December CPI at 0.4%, 2.9% Rise Year-over-Year is Cause for Celebration on Wall Street; Futures Soar; Oil at 4-Month High

With the inauguration of President Trump less than a week away, there was no lack of gamesmanship and late-day tape-painting in financial markets Tuesday.

The repetitive bearish chart pattern of the major indices opening higher and stumbling lower throughout the session prevailed again on Tuesday. The Dow was the lone survivor, ending the day with gains beyond the gap-up open. Though the S&P posted an insignificant gain, it spent much of the session in negative territory. The NASDAQ was bruised, the 41-point gain overshadowed by new intra-day lows at 18,926.60. It was off more than 150 points just 45 minutes prior to the closing bell. Market riggers furiously bought shares and covered shorts in the final minutes anticipating another boost to the futures when December CPI figures are released Wendesday morning.

Those who bought up NASDAQ and Dow shares into Tuesday's close were on the right track. Just after 8:00 am ET, NASDAQ futures were up more than 80 points, but the Dow was flying higher, adding more than 200 (+0.48%).

Following the PPI figures on Tuesday which beat expectations (lower than forecast), there seemed ot be little in the way of anxiety over the CPI. Fuel prices were sure to cause a bump, but investors appeared confident that the numbers would not upset the status quo, in the belief that the Fed had done enough to quell the inflation beast and might possibly continue lowering rates later in the year. Hopes for a fourth straight rate cut have been dashed due to last week's December Non-farm Payroll data, which came in stronger than anticipated, with 256,000 new jobs minted in the final month of 2024.

Despite the knowledge that the BLS numbers are almost always wrong and subject to revisions, Wall Street gamblers rely upon them nonetheless in making trades, just another example of mal-investment and wild speculation based on faulty assumptions. Wall Street continues to trend overwhelmingly bullish, despite recent losses on all of the major indices. Since early December, stocks have been under pressure. The vaunted Santa Claus rally never materialized, yet the lower Manhattan crowd still buys into myths like Santa, the Tooth Fairy, Easter Bunny, unicorns, non-farm payrolls, and retail sales, which will be released Thursday morning.

Wednesday's enthusiasm prior to the CPI release had much to do with bank earnings reported by BlackRock, Bank of New York Mellon (BK), JPMorgan Chase (JPM), Citigroup (C), and Goldman Sachs (GS), all of which topped estimates for the fourth quarter. Banks are just raking in profits thanks to consumers who see nothing wrong with borrowing on credit cards with interest rates as high as 24-30% in some instances. The average credit card user is paying through the nose, around 20.15% according to the latest data from bankrate.

So, at 8:30 am ET, did the BLS throw a fly into the ointment?

CONSUMER PRICE INDEX - DECEMBER 2024

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent on a seasonally adjusted basis in December, after rising 0.3 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment.

The index for energy rose 2.6 percent in December, accounting for over forty percent of the monthly all items increase. The gasoline index increased 4.4 percent over the month. The index for food also increased in December, rising 0.3 percent as both the index for food at home and the index for food away from home increased 0.3 percent each.

The index for all items less food and energy rose 0.2 percent in December, after increasing 0.3 percent in each of the previous 4 months. Indexes that increased in December include shelter, airline fares, used cars and trucks, new vehicles, motor vehicle insurance, and medical care. The indexes for personal care, communication, and alcoholic beverages were among the few major indexes that decreased over the month.

The all items index rose 2.9 percent for the 12 months ending December, after rising 2.7 percent over the 12 months ending November. The all items less food and energy index rose 3.2 percent over the last 12 months. The energy index decreased 0.5 percent for the 12 months ending December. The food index increased 2.5 percent over the last year.

Nope. Futures shot straight up, because, even though inflation is still very much untamed, the monthly figure of +0.4% was spot on Wall Street's expected number even though it was the highest monthly figure since March. Never mind that the year-over-year number of 2.9% was the highest since July.

Right after the release, Dow futures ballooned to +640, NASDAQ was giddy, up 390, and S&P futures were up 92 points, all heading higher, defying all logic. Bankers are getting fat and people are going into debt buying food. Rate cuts? Who needs them?

Gold even got a boost, up over $2,700, though that's surely going to be short-lived. WTI crude shot up to $77.16 a four-month high. Thanks, Joe, Kamala, and all you lefty lovers of wind, solar, subsidies, electric cars, alien probes.

Well, at least booze is cheaper.

Ironically, President Joe Biden will deliver a farewell speech from the Oval Office tonight that's expected to focus on key achievements of his administration. Unmentioned will be the 4-8 million illegals that crossed into the U.S. 2021-2024, the highest inflation rate in more than 50 years, millions of $$$$ sent to Ukraine in a winless war, or the promotion of drag queen story hour, LGBTQ++ immorality, high crime rates, FEMA failures, devastating fires in Los Angeles, or record homelessness.

It's all good. We got DEI!

At the Close, Tuesday, January 14, 2025:
Dow: 42,518.28, +221.16 (+0.52%)
NASDAQ: 19,044.39, -43.71 (-0.23%)
S&P 500: 5,842.91, +6.69 (+0.11%)
NYSE Composite: 19,176.65, +129.33 (+0.68%)

Bloomberg Advances Fake News Syndicate (FNS), Futures, Euro Stocks Rally; PPI Still Hot at +0.2 in December, +3.3% Y-O-Y

The fake news roll-out on a near-daily basis is becoming almost comical. It is rather disturbing, however. Last week it was CNN and the Washington Post issuing reportus bogusimus, aka, fake news. This morning, it's Bloomberg's turn.

Stocks bounce and dollar slips after tariff report

Europe’s Stoxx 600 index snapped a two-day losing streak to rise 0.5%, as Bloomberg News quoted people familiar with the matter as saying graduated tariff hikes of about 2% to 5% a month are under discussion, rather than aggressive one-time increases.

"Bloomberg News quoted people familiar with the matter..." says it all.

The story goes on without any "quote" other than a few from Shaniel Ramjee, senior investment manager at Pictet Asset Management.

Wikipedia says, "Pictet Asset Management manages assets for institutional investors and investment funds, including large pension funds, sovereign wealth funds, and financial institutions. It also manages assets for individual investors through an extensive range of mandates, products, and services."

Well, OK. Quote some flunky in Geneva, Switzerland or Genoa, Italy, who cannot be held accountable for anything. That's SOP for FNS (Fake News Syndicate).

Does Michael Bloomberg hate Donald J. Trump?

Opinions vary, but it's a safe bet that the vainglorious Bloomberg surely isn't thrilled that the Donald is about to become president of the United States for a second time. The two have a history. After all, Trump built or expanded much of his real estate empire in New York City while Bloomberg was mayor. Additionally, Bloomberg launched a brief, failed bid for president in 2020.

A couple of tweets from the campaign trail suggest the two don't like each other very much.

Trump called Bloomberg a loser.

Bloomberg responds that people call Trump a "carnival barking clown" behind his back.

That's just the tip of the iceberg. A search for "Trump Bloomberg feud" or similar reveals a deep animosity.

European stocks and U.S. equity futures jumped upon release of the story. SSDD.

Stocks got pounded pretty hard again on Monday, but the chart pattern was changed. Instead of starting out the session high and proceeding lower (sure as shootin' bear market stuff), stocks started lower and then proceeded to drift higher throughout the day.

That's fine, and maybe there was some actual dip-buying out there, but the problem is that new, lower intraday lows were established on the S&P (5,781.10) and NASDAQ (18,859.79). Coincidentally, both indices bottomed out exactly at 10:30 am ET and made double bottoms right at noon.

With Tuesday's opening bell approaching, the ever-reliable BLS released December PPI at 8:30 am ET:

The Producer Price Index for final demand advanced 0.2 percent in December, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.4 percent in November and 0.2 percent in October. On an unadjusted basis, the index for final demand increased 3.3 percent in 2024 after moving up 1.1 percent in 2023.

On the surface, that doesn't sound good, particularly when drilling down to find that the December rise can be traced to a 0.6 percent advance in the index for final demand goods, which had been quiet in recent months.

Prices for final demand less foods, energy, and trade services (Super Core) rose 3.3 percent in 2024 after advancing 2.7 percent in 2023.

Somehow, Wall Street interpreted the numbers as positive, most likely because they were below heightened expectations (+0.4% on monthly and 3.5% year-over-year). Futures flew higher in knee-jerk fashion after falling close to unchanged earlier. Apparently, the Bloomberg fake news article didn't have much effect, though, amid rumors that PPI and CPI had been leaked, there might have been some necessity in boosting futures in the wee hours of the U.S. morning if only to avoid a sharp decline when PPI was made public.

Tin foil hats firmly attached, Tuesday morning futures appear to be a case of classic misdirection. Looks like the markets are going to revert back to the chart pattern of recent vintage: up at the open, down by the close.

At the Close, Monday, January 13, 2025:
Dow: 42,297.12, +358.67 (+0.86%)
NASDAQ: 19,088.10, -73.53 (-0.38%)
S&P 500: 5,836.22, +9.18 (+0.16%)
NYSE Composite: 19,047.33, +84.32 (+0.44%)

WEEKEND WRAP: Stocks Take a Hit, Down Year-to-Date; Long Bond Yields Approach 5%; Gold, Silver Gain on Big December Jobs Report

2025 isn't off to a very good start. In fact, all the major U.S. indices are down for the year, albeit at a very early juncture, but the first six trading days of the year have not been happy ones for equity holders.

Stocks

Investors got spanked, and hard, on Friday, after the BLS announced January job gains of 256,000, shattering estimates that largely ranged between 110,000 and 160,000. The good news was enough to trigger Wall Street's inverse response, that a strong economy is not conducive to lower interest rates, which is what the stock pushers and pumpers have been squealing for since the Fed began raising rates nearly three years ago (March 2022).

Not only did the selling result in a the biggest decline of the new year on the S&P and the Dow, but it sent the NASDAQ lower, even after a 376-point loss on Tuesday, January 7. The weekly gauge was down as well and stuck stocks on the wrong side of the ledger year-to-date.

Year-to-date:
Dow: -605.77 (-1.4%)
NASDAQ: -149.17 (-0.8%)
S&P 500: -54.59 (-0.9%)
NYSE Composite: -134.09 (-0.7)
Russell 2000: -40.93 (-1.8%)

How bad it is depends on who you ask. The Dow, for instance, has dropped 17 of the last 24 trading sessions after hitting an all-time high on December 4. Since then, it's down 6.83%, just shy of 3,100 points. By comparison, the S&P and NASDAQ have suffered less, losing around five percent over similar time spans, though it appears the NASDAQ-Tech-AI selling spree might be just getting started.

With the January jobs jamboree in the books, investors will begin gauging earnings in the coming week, sweating it out until Trump's inauguration on Monday, January 20. As has become regular practice, the first week of earnings season will be dominated by the biggest banks.

Monday (Jan. 13): KB Homes (KBH)

Tuesday: Applied Digital (APLD)

Wednesday: JPMorgan Chase (JPM), Goldman Sachs (GS), Wells Fargo (WFC), BlackRock (BLK) Citigroup (C), Bank of New York Mellon (BK)

Thursday: Taiwan Semiconductor (TSM), Morgan Stanley (MS), Bank of America (BAC), U.S. Bancorp (USB), UnitedHealth Group (UNH), PNC Financial Services (PNC)

Friday: Citizens Financial Group (CFG), State Street (STT), Regions Financial (RF), Truist (TFC), Schlumberger (SLB), Fastenal (FAST)

In addition, December PPI is released on Tuesday and CPI on Wednesday, both prior to the opening bell. There's also data drops from the Philly and New York Feds, December Retail Sales (Thursday).

Fed Presidents John Williams, Neel Kashkari, and Austan Goolsbee will be out jaw-boning their mumbo-jumbo at various conferences during the week.

Should be just swell.

Treasury Yield Curve Rates

Date	1 Mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
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
12/20/2024	4.43	4.42	4.34	4.35	4.29	4.27
12/27/2024	4.44	4.43	4.31	4.35	4.29	4.20
01/03/2025	4.44	4.35	4.34	4.31	4.25	4.18
01/10/2025	4.42	4.35	4.36	4.33	4.27	4.25

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
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
12/20/2024	4.30	4.32	4.37	4.45	4.52	4.79	4.72
12/27/2024	4.31	4.36	4.45	4.53	4.62	4.89	4.82
01/03/2025	4.28	4.32	4.41	4.51	4.60	4.88	4.82
01/10/2025	4.40	4.46	4.59	4.70	4.77	5.04	4.96

Despite the Fd cutting the federal funds rate by one percent since August with a 50 basis point cut in September (political), and a pair of 25 basis point cuts in November and December, long-dated maturities have not cooperated as intended, instead rising by more than the one-percent blessed by the Fed governors and regional presidents.

Since the day before the first cut in September, the 17th, yield on the 10-year note stood at 3.65%, the 20-year bond yielded 4.02%, and the 30-year returned 3.96%. On the release of the policy announcement on the 18th, they all moved in the opposite direction, to 3.70%, 4.08%, and 4.03%, respectively.

Look where they are now. At a minimum the longest-dated maturities are not one percent lower, but one percent HIGHER! One conclusion to draw from this conundrum is that the bond vigilantes are back with a vengeance, revolting against what they consider to be a grave policy error on the part of the Fed by shunning treasuries by demanding a payoff commensurate with what they percieve as high risk.

They are not alone. America's strongest foreign debt buyers, Japan and China, have been shedding U.S. debt since 2022 and they aren't stopping. According to Bloomberg:

Japanese investors sold a record $61.9 billion of the securities in the three months ended Sept. 30, data from the US Department of the Treasury showed on Monday. Funds in China offloaded $51.3 billion during the same period, the second biggest sum on record.

Part of that strategy has to do with incoming tariffs from the Trump administration, but it is part of an overall tendency to shun U.S. debt markets that began when the the U.S. and Europe sequestered (that's being kind) roughly $300 billion in Russian assets at the start of the Ukraine project (Feb. 2022). While Trump may find a way to end the Ukraine and other conflicts, repairing the financial damage will require even more effort. He could start with ending the tariff regime, which only serves to harm U.S. interests and maybe find a way to return to Russia the funds that are rightfully theirs.

Whether he takes action in those directions, we may begin to find out within eight days. Something's got to give and there's growing talk that a global debt crisis is approaching.

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
12/20: +22
12/27: +31
1/3: +32
1/10: +37

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
12/20: +29
12/27: +38
1/3: +38
1/10: +54

Oil/Gas

WTI crude oil continued its wild ride higher, finishing out the week at $75.70, up from $74.07 the prior Friday. Right after the jobs report, WTI hit a high at $76.75, the highest level in three months. What appears to be moving the price of oil recently is the spate of frigid weather across the lower 48 states, prompting just a little price gouging from those benevolent producers.

This week's bump sent oil prices closer to summer's levels above $82/barrel. This appears to be a little more than a response rally. There's still plenty of winter left and prices tend to rise in the spring, though the supply-demand dynamic remains in favor of consumers.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump unchanged at $3.05 a gallon.

California continues on top, at $4.36 a gallon, remaining well below prices prevailing during the summer.

Pennsylvania prices stabilized, at $3.26, with the Keystone State the price leader in the Northeast. New York saw little change, at $3.11. Connecticut ($3.03) was up slightly while Massachusetts ($2.98) was lower by a penny. Maryland settled lower, at $3.10.

Illinois was four cents higher, to $3.22. Ohio ($2.96) and Indiana ($2.99) dipped back under $3 after a week above.

Fuel prices in Oklahoma ($2.53) continue to be the lowest in the nation, despite rising three cents this week. Following are Mississippi ($2.57), Louisiana and Kansas ($2.66) Texas and Arkansas ($2.67), Tennessee ($2.69), Alabama ($2.74), and Missouri, $2.75. Florida's is steady, at $3.11, Georgia remains sub-$3 at $2.91.

Sub-$3.00 gas can now be found in more than 30 U.S. states. The Northeast and West coast remain over-$3.00 holdouts.

Arizona ($3.03) continues to tease at $3 gas. Oregon checked in at $3.45, Nevada at $3.58, and Washington at $3.89, leaving only California above $4.00. Utah ($3.02) and Idaho ($3.02) remain just above the $3.00 threshold.

Bitcoin

This week: $94,640.44
Last week: $97,453.01
2 weeks ago: $94,597.53
6 months ago: $57,935.24
One year ago: $42,848.36
Five years ago: $8,910.66

The crypto market continues its struggle for identity. The price of bitcoin fluctuates as much as five percent or more weekly, often by that much or more in a single day, which is probably because it's nothing more than a Wall Street slush fund. Watch how quickly it evaporates in the next liquidity crisis or spate of margin calls.

Bitcoin ia a swell place to park money if you can handle the volatility and potential for theft or loss.

Precious Metals

Gold:Silver Ratio: 86.82; last week: 88.13

Per COMEX continuous contracts:

Gold price 12/13: $2,665.90
Gold price 12/20: $2,640.50
Gold price 12/27: $2,636.50
Gold price 1/5: $2,652.70
Gold price 1/12: $2,717.40

Silver price 12/13: $31.00
Silver price 12/20: $30.08
Silver price 12/27: $29.98
Silver price 1/5: $30.10
Silver price 1/12: $31.30

Gold began a serious breakout on the back of Friday's jobs report, vaulting over $2,700 to reach a high of $2,728.90 early in the day before settling down in the afternoon to its highest close in a month. Silver also got the memo, breaking through $31, hitting a high of $31.83.

The outsized gains on Friday indicate that precious metals are on their own flight path. With the blowout jobs report and higher interest rates, PMs would often take a hit in such a scenario. Instead, both got jacked higher because people see inflation rising again and the chance that the Fed will not only fail to lower interest rates again, but possible raise them. That's a sword that cuts both ways. On one hand, gold and silver provide the best protection from currency debasement manifested as inflation. Otherwise, rising interest rates provide an alternative and hedge.

Perhaps there's a growing concern that U.S. treasuries aren't exactly risk-free and subject holders to losing money against inflation. That's a huge plus for gold and silver which continue to gain new supporters in retail channels.

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:	35.00	52.00	42.27	42.00
1 oz silver bar:	38.05	44.95	40.66	40.13
1 oz gold coin:	2,794.70	2,904.70	2,860.71	2,879.68
1 oz gold bar:	2,650.00	2,855.75	2,793.99	2,805.92

The Single Ounce Silver Market Price Benchmark (SOSMPB) galloped ahead, to $41.27, a gain of $1.73 from the January 5th price of $39.54 per troy ounce.

WEEKEND WRAP

The upcoming week will be the first full week of trading for the year. The trend has been lower for stocks and higher for long-dated treasuries.

Is the trend your friend?

At the Close, Friday, January 10, 2025:
Dow: 41,938.45, -696.75 (-1.63%)
NASDAQ: 19,161.63, -317.25 (-1.63%)
S&P 500: 5,827.04, -91.21 (-1.54%)
NYSE Composite: 18,963.01, -277.73 (-1.44%)

For the week:
Dow: -793.68 (-1.86%)
NASDAQ: -460.05 (-2.34%)
S&P 500: -115.43 (-1.94%)
NYSE Composite: -291.28 (-1.51%)
Dow Transports: -83.60 (-0.52%)
Russell 2000: -79.24 (-3.53%)

Year-to-date:
Dow: -605.77 (-1.4%)
NASDAQ: -149.17 (-0.8%)
S&P 500: -54.59 (-0.9%)
NYSE Composite: -134.09 (-0.7)
Russell 2000: -40.93 (-1.8%)

December Non-Farm Payrolls Surprise at 256,000 Jobs; Stocks Headed to End Week Badly; Plan for Inflation or Deflation?

There was a sense of anxious expectation in advance of the December Non-farm Payroll data released at 8:30 am ET on Friday. Stock futures meandered about, directionless, though negative, ahead of the number. By contrast, reaction to the release was swift and decisive. Futures tanked. Straight into the toilet, because if the employment situation is strong, as this release suggests, then the Fed will have less incentive to lower the federal funds target rate at their upcoming FOMC meeting January 28-29. Wall Street doesn’t abide by that.

Right around 9:00 am ET, a half hour after the release, Dow futures were down 330 points, NASDAQ futures fell 215, and S&P futures were down 50.

From the BLS:

Total nonfarm payroll employment increased by 256,000 in December, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment trended up in health care, government, and social assistance. Retail trade added jobs in December, following a job loss in November.

The number was rather large and beyond most expectations. However, it's important to note where the jobs were created: health care, government, and social assistance. Two of those - government and social assistance - actually intersect. Health care also crosses into those areas, so, most of the jobs came from the same basic service area encompassed largely in the public sector. Retail added jobs during the holidays. No, really, they did. Big surpise (Hint: most of those December retail hires won't last through January).

Adding up the largest increases:
Retail: +43,000
Leisure and hospitaolity: +43,000
Health Care: +46,000
Government: +33,000
Social assistance: +23,000

That gives us +188,000 of the 256,000 jobs created in December. Small gains in education, professional and business services, information, financial services, and transportation account for the remaining 68,000 jobs.

Naturally, the numbers ar not reliable, being nothing more than estimates by the fudgers at BLS, but Wall street takes them at their word - probably a mistake. In any case, the end of the week looks bleak.

Through Wednesday's close (markets were shuttered Thursday), the Dow was down 97 points, the NASDAQ off 142, and the S&P was 24 points lower. With Friday's cash session looking like a bummer, the week looks like it will belong to the bears, though there's always the chance of some miracle rally occurring, the cause a report by some "unnamed sources" or maybe a mysterious, deep-pocketed buyer snatching up index options.

Otherwise, it appears everything is going according to plan to dump the stock market and the economy right as Donald J. Trump takes the oath for the Presidency. Some will say, "meh." Others may be just a little more opinionated.

Here's a mental exercise for anybody who is concerned about their financial future, which should be, well, just about everybody. This is something that requires a bit of thought, unlike just popping off an answer to a poll.

It's a simple A-B choice: Which would you prefer, a hyper-inflationary spiral or a deflationary collapse?

There's no in-between. The banking monopolies have seen to that. It's one or the other.

In the hyper-inflation model, prices for everything increase at an accelerating pace with which your wages cannot hope to keep up. You are forced to dip into savings (which become worth less and less every passing moment) or go deeper into debt - at higher and higher rates of interest - in order to survive.

The deflationary condition implies that jobs become scarce, pay is low, you might actually be laid off or terminated. Because a high level of unemployment induces a supply-demand dysfunction. Lower and lower demand pushes prices down, but still, few can afford anything beyond the basics. Again, you have to dip into savings (which may be depleted rather quickly) or borrow to survive.

The time element may be worth considering. A hyper-inflation event - like what happened in Weimar Germany or Zimbabwe or Venezuela ore recently - might last three to five years before currency becomes entirely worthless and a new monetary system is brought to bear. The intervening period, with prices rising at a quickening pace, monthly, then weekly, then daily, results in bankruptcies, high crime, suicides. The endgame produces few winners, but the average Jane or Joe gets a second chance at making ends meet and possibly finding some level of prosperity.

Deflation may last longer, perhaps 10 to 15 years, as was the Great Depression, which lasted from roughly 1930 until 1942-43. The basics of life are less abundant and not easily acquired. Poverty, sickness, and starvation are real concerns. It's the ultimate welfare state, wherein almost everybody outside the ultra-rich, receives some form of government aid. Most will be provided with just enough to get by. Like depression era folks were fond of saying, "we had everything, except money."

It's worth looking into and choosing a strategy that fits one or the other scenarios, or both, because there might be a bit of both. There's already been a good bout of inflation, so, like in physics (for every action there's an equal and opposite reaction), some deflation may be on the menu.

Keep front of mind the sage advice of Benjamin Franklin: "If you fail to plan, you are planning to fail."

At the Close, Wednesday, January 8, 2025:
Dow: 42,635.20, +106.84 (+0.25%)
NASDAQ: 19,478.88, -10.80 (-0.06%)
S&P 500: 5,918.25, +9.22 (+0.16%)
NYSE Composite: 19,240.74, +26.86 (+0.14%)

Now, CNN Publishes FAKE NEWS; Stocks Slide Again on Tuesday; Nvidia Gashed; Markets Closed Thursday

On Monday, the Washington Post published a bogus story about Trump paring back tariffs that sent stock futures soaring in the pre-market. Wednesday morning, it's apparently CNN's turn to whip the futures in the opposite direction and send the dollar lower with a spurious screed with the screeching headline:

Trump is considering a national economic emergency declaration to allow for new tariff program, sources say

At 6:30 am, when the story was posted at CNN.com, futures plunged, with NASDAQ futures dropping 120 points in a matter of minutes.

The story begins with this:

President-elect Donald Trump is considering declaring a national economic emergency to provide legal justification for a large swath of universal tariffs on allies and adversaries, four sources familiar with the matter told CNN, as Trump seeks to reset the global balance of trade in his second term.

The declaration would allow Trump to construct a new tariff program by using the International Economic Emergency Powers Act, known as “IEEPA,” which unilaterally authorizes a president to manage imports during a national emergency.

Trump, one of the sources noted, has a fondness for the law, since it grants wide-ranging jurisdiction over how tariffs are implemented without strict requirements to prove the tariffs are needed on national security grounds.

As usual, no names are mentioned, just the usually-mysterious "sources familiar with...". This time, as if to make the fake news more credible, they specifically say FOUR sources, right in the first sentence.

Sorry to be blunt and vulgar, but what a crock of shit.

What this does is whip up anti-Trump sentiment and send the computer algorithms spinning. It's a great thing if you know which way the media is going to send stocks on any given day. Otherwise, it's rather concerning that the mainstream media complex would stoop to such depths, though, having been witness to their antics the past 15 years or so, it's hardly a surprise.

Apparently, this is what the media plans on subjecting the world to for the four years of Trump's presidency. OK, then, after "Russia, Russia, Russia", "Ukraine, Ukraine, Ukraine", and "Biden is Sharp as a Tack", we'll get used to "Trump is Hitler", or "Trump Hates Blacks". Alrighty. Let's get it on. Just 13 days until inauguration.

Stocks didn't perform very well at all on Tuesday, the NASDAQ taking the brunt of the selling, losing nearly two percent on the day.

The same chart pattern that Money Daily has warned about recently continues to be prominent. That is the prevalence of stocks coming out at the open higher and then trading down through the session, only to end lower. It is a pattern indicative of bear market conditions, and, even though stocks are barely off recent all-time highs, these recurring patterns may serve as early warning signs to investors paying close attention to intra-day activity.

Not to worry, only the Dow is down for the year, and only marginally at that (9 points). The other majors have been spared thus far thanks to the huge rally on Friday, January 3rd, but, they've all been skidding since early December. Longer term charts, those which begin prior to December, show the indices all suffering lower lows and lower highs, a worrying sign of sagging investor confidence.

The Dow, in particular, has lost more than 2,500 points since December 4, after hitting an all-time high that day (45,014.04). The S&P recorded its own record close on December 6 (6,090.27). Since then its off 181 points, or, about three percent.

Nvidia was the main culprit taking down the NASDAQ on Tuesday, just one session after it closed at an all-time higher of 149.43. It shed more than six percent Tuesday, closing down 9.29, at 140.14.

All markets will be closed on Thursday, January 9, in respect for President Jimmy Carter, who passed away last month at the age of 100.

At 8:00 am, equity futures were all lower, with NASDAQ futures down 95, Dow futures off 89, and S&P futures shedding 20 points.

Gold is flat at $2,665.00; silver, up marginally, at $30.67. WTI crude is testing resistance at $75/barrel, mostly on predicted persistent cold weather in the U.S. for about another week. Looking very ripe to short.

At the Close, Tuesday, January 7, 2024:
Dow: 42,528.36, -178.20 (-0.42%)
NASDAQ: 19,489.68, -375.30 (-1.89%)
S&P 500: 5,909.03, -66.35 (-1.11%)
NYSE Composite: 19,213.88, -47.54 (-0.25%)