Fed Keeps Interest Rates on Hold at 4.25-4.50%; Rate Cuts Now Questionable; 4Q GDP 2.3% Disappoints; Gold Hits New High Above $2,800

As expected, the FOMC announced on Wednesday that they would keep the federal funds target rate at 4.25-4.50%.

Stocks, which were lower prior to the 2:00 pm ET announcement, slipped, rallied, then fell into a midpoint between the lows of the day and the highs reached during Powell's press conference (which were still negative, though less so).

Confused? Confounded?

The market was absolutely non-committal, vacillating every which way on Powell's every lip movement, ultimately deciding nothing. For his part, Powell refrained from commenting on anything proffered by President Trump, who expressed a desire for lower rates. The Chairman repeatedly declined to comment on questions that were concerned with the Trump administration and was less-than-forthcoming in regard to the Fed's overall direction for rates.

By the end of the session, markets had reached no consensus, leaving traders to make their own determinations on stocks based entirely their own intuitions or preferences. In many ways, the FOMC policy rate presentation and the Chairman's press conference was refreshing, in that they influenced nothing in particular, somewhat the way things used to be before stocks would rise and fall on any indications from the Fed.

Looking ahead, expect FOMC rate policy announcements to be less consequential, a condition that should be palatable to the majority of market participants. Over the past 20 years or so, markets have been overly sensitive to Federal Reserve policies and often unjustifiablly so. A new paradigm, thanks to President Trump and Chairman Powell each making their own decisions without consultation with each other, is emerging, one that will ultimately result in markets that might return to fundamental analysis of individual stocks rather than the passive, macro-dependent paradigm that's been stock in trade since the days of Alan Greenspan and his "irrational exuberance" pronouncement.

With any luck, market participants will begin making stock recommendations based on price/earnings, year-over-year comparisons, and the wisdom of chartists as opposed to stock buybacks, quantitative easing, and interlocution by the Federal Reserve.

Chairman Powell seemed completely at ease in his new role as an innocent bystander, another good sign for markets in general. Who knows? Some day soon, actual price discovery mechanisms might become normative again.

On that joyous note, earnings from Tesla (TSLA), Meta Platforms (META), Lam Research (LRCX), Microsoft (MSFT) were released late Wednesday, followed by those of Caterpillar (CAT), Dow (DOW), MasterCard (MA), Comcast (CMCSA), Nokia (NOK), Southwest Airlines (LUV), UPS (UPS).

It was a mixed bag, with Microsoft taking some heat for failing to meet or substantially exceed expectations in certain areas, particularly concerning AI and cloud metrics, shares dropping by more than four percent prior to the open. Tesla reported a drop in profit, yet the stock is higher pre-market.

Briefly, Lam Research (LRCX) topped earnings and revenue projections, sending share up by more than eight percent initially. Caterpillar (CAT) beat and warned, sending shares down five percent. Dow (DOW) missed, stock losing more than two percent. MasterCard (MA) reported strong earnings, ahead of expectations and is up a little more than one percent, though the stock is richly valued with a P/E over 40. Comcast (CMCSA) beat, but investors aren't happy with Peacock subscription growth, sending shares down seven percent.

Southwest Airlines (LUV) missed on top line, covered bottom line, losing about one percent pre-market. UPS (UPS) failed to deliver, blames Amazon, investors are shredding it, down 15% before the bell. Ouch!

Gold reached a new high earlier in the morning, topping just above $2,804 per ounce. Silver is up nearly three percent, hitting $32.25. Crude oil's slide continues, WTI quoted as low as $72.08 Thursday morning.

Fourth quarter 2024 GDP came in at a lower-than-expected 2.3%, as reported by the Census Bureau. Stock futures, however, remain positive, which, translated, it's going to get ugly, and soon.

Nothing shocking about these developments other than the markets actually beginning to behave like actual markets.

Overall, whether stocks move up, down, or sideways, this new sense of being alone in the wilderness without the guiding hand of the Federal Reserve is generally refreshing.

At the Close, Wednesday, January 29, 2025:
Dow: 44,713.52, -136.83 (-0.31%)
NASDAQ: 19,632.32, -101.26 (-0.51%)
S&P 500: 6,039.31, -28.39 (-0.47%)
NYSE Composite: 19,927.47, -43.15 (-0.22%)

Stocks Regain Footing After DeepSeek Shock; Markets Awaiting FOMC Decision Later Wednesday; Trump Offers Buyouts to 2 Million Federal Employees

Stocks rallied Tuesday, clawing back some of the losses suffered Monday, as analysts weighed the effects China's DeepSeek AI model would have on business plans.

While DeepSeek didn't completely implode the subscription-based models of Microsoft, Google, and others, it certainly caused some thoughts of downsizing, especially in the power consuption area. What may be more affected than tech stocks are energy and nuclear-related issues, as the DeepSeek model may be adopted and adapted by American firms, requiring less energy than previously considered.

There's no doubt that China and the U.S. are going to lock in on an AI arms race, with the end result likley to be somewhat of a tie.

Stocks may be taking a breather in advance of today's FOMC rate policy announcement, though expectations are for the Fed to stand pat at 4.35-4.50% on the federal funds rate.

Late Tuesday, the White House stunned again by offering all two million federal employees early retirement buyouts with eight months severace as the main driver. While government unions, especially AFGE, have already voiced opposition, rank and file workers may be considering the president's offer as the alternative could be being fired for cause or having entire departments shuttered and employees furloughed with no severance in a Reduction in Force (RIF) operation, over which federal unions have little bargaining power.

Money Daily believes that 10-20% of the federal workforce will take the deal and move on, resulting in an immediate increase in the unemployment rate of maybe as much as two percent, but also a quick infusion of cash to the economy, as early retirees will recieve lump-sum payments from the government.

With the opening bell just moments away, stock futures have been declining for the better part of the last hour, sending Dow futures down by 90 points, S&P futures off 20, and NASDAQ futures essentially flat.

Earnings reports from Logitech (LOGI), SAP (SAP), Chubb (CB), and LendingClub (LC) after Tuesday's close, and Teva Pharmaceuticals (TEVA), Progressive Insurance (PGR), General Dynamics (GD), ADP (ADP), T-Mobile (TMUS), ASML (ASML) this morning have failed to impress.

Gold and silver are pricing higher, crude oil continues to slide, holding around $73.25 currently, but more activity will be after the Fed's 2:00 pm ET announcement.

At the Close, Tuesday, January 28, 2025:
Dow: 44,850.35, +136.77 (+0.31%)
NASDAQ: 19,733.59, +391.75 (+2.03%)
S&P 500: 6,067.70, +55.42 (+0.92%)
NYSE Composite: 19,970.63, -9.37 (-0.05%)

THE BLACK SWAN HAS LANDED; China's DeepSeek Blows AI Investments to Smithereens, Crushes NASDAQ, Deflates Tech Bubble

Thanks to Nassim Nicholas Taleb's first - and most famous - book, The Black Swan, most people who are invested in the future, or stocks, or like money from a practical standpoint understand that...

A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was.

Taleb doesn't put much faith in the accuracy of the top market predictors, as noted in the first chapter of The Black Swan:

Our inability to predict in environments subjected to the Black Swan, coupled with a general lack of the awareness of this state of affairs, means that certain professionals, while believing they are experts, are in fact not. Based on their empirical record, they do not know more about their subject matter than the general population, but they are much better at narrating - or, worse, at smoking you with complicated mathematical models. They are also more likely to wear a tie.

[Here's a free download of The Black Swan PDF courtesy of idleguy.com] You're welcome!

Coming from China, last week's release of benchmarks for their AI LLM (Large Language Model) DeepSeek, in terms of cost and ability, is the ultimate irony and pie in the face for the proposed $500 billion Stargate project launched last week (sorry, President Trump, this one is just wrong) by Sam Altman and his OpenAI, SoftBank, Larry Ellison's Oracle (whose extemporaneous pronouncements about instant, personalized vaccines and full spectrum surveillance were the height in cringeworthiness) and investment firm MGX (UAE) and yet another black eye for the U.S. investment community in general.

China's DeepSeek hits all the important benchmarks of the highly-touted, expensive, and energy-intensive U.S. models at a fraction of the cost, and, it's open source, threatening a $16 trillion hole into the stock market. Companies from Google to Microsoft to Meta Platforms have committed billions of dollars in CapEx to developing AI and subscription models to ultimately reap huge revenues from consumers, i.e., muppets devoid of original thought.

Now, all that money might as well go to buying drinks for the Chinese developers at their Nobel Prize afterparty. The weight of this development on U.S. stocks cannot be understated.

Take a good long look at the Shiller PE chart, paying particular attention to the symmetry of the dot-com boom and bust from 1990 to the peak in 1999 back to the bottom in 2009. Then look to the right, where we are now, and the peak in 2021, at the end of the "scamdemic" with another completely fake (thanks to thieves in the White House and on Wall Street) gains since October 2022 to the present and just erase them, because they're completely fake, based on nothing other than the "promise of AI", which has now been completely obliterated, promises shattered along with the less-than-virtuous lives of thousands of speculators.

Yet another tech bubble has grown and festered like a boil, popped like a zit by some crafty Chinese tinkerers.

It took about 12 years to get from the lows in 2009 to the highs in 2021, taking out the last roughly 3 1/2 as a figment of twisted imaginations - along the lines of wiping out Russia via Ukraine - American investors should brace for another eight or nine years of less-than-favorable returns on U.S. stocks. Thankfully, Americans have President Trump to help ease the pain, the worst of it possibly over by mid-2026 and recovery begun just in time for midterm elections where the dim-bulb Democrats will take another swipe at the reigns of power. Hopefully, the electorate will remember the four years of suffering under Biff Biden, and not buy into their rhetoric.

Strange as it may seem, while the NASDAQ was suffering its 8th-largest point loss ever (didn't even make the top 25 in percentage losses, however), the Dow was motoring to the upside, as money flowed into dividend-earning blue chips. The day offered an inverted look back at the late 1990's "old economy, new economy" paradigm. For Monday, at least, the old economy was a winner; the new economy looking more like re-runs of Pets.com sock puppet commercials.

With Tuesday's session less than an hour ahead, futures haven't fully recovered from Monday's rout with NASDAQ futures up just 64 points and S&P futures ahead by 12. Dow futures are 37 points in the red.

Prospects for a bounce-back weren't aided much by earnings reports for Lockheed Martin (LMT), Synchrony Financial (SYF), JetBlue (JBLU), Boeing (BA), General Motors (GM), Royal Caribbean (RCL), Sysco (SYY), Kimberly-Clark ((KMB) released prior to the open.

Synchrony Financial (SYF) was down about four percent in pre-market trading, while Dow component Boeing (BA) missed EPS expectations by a mile, generating a loss of 5.90 per share for the fourth quarter as part of its largest annual loss since 2020. General Motors beat with an EPS for the quarter of 1.92. Shares are down nearly four percent pre-market.

Gold, silver and WTI crude oil were moving higher, after taking losses on Monday. WTI is currently pricing at $74 per barrel, but is in the midst of a sell-off which began last Monday.

The damage from DeepSeek isn't likely to be permanent, though it will reverberate through some of the biggest corporate board rooms, C-suites, and managed funds. When a black swan arrives it usually deposits detrius all over advance revenue plans.

There's going to be some re-thinking about AI, some of which will be done with the assistance of AI. The world's accumulated knowledge simply can't account for unknown unknowns. Somewhere, Donald Rumsfeld is short Nvidia and smiling.

At the Close, Monday, January, 27, 2025:
Dow: 44,713.58, +289.33 (+0.65%)
NASDAQ: 19,341.83, -612.47 (-3.07%)
S&P 500: 6,012.28, -88.96 (-1.46%)
19,980.00, -17.50 (-0.09%)

WEEKEND WRAP: Trump Floods the Zone; America's Golden Age Begins with a Flurry of Executive Orders, Policies, Directives

What a week!

As expected, the inauguration of Donald J. Trump and J.D. Vance as President and Vice President of the Unitd States and their immediate and decisive actions took precedence over anything and everything related to stocks, bonds, money flows, economic data, and even football.

In a wave of executive orders, proclamations and policy directives, Trump and his troops had obviously prepared to "flood the zone", leaving officials in Washington, DC gaping in awe over the swiftness of change brought by the new administration.

Among the more prominent and profound changes effected in just the first six days of Trump's presidency, were:

An end to all DEI and "woke" ideologies
Ordering all federal employees back to office work five days a week
Declared a national emergency at the U.S. southern border and began sending Military troops there
Declared a national energy emergency
Rounding up of illegal immigrants and mass deportations
Renaming the Gulf of Mexico, Gulf of America
Federal hiring freeze
Federal regulation freeze
Issued pardons to January 6 prisoners
Made two genders - male and female - official U.S. policy
Revoked security clearances of 51 former intelligence officials
Removed security details from Anthony Fauci, John Bolton, and others
Overturned many of Biden's EOs and froze or recaptured funds from the Infrastructure Act and Inflation Reduction Act
Put an end to "Green New Deal" policies and subsidies
Extended Tik-Toc negotiations
Released hostages in GAZA

There was more, a lot more, and, honestly, Mr. Trump is just getting started. By the end of the week, Democrats and their RINO brothers and sisters-in-arms in congress were left trying to put out so many fires they didn't know where to aim their hoses. Meanwhile, Trump was lighting up new ones.

Trump appeared virtually to the assembled movers and shakers at the WEF in Davos. He flew out to California to set guidelines for federal aid to victims of fires in and around Los Angeles, pissing off Governor Newsome and the LA mayor.

He sent the Army Corps of Engineers down to western North Carolina to assist in disaster aid.

He wants to dismantle FEMA.

Pete Hesgeth was confirmed as Secretary of Defense with JD Vance casting the deciding vote.

Trump intimated that the 88,000 new IRS hires authorized by congress and Biden would be fired or reassigned (only half-jokingly, "to the border," said Trump)

Depending on sources, Trump fired anywhere from 12 to 18 inspectors general on Friday.

Still on the agenda are, in no particular order, Ukraine, taxes, tariffs, schools, Space Force, Mars, etc. It's going to be an interesting four years.

In an interesting, but decidedly different direction from where Trump was/is taking the country, the Supreme Court voted 8-1 to lift an injunction halting Beneficial Ownership Interest reporting requirements for the Corporate Transparency Act (CTA). The only dissent came from Justice Ketanji Brown (you cannot make this stuff up).

On Thursday, Jan. 23, Supreme Court Justice Samuel Alito granted the federal government its application to lift a Dec. 5 Texas federal district court order that blocked the Corporate Transparency Act. However, Alito’s order does not apply to a Jan. 7 injunction in a separate case.

Effectively, nothing changed. The FinCEN website issued another in a series of alerts:

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.

The "regulation" requires small business owners of LLCs, C-Corps and S-Corps with fewer than 20 employees and $5 million in sales to report owners with a beneficial interest of 25% or more in a company. Besides being selective legislation targeting a specific group (small business) and exemptions for accountants, banks, brokerages, and other financial institutions, the "rule" (it's not a law) violates the 4th, 5th and 10th amendments, according to opponents.

Going forward, with Trump's ban on new regulations, there's a very good likelihood that he'd issue an executive order nullifying the rule and its requirements, or, once Pam Bondi is confirmed as Attorney General, she could just shut down the governments appeals and defenses, or, congress could pass the "Repealing Big Brother Overreach Act", reintroduced Wednesday, January 15, by Senator Tommy Tuberville, R-Ala., and Rep. Warren Davidson, R-Ohio.

One way or another, it appears the dystopian, Orwellian-style attempt to further cripple small businesses in the name of national security is DOA.

Stocks

Stocks went up quite a bit. There wasn't any data to support rising equity prices and only a few choice earnings announcements, some good, some bad. Everybody, especially the money folks on Wall Street, were happy just to have an actual living, breathing president rather than wonder who was running the country.

Financial types were all so caught up in the whirlwind of Trump and the excitement of the week they couldn't resist hitting the BUY button over and over and over again. When things calm down - if ever - there may be some pullback in stocks, but it will most likely be only temporary. Trump's agenda for American businesses and the economy are clearly headed for more fertile ground, with fewer regulations and government impediments and red tape, which should translate into record after record on the Dow, NASDAQ, S&P, Russell, and NYSE Composite.

That may appear to be a simplistic attitude toward equity investments, but there's little doubt that Trump's policies will be beneficial to almost all businesses, from small farmers to mega-corporations. He's promised a "golden age" and Wall Street will be more than happy to comply.

The week ahead is a very busy week for fourth quarter and full year 2024 earnings reports:

Monday: (before open) SoFi (SOFI), AT&T (T), Ryanair (RYAAY); (after close) Sanmina (SANM), Nucor (NUE), Crane (CR).

Tuesday: (before open) Lockheed Martin (LMT), Synchrony Financial (SYF), JetBlue (JBLU), Boeing (BA), General Motors (GM), Royal Caribbean (RCL), Sysco (SYY), Kimberly-Clark ((KMB); (after close) Logitech (LOGI), SAP (SAP), Chubb (CB), LendingClub (LC).

Wednesday: (before open) Teva Pharmaceuticals (TEVA), Progressive Insurance (PGR), General Dynamics (GD), ADP (ADP), T-Mobile (TMUS), ASML (ASML); (after close) Tesla (TSLA), Meta Platforms (META), Lam Research (LRCX), Microsoft (MSFT).

Thursday: (before open) Caterpillar (CAT), Dow (DOW), MasterCard (MA), Comcast (CMCSA), Nokia (NOK), Southwest Airlines (LUV), UPS (UPS); (after close) Intel (INTC), Apple (AAPL), Visa (V), US Steel (X), Baker Hughes (BKR).

Friday: (before open) Abbvie (ABBV), Chevron (CVX), ExxonMoil (XOM), Colgate-Palmolive (CL), Phillips 66 (PSX), Novartis (NVS), Booze Allen Hamilton (BAH).

The data calendar will be focused on the Fed's FOMC meeting Tuesday, with the policy announcement, press conference and economic projections Wednesday, initial reading on U.S. GDP on Thursday, and the Fed's favorite inflation gauge, core personal consumption expenditures (PCE) price index Friday. Trump's Executive Orders and proclamations from the Oval Office will continue to draw attention away from the usual suspects, though it isn't likely to be at as frenetic a pace as the first week of his presidency. Well, maybe.

Treasury Yield Curve Rates

Date	1 Mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
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
01/17/2025	4.43	4.35	4.34	4.32	4.28	4.21
01/24/2025	4.45	4.36	4.35	4.32	4.25	4.17

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
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
01/17/2025	4.27	4.33	4.42	4.52	4.61	4.91	4.84
01/24/2025	4.27	4.33	4.43	4.53	4.63	4.91	4.85

While President Trump was busy re-shaping America into a form more in line with the intents of the Founding Fathers, bond holders and the Fed were left holding their belts (to put it kindly).

Interest rates hardly budged. The largest move, in fact, was a mere four basis points lower on 1-year notes. The Federal Reserve, whether by presidential design or the mere suggestion that it has outlived its purpose, is going to become increasingly irrelevant as President Trump moves forward with his far-reaching agenda. Already, Trump has publicly implored the Fed to lower rates. Whether they're listening or not will be evidenced by their policy decision this week, on Wednesday, January 29.

Odds are that the Fed stands pat at 4.25-4.50% on the federal funds target rate, though, if Trump's impact hits home, a lowering by 25 basis points may be on the table.

The Fed has to weigh many diverse variables in making their decision. Trump throws a spanner into their wheelhouse. He's unpredictable, though ostensibly, pragmatic. What may unfold, through fiscal austerity on the government's part (yes, it could, and, in fact, is likely to happen) is what looks, smells and feels like a recession, with government workers out on the streets in big numbers.

However, given the mass deportations of illegals, there will be plenty of job openings. Whether laid-off or fired government lazy-bodies can handle dishwashing, crop harvesting, floor mopping, roofing, lawn care, or toilet cleaning remains to be seen. Immigrants, according to reliable sources, took jobs Americans wouldn't do. When unemployment benefits and severance pay begins running out, the former federal paper-pushers may think have to swallow whatever is left of their pride and do menial labor at what would amount to reasonable wages.

Another area that's yet to be explored is what Trump (and, by extension, the Republican-led congress) may do concerning high debt levels, particularly on high-interest credit cards. Could Americans find relief through a re-imposition of usury laws? It's not something the President could do with the stroke of a pen or an Executive Order, though he might try it. A little rollback and pushback against the entrenched financial pirates and their outsized profit centers might just be a further good for the country overall and there's little doubt Trump has it on his radar.

There is also the consideration of mortgage rates falling in the face of what would amount to not necessarily a recession, but a re-ordering of priorities, one of which would clearly be affordability in housing. Whether interest rates decline of their own accord dynamically or by fiat, they're coming down along with food prices, gas prices, taxes, regulations, and just about everything else, except, maybe, wages.

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
1/17: +34
1/24: +36

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
1/17: +41
1/24: +40

Oil/Gas

WTI crude oil prices backed off during the week, from $77.37 at the New York close on January 17, to $74.60 on Friday, abruptly ending four straight weeks of rising price action. As expected, recent oil prices were a reflection of wild speculation and not based on fundamentals. With President Trump pushing for lower oil and gas prices, and imploring energy companies to "drill, baby, drill", prices began to head immediately lower upon inauguration.

With energy independence Trump's stated goal, the other side of that coin makes the U.S. an oil exporter, competing with the Saudis, Russia, and OPEC in world markets. That dynamic alone is eventually going to cause a glut in available product and result in lower prices worldwide. While that may not make the holders of stocks like ExxonMobil or Occidental Petroleum happy, it will produce savings for the mobile consumer, who will be able to put their discretionary funds to work elsewhere and eventually lower the costs for most consumer goods, including food.

The likely ground zero for oil prices is probably around $45-50 per barrel, which, in a relatively stable inflationary (or deflationary) environment should allow producers enough profit margin to remain viable. Even more cost-intensive efforts like fracking, shale, or oil sands will be profitable, if only marginally, due to existing operations, lower input costs, and advancements in technology.

As the Alaskan frontier and offshore platforms are opened up and Green New Deal policies are abandoned, there will be more oil and natural gas, especially when coal mines re-open and coal-fired plants begin to make a comeback. Trump didn't mention "beautiful, clean coal" for nothing. America has an abundance of coal, and Trump plans on using it in his push to re-industrialize the nation.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump down a penny from last week, at $3.12 a gallon Sunday morning. It's about the only thing that hasn't changed radically over the past week, but, considering ongoing policies and oil prices, down, down, down seems to be the direction of prices at the pump.

California continues at the top of the heap, unchanged, at $4.41 a gallon.

Pennsylvania prices jumped three cents, at $3.37, with the Keystone State the price leader in the Northeast. New York saw a slightly smaller change, at $3.16. Connecticut ($3.08) was up slightly while Massachusetts ($3.02) was higher by only a penny. Maryland prices were lower by two cents, at $3.30.

Illinois fell, but only one cent, to $3.25. Ohio ($2.96) and Indiana ($3.01) were both lower and likely headed down further.

Mississippi ($2.64) gave back low price leadership to Oklahoma ($2.62). Following are Texas ($2.68), Louisiana ($2.70), Tennessee ($2.74), Arkansas ($2.76), and Alabama ($2.77). Following those are Kansas ($2.80), South Carolina ($2.84), and Missouri ($2.85). Florida's was up another three cents, at $3.21, Georgia continues to flirt with $3, remaining at $2.95 this weekend.

Sub-$3.00 gas can now be found in only 26 U.S. states, though that number will probably be closer to 40 a month down the road. The Northeast and West coast remain the over-$3.00 holdouts.

Arizona ($3.14) is up eleven cents from two weeks out. Oregon showed prices higher, at $3.51, Nevada at $3.61, and Washington at $3.92, leaving only California above $4.00. Utah ($2.96) and Idaho ($3.01) were stable.

Bitcoin

This week: $105,019.30
Last week: $105,074.80
2 weeks ago: $94,640.44
6 months ago: $67,845.70
One year ago: $43,032.22
Five years ago: $9,903.90

Even as President Trump issued an executive order advancing the interests of crypto-currencies, alt-coins, stable-coins, and everything that goes with it, the order failed to recommend establishment of a cyrpto or bitcoin reserve, as many embracing the crypto universe had been hoping.

Instead, days before Trump officially became president, $TRUMP and $melania tokens were released, much to the dismay of no-coiners Trump enthusiasts. Speculators pounced on both initially before selling off, the subtle message - probably not well-received by the investment community or the diamond-hand hodlers hoping to make millions on their vaporwares - along with an X coin from Elon Musk, that crypto is about as fake as your average three-dollar bill.

Sure, you can cash them in at some places and get a nine-dollar bill for three 3s, but it's still useless. The point being made is that crypto is essentially crap-to, a major worldwide scam, a honey pot for illegal activity, and definitely not a store of value nor medium of exchange.

Did Trump make money off his new coin? Probably. Was it legal? Probably. Was it ethical? Depends on who's almond buttering your avocado toast. Crypto is more likely to be dismantled by the Trump administration as it is to be embraced as a viable alternative to good old cash in U.S. greenbacks.

Time to get over it.

Precious Metals

Gold:Silver Ratio: 89.48; last week: 88.24

Per COMEX continuous contracts:

Gold price 12/27: $2,636.50
Gold price 1/5: $2,652.70
Gold price 1/12: $2,717.40
Gold price 1/19: $2,740.00
Gold price 1/26: $2,777.40

Silver price 12/27: $29.98
Silver price 1/5: $30.10
Silver price 1/12: $31.30
Silver price 1/19: $31.05
Silver price 1/26: $31.04

Gold continued it's upside momentum, while silver made some gains during the week, only to give the bulk of them back as the week drew to a close.

How precious metals will perform with Trump in the White House is probably not going to be as pleasant an experience as under Joe Biden, when Western nations suffered through first a pandemic and then extraodinarily-high rates of inflation. Under Trump, inflation will be tempered by an economy that is growing in different directions, with on-shoring of industrial capacity creating jobs and prosperity. The safety mechanism provided by precious metal investments will not be as pronounced, despite America embarking upon a "golden" age.

Silver, due to its industrial demand, may find better footing overall. Judging by the ridiculous gold-silver ratio reaching close to 90 this week, prospects for silver price appreciation seem good, though market manipulation is likely to continue until regulations are either eased, enforced, or altogether abandoned in favor of price discovery via open markets overseas, not in London, Chicago, or New York, but in places like Dubai, Shanghai, Singapore, Hong Kong, Moscow, Istanbul, and other international money centers.

Fiat currencies remain in a death spiral, though a complete unwinding of a monetary regime can last for decades or even centuries. Gold and silver remain worthwhile long-term holds for safety net purposes and generational wealth, though price appreciation may not be as generous as has been previously afforded. There also exists the possibility of price easing in a dis-inflationary or outright deflationary environment.

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:	36.78	47.90	41.11	40.50
1 oz silver bar:	36.00	49.95	41.40	40.64
1 oz gold coin:	2,851.00	2,998.51	2,911.94	2,908.10
1 oz gold bar:	2,865.00	2,953.97	2,911.19	2,903.39

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell moderately, to $40.91, a drop of $1.00 from the January 19 price of $41.91 per troy ounce.

WEEKEND WRAP

Well, that was a fun week, and, those who are still trying to digest all that happened in the first week of Trump's second presidential term, better get your thinking caps on, because it's not going to slow down much. All of the declarations and proclamations are moving forward at a rapid pace, the deployment and development of policies are going to make everybody dizzy for while.

In the most general sense, America is going to be a better place overall and some trends are going to accelerate. It's worth celebrating the destruction of the mainstream media lying propaganda project, with CBS anchor. Norah O'Donnell calling it quits this week (with cringe-worthy endorsement from Oprah, another person of disinterest and potential disappearance).

Censorship, doxxing, de-monetizing, demonizing, and de-platforming cannot end soon enough. Here's hoping President Trump will have a major impact on the social media front. America needs healing following four years of deep cuts and wounds.

At the Close, Friday, January 24, 2025:
Dow: 44,424.25, -140.82 (-0.32%)
NASDAQ: 19,954.30, -99.38 (-0.50%)
S&P 500: 6,101.24, -17.47 (-0.29%)
NYSE Composite: 19,997.47, +18.69 (+0.09%)

For the Week:
Dow: +936.42 (+2.15%)
NASDAQ: +324.10 (+1.65%)
S&P 500: +104.58 (+1.74%)
NYSE Composite: +390.10 (+1.99%)
Dow Transports: +174.69 (+1.06%)

First Week of Trump's Second Term Appears Positive as He Appears Virtually at World Economic Forum; Stocks Rock; S&P Makes Record

It's been a solid week for stocks, as markets navigated the first week of the second Trump presidency.

Largely devoid of economic data releases, the four-day week, shortened by Martin Luther King Jr. Day on Monday, was devoted to speculating on how Trump and his economic policies would pan out over the coming months and years. The decision was largely a positive one, the major indices posting sizable gains Tuesday through Thursday.

As of Thursday's close, the Dow was up some 1,077 points on the week, the NASDAQ ahead by 423, and the S&P broke through to a new record close, up by 122 points over the three-day span.

Stock market gains the past two weeks broke out of a downtrend that began in December. All of the majors are up on the year, putting a positive spin on future developments, though it's still too early to call the movement a long-term trend. It appears likely that stocks will continue to bound higher despite lofty valuations. The major U.S. stock indices have been in rally mode since late October of 2023, an uptrend that's been in place for more than 14 months.

Unless there's some dramatic shift or world-altering event occurring on Friday, stocks are poised to close out the week giddy over prospects for the U.S. economy.

In a 46-minute presentation Thursday, U.S. President Donald Trump addressed an audience at the World Economic Forum (WEF) and fielded a number of questions from selected panelists.

The tone was extremely cordial, as opposed to the damning, vitriolic rhetoric used to describe Mr. Trump prior to his re-election as president. Apparently, now that Trump has control over the reigns of power, everybody wants to be his friend. It's actually a welcome change, but also somewhat sickening to see the groveling by Euro-centrist promoters who just months ago were pushing climate change, gay and transsexual lifestyles and comparing Trump to Hitler.

What's happened since Trump won the election in November and officially took office on Monday, January 20, is a superficial softening of tones, a rush by elites, billionaires, and leaders of nations to align themselves with the president in hopes that some of his irresistible charisma will rub off on them. It's superficial and disingenuous at best because these same people have been proven over the years to be largely untrustworthy promoters of their own twisted, destructive agendas.

One sees the heads of Google, Amazon, Apple, and Facebook all in attendance at Trump's inauguration. Are people supposed to just forget that these same folks used every technology available to smear, , mislabel, censor, and deride President Trump from the time he began his first campaign in 2015 until he won re-election last year, a decade of underhanded, deceitful, and one may say deplorable misdeeds and dirty politics?

All of a sudden, they're all playing nice. It would be foolish to trust them to do what's right, having done wrong so often, so completely, and so consistently in the past. As with the oligarch class of technocrats, so too the leadership of the EU and most of its nations. It's possible Trump trusts Russia's Vladimir Putin and China's Xi Jinping more completely than he does the likes of Ursula von der Leyen, Emmanuel Macron, or Justin Trudeau.

The unfinished business in Ukraine still needs to be addressed. Trump has intimated that prospects for peace are firmly in Putin's hands, though there's been little to suggest that a ceasefire or peace negotiations are imminent. Russian forces continue to press forward toward the Dnieper river south of Kiev. Control of the Dnieper is paramount as it is the major artery running north to south through the entirety of Ukraine as well as a physical demarkation separating Eastern and Western Ukraine.

Commerce and transit on and around the Dnieper are vital to Ukraine's economy. Russia's intention to control the river and cities adjacent to it is a defining factor in any kind of negotiated settlement to the conflict now approaching three years. Trump has expressed a desire to see the conflict come to an end, but it is a complex matter that will require all sides to make concessions, though Russia holds what amounts to a winning hand.

How the situation in Ukraine is eventually resolved will have long-term effects on world politics for years to come. Leaders in Europe and the UK still have not conceded defeat to the Russians, though it is obvious that they have an upper hand from a military perspective. As events unfold, it's very likely that the desires of European and UK leaders will be swept aside by a peace negotiated between Russia and the United States, mostly on Russian terms.

Trump, a hardened negotiator with decades of experience, knows his position is weak and may possibly concede to Russian demands in order to end the conflict and begin to heal relations between the U.S. and Russia without any input from NATO allies.

With U.S. markets set to open within an hour, Dow futures are down 107 points. NASDAQ and S&P futures are essentially flat. Precious metals bounced higher late Thursday into Friday, with gold reaching within $12 of its all-time high at $2,788. Silver is making up for lost time, currently testing $31.50. The high for the week in silver was $31.68 on Wednesday, so it appears that silver, should it follow gold's move, may end the week at what would amount to the strongest weekend close in more than two months.

Crude oil continues to stubbornly resist tendencies to price lower. After last Friday's close at $77.39, WTI crude dropped to as low as $74.20 late Thursday, but has rebounded Friday morning to just above $75.00. There's good reason to believe that Trump's directive to "drill, baby, drill" will eventually result in lower prices for crude oil, and all refined products, including jet fuels, unleaded gas at the pump, and diesel.

It's been an eventful week, but the lasting effects of new policies and programs coming out of the White House will need time to develop and be digested.

At the Close, Thursday, January 23, 2025:
Dow: 44,565.07, +408.34 (+0.92%)
NASDAQ: 20,053.68, +44.34 (+0.22%)
S&P 500: 6,118.71, +32.34 (+0.53%)
NYSE Composite: 19,978.78, +151.16 (+0.76%)