ($2.59). Louisiana, Kansas, and Tennessee all check in at $2.65. Florida ($3.06) remains the outlier, with all other Southeastern states well below $3.00, including Georgia ($2.89) and North Carolina ($2.84).

Sub-$3.00 gas can now be found in at least 35 U.S. states. The Northeast and West coast are the over-$3.00 holdouts

Arizona ($3.16) was down three cents on the week, with Oregon at $3.48, Nevada at $3.61, and Washington at $3.95, leaving only California above $4.00. Utah ($2.92) and Idaho ($2.99) have both come down steadily over the last eight months.

Bitcoin

This week: $99,645.69
Last week: $97,184.05
2 weeks ago: $97,283.64
6 months ago: $69,277.68
One year ago: $43,790.26
Five years ago: $8,020.98

Bitcoin remains atop the asset leaderboard, up 125% year-to-date and more than 40% since the November 5 U.S. elections, topping out at $103,511.60 this week.

With bitcoin hitting the century mark, pundits and skeptics are split over where its headed, with supporters loudly calling for $200,000 as the next logical stop. Those who consider bitcoin to be the ultimate folly, like Peter Schiff, continue to preach that it is not money, has no store of value nor means of exchange properties, but merely fantastic, fanatical speculation.

Precious Metals

Gold:Silver Ratio: 84.31; last week: 85.97

Per COMEX continuous contracts:

Gold price 11/8: $2,691.70
Gold price 11/15: $2,567.40
Gold price 11/22: $2,743.20
Gold price 11/29: $2,673.90
Gold price 12/6: $2,654.90

Silver price 11/8: $31.42
Silver price 11/15: $30.33
Silver price 11/22: $31.85
Silver price 11/29: $31.10
Silver price 12/6: $31.49

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):

Item/Price	Low	High	Average	Median
1 oz silver coin:	33.01	48.99	39.42	37.27
1 oz silver bar:	34.00	44.68	39.29	38.84
1 oz gold coin:	2,728.74	2,908.78	2,791.17	2,779.44
1 oz gold bar:	2,740.78	2,789.80	2,752.73	2,747.03

The Single Ounce Silver Market Price Benchmark (SOSMPB) trended well lower this week, to $38.71, a decline of $1.73 cents below the November 29 price of $40.44 per troy ounce.

Prices have continued their retreat in both gold and silver. While these lower levels may be temporary, there's reason to believe that Trump policies may keep a lid on prices for a longer period of time. Upcoming Chinese New Year and wedding season in India are likely to boost demand over the near term and silver supply is low. Central banks may have slowed their purchasing of gold slightly, though that also appears to be only a temporary condition.

The longer outlook for the U.S. dollar and fiat currencies in general continues to put a floor under gold prices, with silver lagging, but still tagging along.

WEEKEND WRAP

With the fall of the Syrian government making headlines Sunday morning, there's little doubt that incoming President Trump has already been in contact with world leaders and is influencing decisions on military and economic fronts. Syria's demise may well have been part of a compromise package worked out between Trump and Putin, with Ukraine the ultimate bargaining chip. Russia's willingness to allow Assad's government to collapse and its leader to flee comes at a most opportune time for the United States and its major Middle East ally, Israel.

President Trump promises an end to militarism and conflict and greater competence and cooperation in foreign affairs. If he can also keep inflation down, cut taxes for the middle class, and spur domestic manufacturing, what's not to like?

Food for thought as we proceed through the holidays towards Inauguration Day.

At the Close, Friday, December 6, 2024:
Dow: 44,642.52, -123.19 (-0.28%)
NASDAQ: 19,859.77, +159.05 (+0.81%)
S&P 500: 6,090.27, +15.16 (+0.25%)
NYSE Coposite: 20,107.79, -49.66 (-0.25%)

For the Week:
Dow: -268.13 (-0.60%)
NASDAQ: +641.60 (+3.34%)
S&P 500: +57.89 (+0.96%)
NYSE Composite: -164.25 (-0.81%)
Dow Transports: -739.23 (-4.20%)

Stocks Retreated Prior to November NFP +227,000; Sold the Rumor and Appear to be Buying the News

Futures were initially lower after the BLS announced November Non-Farm Payrolls up 227,000, but changed direction before 9:00 am ET, a half hour after the jobs data became public.

Overall, though the number of jobs created in November was an enormous improvement from the October disaster, which was revised up by 24,000, from +12,000 to +36,000.

From the release:

Total nonfarm payroll employment rose by 227,000 in November, and the unemployment rate changed little at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment trended up in health care, leisure and hospitality, government, and social assistance. Retail trade lost jobs.

Particular notice should be paid to that last, brief, four-word sentence: Retail trade lost jobs.

In a healthy, normal U.S. economy, retail would have been adding jobs in anticipation of increased holiday sales. As a whole, retail trade lost 28,000 jobs over the course of the month. That drop can probably be attributed to a small number of factors, the most prominent being the continuing shift from brick-and-mortar physical stores to online shopping. The internet has completely revolutionized how retail operates. Some companies have adapted, others are still playing catch-up, while some have given up and gone out of business, like Bed, Bath and Beyond, Big Lots, Rue21, Express, 99¢ Only, Joann, The Body Shop, and a host of restaurant chains, led by T.G.I Friday's and Red Lobster.

Accelerating the retail decline is the decimation seen in the number of shopping malls overall. according to Capital One Research, in 1986, there were some 25,000 malls in the United States. On average, from 1986 to 2017, 581 shopping malls closed every year. From 2017 to 2022, the rate of mall closures practically doubled to 1,170 closing every year.

The other factor can be described as an economy teetering on the brink of recession, a condition that's been persisting, or so it seems, for the better part of the last two years. While the Biden administration routinely fudged numbers to their benefit to make the economy appear healthier than it actually was, the coming storm from expected government downsizing at the federal level is about to usher in a recession for real, which is why stock futures headed higher as the cash session approached Friday morning.

As leading indicators go, another one to watch is the price of oil and gas at the pump, both of which are at or approaching multi-month lows. WTI crude oil this morning is trading at $67.58, a sizable decline from the brief high Wednesday morning of $70.34. Gasbuddy.com reports the average price of $3.02 for a gallon of unleaded regular, the lowest price since May, 2021, and also the last time the national average was under $3.00.

If gas isn't moving, cars, trucks, busses and other vehicles aren't either. The lower price of oil and gas is partially the cause of a glut on the global market along with slack demand, especially in developed economies.

With most of Europe already in recession, it won't be long before the U.S. finally admits that things are slowing down. For now, Wall Street is content to believe in anything supporting the narrative that the U.S. is ship-shape and sailing along toward a brighter future, rather than face the reality of a slowing economy, failing infrastructure, and advancing policies that lean heavily towards austerity and deflation.

Believe what you will, but relying on data from the Bureau of Labor Statistics - which just recently had to admit they overstated job creating by 818,000 in 2023 - has been nothing short of a freak show.

Further out along the argument of jobs and the economy is how these figures will affect the Fed's upcoming policy decision, on December 18, and whether the pace of rate cuts will proceed on a regular basis into 2025. That's an easily answered question. The Fed started with a 50 basis point cut in September, cut another 25 basis points in November, and wil likely cut by that same amount again in December and at the next four FOMC meetings in 2025 - January, March, May, and June.

Five cuts of 0.25% will bring the federal funds rate down from its current range of 4.50-4.75% to 3.25-3.50%, a more comfortable level for all involved, at par or slightly above the inflation rate, but stimulative enough to cushion recession losses and keep dis-inflation contained. If the Fed chooses to accelerate the cuts to 0.50% per meeting or continues cuts well into the second half of 2025, that would indicate deeper recession conditions and outright price deflation, which is at the top of the list of greatest Fed fears, alongside threats from crypto-currencies, Trump policies, and the BRICS.

Friday's trading may offer some indication of what's ahead. Should the morning's relaxed attitude devolve into another day of selling, the message might be that the legendary bell at the top of rallies has been rung, though there's always a "Santa Claus" rally to brighten spirits before year's end.

If the market considers a recession, job losses, and government austerity a recipe for higher stock prices - how could they? - then the bubble still isn't ready for popping. The remaining 16 trading days in 2024 ought to be interesting, but even more so, what happens in January is sure to be enthralling.

At the Close, Thursday, December 5, 2024:
Dow: 44,765.71, -248.33 (-0.55%)
NASDAQ: 19,700.72, -34.39 (-0.17%)
S&P 500: 6,075.11, -11.38 (-0.19%)
NYSE Composite: 20,157.44, -31.16 (-0.15%)

Bitcoin Vaults Over $100,000; Dow, S&P, NASDAQ Close at Record Highs; Bubble Economy Built by Welfare, Pensions, Social Security, and Credit Cards

OK, this is a bubble.

There's no need to belabor the point. Everything about the stock markets says, "bubble." Not that anybody cares; we're all going to be rich because the U.S. economy - um, sorry, the stock market and the economy are two different things - is humming right along.

The U.S. economy is built on welfare payments, pension account payouts, Social Security benefits and other government handouts and entitlements to rich and poor alike. Money - actually currency - spent using credit cards accounts for another huge chunk of GDP, along with those never-ending monthly payments to CapitalOne, Bank of America, Visa, Mastercard, and other credit purveyors.

All of this spending makes up U.S. GDP, which is a horrible measure of the health of an economy because it includes all manner of expenditures by government which actually doesn't produce much of anything other than more debt.

In any case, the U.S. debt to GDP calculation shows the ratio going over 100% in 2020 (plandemic), hitting 124% that year and remaining above 100% since. In other words, Total federal debt exceeds annual GDP, generally understood by economists to be a sign of an ailing economy (not one that's running on all cylinders, stocks making record highs).

Not convinced? How about this:

In 2024, an average of almost 68 million Americans per month will receive a Social Security benefit, totaling about $1.5 trillion in benefits paid during the year.

That's a direct quote from the Social Security Administration in their fact sheet [PDF].

Still not convinced?

In fiscal year 2023, Total Welfare Expenditures by the federal government were $1.1 Trillion, including Medicaid payments, accounting for 18% of federal outlays. Without Medicaid, the total was $485 billion, with the single largest program, SNAP (food stamps), accounting for $135 billion, up from $64 billion just five years earlier (fiscal year 2019). Hmmm, no wonder poor people are so fat.

Credit card spending (transactions for goods and services) was just short of $5 trillion in 2022. Ten years prior, 2012, the toal was just above $2 trillion. Credit card spending has more than doubled in just the last 10 years. If the economy is doing so well, why is everybody borrowing to pay for things?

Without welfare and pension benefits and items bought with credit cards, what would Walmart's profits look like? Apple's? How many new iPhones would have been purchased? Home Depot?

It's not worth debating. The U.S. economy is a mirage.

Bitcoin, the invisible currency of which less than two percent of wallet addresses hold more than 90% of all total BTC currently in circulation, has gone ballistic, up more than $4,000 in the last 24 hours (4.11%) and up 132.58% year-to-date. Somebody's getting rich. Probably not you.

Bitcoin's up. Stocks are up. Gold and silver had their runs earlier in the year. Since the election (November 5) they're both down nearly three percent. Why? Because this is a bubble economy.

It's like being a bartender at a house of pleasure. Enjoy it while it lasts.

At the Close, Wednesday, December 4, 2024:
Dow: 45,014.04, +308.51 (+0.69%)
NASDAQ: 19,735.12, +254.21 (+1.30%)
S&P 500: 6,086.49, +36.61 (+0.61%)
NYSE Composite: 20,188.60, +2.79 (+0.01%)

How High is Up? Stocks at Record Levels and Going Higher; Wells Fargo Says S&P Will Hit 7,007 in 2025

It's net even Christmas yet, but investors are gifting themselves to all-time highs on the major indices.

On Tuesday, the NASDAQ and S&P both closed at record highs, the Dow took a breather, but stock market analysts are predicting 2025 to be another banner year. Both Deutsche Bank and Yardeni Research have called for the S&P 500 to finish 2025 at 7,000, but the braintrust over at Wells Fargo (yep, those people famous for opening fake bank accounts), led by Christopher Harvey and his team, issued a 2025 year-end target of 7,007, marking his territory as the highest prediction to date. In pissing contest terms, Harvey is top dog.

Time will tell, but there's little doubt that the ongoing stock bubble players don't seem to notice any impediment against soaring into the stratosphere. Who knew making money could be so easy?

For those keeping score, the Shiller PE finished yesterday at the second-highest level ever, 38.61, just ahead of the October 2021 level of 38.58, now chasing the record from November 1999, 44.19.

Color us skeptical.

It used to be common knowledge that when everybody is bullish, it's a good time to be bearish. On that note, exactly why is Warren Buffett hoarding cash? His Berkshire Hathaway holding company is sitting on a dollar stack of $325 billion, enough to buy outright 476 individual companies in the S&P 500. Maybe he's waiting for prices to fall so he can buy them all, except, probably the Magnificent 7 tech giants, Alphabet, Amazon, Apple, Nvidia, et.al.

Has the old man lost his touch? Is he living in the past, when prudence was virtuous and speculation was an art perfected only by the best and brightest, not everyday momentum traders or yield-chasers suffering from FOMO (Fear Of Missing Out)?

Well, it's the holiday season, after all, so why throw cold water on the Christmas parade? After all, in a little more than a month, Joe Biden and all the lefties will begin to fade into the woodwork, Donald Trump will lead the grand MAGA movement, everybody will benefit, and America will re-emerge as the greatest place on earth.

Actually, there is some believability to that argument and over here at Money Daily we're all for it.

It just sounds too good to be true, if only because stocks are already well extended. Nobody ever suggested, “buy high, sell higher.”

Maybe Moe, Larry and Curly can provide some clues.

At the Close, Tuesday, December 3, 2024:
Dow: 44,705.53, -76.47 (-0.17%)
NASDAQ: 19,480.91, +76.96 (+0.40%)
S&P 500: 6,049.88, +2.73 (+0.05%)
NYSE Composite: 20,185.81, -27.41 (-0.14%)

What's the Big Deal About BRICS-Pay and Trump Tariffs? Some Background on De-Dollarization and Currency Debasement

Loads of ink and countless electronic bytes of data were spent Monday deciphering the impact of President-Elect Trump's post on his social media platform, TruthSocial.

"We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other Currency to replace the mighty U.S. Dollar or, they will face 100% Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy."

Yahoo! Finance reports the proximate cause for Trump's post is the formation of a payment system known as BRICS Pay, according to Douglas Holtz-Eakin, president of the American Action Forum.

BRICS Pay is a new attempt by the BRICS group of countries to use digital payment and QR code technology to provide an alternative to dollar-dominated networks — specifically the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which Russia was barred from upon its invasion of Ukraine in February, 2022.

Since then, war has raged, NATO nations having supplied Ukraine with all manner of weaponry, to little avail. Russia continues to take territory and advance through the country. The US, UK, and EU have applied various sanctions to Russia and other countries, also with little effect. Russia's economy, in fact, is growing at a faster rate than most Western nations, especially European ones, France, Italy, and Germany, which are falling or have already entered into recession.

The BRICS-pay website is indeed registered in Russia, but is likely more for demonstration purposes and trolling of U.S. interests. What concerns Trump, and, more importantly, the Federal Reserve, is that BRICS nations have been bypassing use of the U.S. dollar in international trade and transactions, using local, national currencies for settlement. Also, use of the Chinese yuan has been advanced, as has gold, as a settlement mechanism.

At the last two most recent BRICS summits, in Kazan, Russia this year and South Africa in 2023, there were more than a few discussions about the establishment of a BRICS currency, ostensibly to compete with the dollar and euro in international trade, though nothing concrete has been established. The discussions among finance ministers of BRICS nations and affiliates continue and there have been tests done using blockchain technology, most specifically the recent MBridge tests that were suddenly halted and de-platformed by the Bank of International Settlements (BIS), reported by Vince Lanci of GoldFix in late October.

Whatever Trump, in association with the Federal Reserve, plans to do to counter the ultimate establishment of competing reserve currencies in the wider world and especially in the so-called, "Global South", those efforts are likely to be in vain unless the U.S. reverses course on its continuing hectoring of countries which refuse to be bullied by U.S. hegemony and insistence on use of the dollar in trade settlement.

The dollar has lost more than 97% of its purchasing power since inception of the Federal Reserve and is unlikely to change direction. The vaunted U.S. dollar is a dying currency, just as others, the yen, euro, franc, and pound, which are backed by nothing more than faith. Eventually, a shift will be made to better, more stable forms of payment that are not debt-based, likely to be backed by gold, silver and/or other commodities.

Since the U.S. weaponization of the dollar, the world has moved away, an oft-heard phrase by countries trading with the United States is "getting nothing for something." Abandonment of the U.S. dollar as a means of exchange follows along with its being a poor, negligible store of value.

An article on Sputnik teases, Trump's Threat of 100% Tariffs Targeting BRICS Would Blow Up in America's Face.

Americans have reason to be concerned. After the most recent bout of inflation - caused by the Fed's relentless currency creation out of thin air - prices for even everyday items have risen to levels that are unobtainable for average citizens. Losing reserve currency status, which is well underway, would render the dollar completely worthless. Change is necessary.

At the Close, Monday, December 2, 2024:
Dow: 44,782.00, -128.65 (-0.29%)
NASDAQ: 19,403.95, +185.78 (+0.97%)
S&P 500: 6,047.15, +14.77 (+0.24%)
NYSE: 20,213.22, -58.82 (-0.29%)

WEEKEND WRAP: Stocks Rally Higher; Oil Continues Slump; Gas Prices Under $3.00 in Majority of U.S. States; Shiller PE: 38.54

Market participants didn't let the short week deter them from continuing to snatch up stocks, especially those on the Dow, which outpaced the S&P and NASDAQ for the week, with the S&P 500, NYSE Composite, and Dow Industrials closing out November at record highs. The NASDAQ closed just 80 points below its own record closing price (19,298.76, November 11, 2024).

Stocks

Adding Nvidia (NVDA) to the Dow Jones Industrials may be considered market rigging or just plain genius, as the chip-maker supplanted flagging Intel (INTC) in the index, the real money this week was made on the other stock that was swapped in on November 8, Sherwin-Williams (SHW), which replaced chemical giant Dow, and was among the week's leaders among Dow components, up two-and-a-half percent while Nvidia shed more than two percent.

The Dow's move was helped along by Amazon (AMZN), up five percent, and by Boeing (BA), which was up nearly two percent on Friday's short session and up more than four percent on the week.

On a month-by-month basis, November was the best of 2024 for the Dow and S&P 500. It looks like a safe bet that the S&P 500 can finish the year up more than 20 percent, which would be the first time since 1998-99 that the index rose 20% or more in consecutive years.

With just a month left for trading in 2024, investors have been rewarded for their persistence overall. Year-to-date, all the major indices are sporting very healthy gains:

NASDAQ	19,218.17	+4,452.23	+30.15%
S&P 500	6,032.38	+1,289.55	+27.19%
NYSE Composite	20,272.04	+3,430.42	+20.37%
Dow Industrials	44,910.65	+7,195.61	+19.08%

There are just 21 trading days remaining to the year. With Christmas Day falling on a Wednesday, the last full week will be split down the middle. Market-moving events include November Non-Farm Payroll data this Friday (December 6), and the FOMC meeting which concludes Wednesday, December 18.

Barring any unforeseen disruptions, 2024 will go down as one of the better years of the 21st century for stock performance, right up there with 2003, 2009, 2013, 2019, and 2021, each of which saw the S&P 500 rise by more than 25%.

Treasury Yield Curve Rates

Date	1 Mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
10/25/2024	4.89	4.79	4.73	4.68	4.51	4.29
11/01/2024	4.75	4.74	4.61	4.53	4.42	4.28
11/08/2024	4.70	4.69	4.63	4.53	4.42	4.32
11/15/2024	4.70	4.67	4.60	4.52	4.44	4.34
11/22/2024	4.72	4.67	4.63	4.53	4.46	4.42
11/29/2024	4.76	4.69	4.58	4.52	4.42	4.30

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
10/25/2024	4.11	4.05	4.07	4.15	4.25	4.58	4.51
11/01/2024	4.21	4.18	4.22	4.30	4.37	4.68	4.57
11/08/2024	4.26	4.18	4.20	4.25	4.30	4.58	4.47
11/15/2024	4.31	4.27	4.30	4.36	4.43	4.70	4.60
11/22/2024	4.37	4.32	4.30	4.35	4.41	4.67	4.60
11/29/2024	4.13	4.10	4.05	4.10	4.18	4.45	4.36

There was huge movement in longer-dated maturities this week, a signal that the market believes the Fed will not pause in December or thereafter, but will continue to cut the federal funds target rate until it falls below all rates on the yield curve and remains higher than inflation, as measured by annualized CPI, the latest, 2.6%.

This implies an ultimate yield on the overnight federal funds of 3.25% to 3.50%, possibly 3.00% to 3.25%, but likely not any lower than that, as the Fed wishes to avoid another damaging bout of inflation, which they believe to have somewhat under control.

Currently holding at 4.50-4.75%, the market is anticipating 0.25% cuts at upcoming FOMC meetings, December 17-18, January 28-29, March 18-19, May 6-7, and June 17-18. Five cuts, amounting to 1.25%, gets the target rate down to 3.25-3.50%, at which point they would hold, likely for a long time unless some extraneous event upsets the apple cart.

Confident that the fiscal side of the equation at the Treasury Department will exhibit more conservative policies than what has been maintained over the Biden-Yellen years, the Fed can be fairly certain that government spending will be massively curtailed if President Trump and his able henchmen at the Department of Government Efficiency (DOGE), Elon Musk and Vivek Ramaswamy, gets his way.

The promise of reduced government spending and borrowing to finance deficits should open up lending markets to the private side. The other benefit of lower rates would be the effect on interest payments by the federal government, which, at over $1 trillion annually, is entirely unsustainable and threatens to bankrupt the nation.

Speculators may see the Fed cutting even deeper, especially in the case of general disinflation or outright deflation, which would be even more stimulative and cut government interest payments even further.

From what's happened in just the last month, with notes and bonds getting to oversold positions before large buyers stepped in this week, continued cuts appears to be the plan being executed. Lest people forget, there's a new sheriff in town, due to put on the badge come January 20, 2025, and his deputies are armed and looking to round up suspects and criminals.

The 2s-10s spread remains in normalized (dis-inverted) territory at +5, and, while full spectrum, 30days-30years, took a big step backwards from -12 to -40, that condition is likely to be temporary if the Fed cuts in December and beyond. The flattening - prior to steepening - of the yield curve continues apace.

Spreads:

2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48
12/15/2023: -53
12/22/2023: -41
12/29/2023: -35
1/5/2024: -35
1/12/2024: -18
1/19/2024: -24
1/26/2024: -19
2/2/2024: -33
2/9: -31
2/16: -34
2/23: -41
3/1: -35
3/8: -39
3/15: -41
3/22: -37
3/28: -39
4/5: -34
4/12: -38
4/19: -35
4/26: -29
5/3: -31
5/10: -37
5/17: -39
5/24: -47
5/31: -38
6/7: -44
6/14: -47
6/21: -45
6/28: -35
7/5: -32
7/12: -27
7/19: -24
7/26: -16
8/2: -08
8/9: -11
8/16: -17
8/23: -09
8/30: 00
9/6: +06
9/13: +09
9/20: +18
9/27: +20
10/4: +5
10/11: +13
10/18: +13
10/25: +14
11/1: +16
11/8: +5
11/15: +12
11/22: +4
11/29: +5

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123
12/15/2023: -154
12/22/2023: -149
12/29/2023: -157
1/5/2024: -133
1/12/2024: -135
1/19/2024: -118
1/26/2024: -116
2/2/2024: -127
2/9: -117
2/16: -103
2/23: -112
3/1: -121
3/8: -125
3/15: -109
3/22: -112
3/28: -115
4/5: -93
4/12: -87
4/19: -77
4/26: -70
5/3: -85
5/10: -87
5/17: -94
5/24: -99
5/31: -83
6/7: -92
6/14: -113
6/21: -103
6/28: -96
7/5: -101
7/12: -108
7/19: -103
7/26: -104
8/2: -143
8/9: -131
8/16: -138
8/23: -141
8/30: -121
9/6: -125
9/13: -117
9/20: -80
9/27: -80
10/4: -75
10/11: -58
10/18: -54
10/25: -38
11/1: -18
11/8: -23
11/15: -10
11/22: -12
11/29: -40

Oil/Gas

WTI crude oil took it on the nose again this week, closing at $68.15 on Friday, down sharply from $71.81 last Friday. Oil's price reflects the hastily-called Israeli cease fire in the Middle East and the lack of any real nuclear threat coming out of the Ukraine-Russia conflict. Mostly, it's been saber-rattling by the NATO crowd and stoicism by Putin and Russia.

Gasbuddy.com reports the national average for a gallon of unleaded regular gas at the pump at $3.03 a gallon, down another penny from the prior week.

California continues to be the price leader, at $4.37 a gallon, down four cents from the prior week.

Pennsylvania prices continue to head lower, at $3.22, with the Keystone State holding the high price in the Northeast, though it is at or near the lowest level in three years. New York was static, at $3.13. Connecticut ($3.07) and Massachusetts ($3.02) were slightly higher, while Maryland slipped another six cents to $3.06 per gallon, the second straight weekly decline of six cents. Prices in the Midwest continue to wane, though Illinois was up a nickel ($3.20).

Fuel prices in Oklahoma ($2.39) continue to be by far the lowest in the nation, down another seven cents on the week. Following are Texas ($2.52), down nine cents, Mississippi ($2.55), Arkansas ($2.58), Louisiana ($2.61), and Tennessee ($2.68). Florida ($3.10) remains the outlier, with all other Southeastern states well below $3.00, including Georgia ($2.88) and North Carolina ($2.83).

Sub-$3.00 gas can now be found in some locations in at least 35 U.S. states, mostly in the Southeast and Midwest, but now spreading west, with Montana, Utah and Wyoming joining the sub-$3.00 party and a few Northeast states, Delaware the latest to drop below $3.00.

Western states are still the highest overall. Arizona ($3.19) steadied on the week, with Oregon at $3.51, Nevada at $3.64, and Washington at $3.98, leaving only California above $4.00. Utah ($2.97) and Idaho ($3.01) have both come down to levels seen 12 months ago.

Bitcoin

This week: $97,184.05
Last week: $97,283.64
2 weeks ago: $90,205.13
6 months ago: $67,737.81
One year ago: $39,463.38
Five years ago: $7,521.31

Bitcoin remains atop the asset leaderboard, up a stunning 120% year-to-date and more than 40% since the November 5 U.S. elections, topping out at $98,367 this week.

Precious Metals

Gold:Silver Ratio: 85.97; last week: 86.13

Per COMEX continuous contracts:

Gold price 11/1: $2,745.90
Gold price 11/8: $2,691.70
Gold price 11/15: $2,567.40
Gold price 11/22: $2,743.20
Gold price 11/29: $2,673.90

Silver price 11/1: $32.58
Silver price 11/8: $31.42
Silver price 11/15: $30.33
Silver price 11/22: $31.85
Silver price 11/29: $31.10

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):

Item/Price	Low	High	Average	Median
1 oz silver coin:	37.00	45.00	40.59	40.00
1 oz silver bar:	33.26	47.91	40.67	40.50
1 oz gold coin:	2,742.87	2,844.21	2,801.07	2,816.94
1 oz gold bar:	2,750.70	2,842.06	2,770.03	2,760.64

The Single Ounce Silver Market Price Benchmark (SOSMPB) was up nearly a dollar this week, to $40.44, an increase of 94 cents over the November 22 price of $39.50 per troy ounce.

Not much to comment upon concerning gold and silver prices. While the COMEX and LBMA are up to their usual tricks and the past few weeks have seen prices retreat and now level off, retail buyers seem more than content to pay high premia for finished goods. Chinese New Year and wedding season in India are likely to boost demand. Central banks may have slowed their purchasing slightly, though that appears to be only a temporary condition.

WEEKEND WRAP

There are changes afoot. With the political situation remaining up in the air until Trump's inauguration, there are likely to be any number of fits and starts in verious sectors and asset classes. With certain funds having already closed their books for 2024, and, with year-end squaring up proceeding, stocks are just as likely to waver as to move higher.

The Shiller PE ratio stands at 38.54, just shy of the second-highest ever, 38.58, from October 2021.

At the Close, Friday, November 29, 2024:
Dow: 44,910.65, +188.59 (+0.42%)
NASDAQ: 19,218.17, +157.69 (+0.83%)
S&P 500: 6,032.38, +33.64 (+0.56%)
NYSE Composite: 20,272.04, +62.22 (+0.31%)

For the Week:
Dow: +614.14 (+1.39%)
NASDAQ: +214.52 (+1.13%)
S&P 500: +63.04 (+1.06%)
NYSE Composite: +148.59 (+0.74%)
Dow Transports: _251.76 (+1.45%)