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%)
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