Here's the kicker. With the Trump administration steadfast in its efforts to arrest, detain, and repatriate (deport) illegal migrants, there will be fewer useless eaters and "undocumented persons" buying anything. Trump is also cutting off funds to the NGOs which passed out money, assistance, food stamps, and all manner of grift to illegals, which should turn out to be dis-inflationary if not outright deflationary. Any price hikes due to tariffs should, over time, be offset by decreased demand. Once Trump's immigration czar, Tom Homan, has deported a few million illegals, supply-demand will correct toward lower demand in the face of potentially less supply, the net result being minimal in terms of prices.
The process is likely to take time. Relieving the country of millions of takers is not going to happen overnight, but, in the long run, it is best for the U.S. economy to be built upon the shoulders and labor of actual citizens, not imposters. Already, reports are emerging of illegals staging mass protests in cities across America, though the mainstream media is, as usual, negligent in reporting on any anti-immigrant activity. There are also contractors and small businesses who are suffering slowdowns due to lack of (illegal immigrant) labor, essentially in roofing, construction, farming, food processing, landscaping, housekeeping, service, and other menial jobs that are generally the province of illegals.
Changes in the makeup of America's population are going to be radically realigned over the next four years. Expect the U.S. population to shrink by as much as eight to 10 million adults and another two to three million children. Americans have had their fill of illegals draining resources meant for American citizens. Restoring balance and righteousness is at the core of Trump's America First policies.
Long story short, disruptions in employment, retail, and consumption will be a feature, not a bug, for the next six to 18 months, and may result in a short, and possibly deep recession. By summer of 2026, most of the criminal elements of the cartels will have been dealt with, and well over three million people will have been deported. Jobs that "American's cant or won't do" will ultimately pay more, providing opportunities for people who actually want to work and be paid for their labor.
Should the plans afoot by President Trump and Elon Musk's DODE come to fruition, temporary disruptions are likely to be ofset with positive gains in employment of Americans at competitive wages. Dealing with import prices will be a longer journey that involves re-shoring of manufacturing and production to the United State. Policy changes and regulatory relief will usher in an era of prosperity with limited inflationary pressure. More money will circulate within America's borders by Americans buying American-made goods and services. The U.S. economy will emerge as a domestic mercantilistic construct that serves its citizens properly.
Stocks
Friday's stock market rout may prove to be significant as the first week of February commences. While the major indices showed a positive "January Effect" (the idea that as goes January, so goes the rest of the year), shakiness in tech and energy appear to be pointing in another direction. Dow Theorists (are there any left?) will take note of confirmation by the Dow Jones Transportation Average of the primary trend reversal begun back in December, when the Industrials were sent to the woodshed on 11 consecutive sessions.
Beginning on December 1, the Trannies dropped 13 of 14 sessions, bouncing off two-month lows to regain some momentum with the Dow Industrials' January sugar rush. Vastly underperforming the Industrials, the Trannies may now be in the leadership position. It would be worthwhile to watch both averages for correlations, because they are currently sending a strong sell signal. Investors were piling out of techs and into the Dow and their relatively higher dividend-paying issues, seeking shelter from the storm that is brewing in international markets as tariffs and taxes begin to take their tolls.
NASDAQ is struggling to stay above its 50-day moving average. Tech tocks were battered by China's DeepSeek open source AI model, which blew apart some of big tech's subscription revenue forecasts and made heavy investments in chips and energy infrastructure appear to be less-than-optimal use of funds. Bull market bubbles are typified by mal-investment - a term that's become obsolete in the current financial jargon - and tech hustling into mass capital injections is beginning to look like text-book application. Hype is one thing. False promises, based on false premises, is the stuff of market crashes.
Adding in the Trump/Musk effect and the current dismantling of the deep state, geo-political turmoil, and mass arrests and deportations of illegals from the U.S. mainland makes for a very unsettled environment, just the condition Wall Street abhors.
The week ahead will be not quite as busy as last week for fourth quarter and full year 2024 earnings reports, with the focus on Alphabet, parent of Google (GOOG), Amazon (AMZN), Disney (DIS), Pfizer (PFE), Merck (MRK), PayPal (PYPL), and Palantir (PLTR).
Monday: (before open) Tyson (TSN), Kyocera (KYOCY); (after close) Rambus (RMBS), Clorox (CLX), Palantir (PLTR)
Tuesday: (before open) Merck (MRK), Estee Lauder (EL), Pfizer (PFE), Spotify (SPOT), PayPal (PYPL), Pepsico (PEP); (after close) AMD (AMD), Snap (SNAP), Amgen (AMGN), Prudential (PRU), Chipolte Mexican Grill (CMG), Alphabet (GOOG), Electronic Arts (EA)
Wednesday: (before open) Toyota (TM), Stanley Black & Decker (SWK), Johnson Controls (JCI), Uber (UBER), Disney (DIS); (after close) Ford (F), MetLife (MET), ARM (ARM), AMSC (AMSC), O'Reilly Auto Parts (ORLY), Qualcomm (QCOM)
Thursday: (before open) Roblox (RBLX), Hershey (HSY), Bristol Myers Squibb (BMY), Yum Brands (YUM), Lilly (LLY), Peloton (PTON), ConocoPhillips (COP); (after close) Cloudfare (NET), Amazon (AMZN), Pinterest (PINS),
Friday: (before open) Avantar (AVTR), Canopy Growth (CGC), CBOE (CBOE).
The data calendar is not substantial until later in the week, highlighted by January Retail Sales on Thursday, and the January Non-farm Payroll report on Friday. Wednesday's ADP private sector jobs report should give a sneak peek at Friday's NFP, expected to be a clunker, with estimated centered around 160,000 or whatever the first NFP report for the Trump administration can dream up.
Friday also sees the University of Michigan's consumer sentiment survey results.
Treasury Yield Curve Rates
| Date | 1 Mo | 2 Mo | 3 Mo | 4 Mo | 6 Mo | 1 Yr |
| 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 |
| 01/31/2025 | 4.37 | 4.37 | 4.31 | 4.33 | 4.28 | 4.17 |
| Date | 2 Yr | 3 Yr | 5 Yr | 7 Yr | 10 Yr | 20 Yr | 30 Yr |
| 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 |
| 01/31/2025 | 4.22 | 4.27 | 4.36 | 4.47 | 4.58 | 4.88 | 4.83 |
For the second straight week, treasuries were relatively well-behaved, with the majority of bills, notes, and bonds slipping slightly, thanks, not to the FOMC and the Fed, but to bond buyers seeking and finding value in fixed income.
Notably, despite the Fed's reluctance to lower the federal funds target rate, 30-day bills droppd eight basis points, a reflection of increasing interest on the short end of the curve. Yields on all notes dropped slightly, losing five to seven basis points over the course of the week. The curve continues to flatten, with spreads diminishing or remaining on hold. 2s-10s have stabilized at +36. 30-day/30-year full spectrum is a match at +36, down four basis points from last week.
As was evidenced on Wednesday, FOMC meetings and the Fed in general are increasingly becoming less and less consequential. The economy doesn't run on interest rates alone and the era of investors hanging on every syllable coming out of a Federal Reserve official's mouth is coming to a happy ending. With a yield curve ultimately up-sloping from around 3.50-3.75 to 4.75-5.00, the nature and importance of treasury rates will become more matter-of-fact than a parlor game played by the ultra-rich and connected and more a reflection of a stabilized U.S. economy focused on prosperity and growth rather than greed and gamesmanship.
As the Fed diminishes in importance as it gradually lowers the federal funds target rate, normalization will provide a solid foundation for a better economy. Lending rates between 3.5% and 6.0% (mortgages) will become normative and the Fed's actions will become more of an afterthought than a primary consideration. America's debt burden, from consumers, to businesses, to governments needs to be put in order, a process that necessarily won't happen overnight.
Expect the Fed to keep interest rates on hold at least until June or July and possibly even September unless some exogenous event changes the economic landscape in a significant way, such as a serious recession, which remains likely, but should eventually be sharp and short-lived. A longer term view sees the federal funds target rate at around 3.50% by mid-2026, implying three more cuts of 0.25%. Inflation will cease to be a concern of the Fed and more a priority on the fiscal side.
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
1/31: +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
1/31: +36
Oil/Gas
WTI crude oil prices backed off again during the week, from $77.37 at the New York close on January 17, to $74.60 on January 24, to Friday's artificially-inflated finish at $73.81. The sudden jerk higher from a low of $72.00 was likely the result of speculation over Trump's imposition of tariffs on China, Mexico, and Canada. With a 10% hike on energy imports from Canada, there's little to no upside pressure on oil prices outside of the usual speculative gaming. Oil prices continue to decline, and should eventually find a quiet resting place in the range of $55-65 over time, possibly lower, though prices around $45-50 would be indicative of recession, if not outright deflation.
There's a possibility of global slowing due to tariffs and trade imbalances being seriously confronted. America, Russia, parts of Africa and South America have little to worry about from lower fuel prices, In fact, cheap energy in abundance produces prosperity. See America in the 1950s and 1960s and present-day Russia for reference.
Those countries dependent on energy imports, including the giant economies of India and China, may suffer short term from energy disruptions, but eventually, cheaper crude will flow to them as well, all of this making for a dis-inflationary environment globally under a peaceful co-existence sponsored by the leaders of the "Big Four", Russia, China, India, and the United States.
Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump down a nickel from last week, at $3.07 a gallon Sunday morning. People who are touting inflation under Trump's watch are going to be proven serially incorrect. Prices have stabilized and a coming down, despite the fear-mongering in the financial press that predicts gas prices to rise by as much as 70 cents a gallon. Please avoid listening to TV morons spouting off on subjects they know nothing about, like economics.
California continues to lead the way, up a few cents from last week, at $4.43 a gallon.
Pennsylvania prices dropped to $3.35, with the Keystone State the price leader in the Northeast. New York saw a slightly smaller change, at $3.14. Connecticut ($3.07) was slightly lower while Massachusetts ($3.00) declined two cents. Maryland prices were lower by a dime, at $3.20.
Illinois fell two cents, to $3.23. Ohio ($2.85) and Indiana ($2.94) were both significantly lower and likely headed down further.
Mississippi and Oklahoma ($2.64) continue to vie for the low-price crown. Following are Texas ($2.67), Louisiana and Arkansas ($2.72). South Carolina slipped to $2.73, ahead of Kentucky ($2.76), Alabama ($2.78) and Tennessee ($2.79). Kansas ($2.82), Missouri ($2.88) and Georgia ($2.91) follow. Florida's price drop was dramatic, to $3.05, after $3.21 last week.
Sub-$3.00 gas can now be found in at least 28 U.S. states, though that number will likely increase to more than 40 in months ahead, despite summer "driving" season. The Northeast and West coast remain over-$3.00 holdouts.
Arizona ($3.24) is up another ten cents from last week. Oregon showed prices higher, at $3.52, Nevada at $3.62, and Washington at $3.92, leaving only California above $4.00. Utah ($3.03) and Idaho ($3.07) were higher, as were all Western states.
Bitcoin
This week: $98,218.74
Last week: $105,019.30
2 weeks ago: $105,074.80
6 months ago: $61,732.21
One year ago: $43,004.49
Five years ago: $9,895.13
Bitcoin was close to $106,000 on Thursday. It's shed more than $7,000 into Sunday morning. It's such an obvious scam. Bitcoin, as well as all other crypto-frauds are not stores of value, nor are they reliable media of exchange. They facilitate nothing more than cover for hiding off-balance sheet bank assets and criminal activity (same thing).
The crash to zero can't come soon enough. 16 years of grifting is more than enough.
Precious Metals
Gold:Silver Ratio: 87.14; last week: 89.48
Per COMEX continuous contracts:
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
Gold price 2/2: $2,809.30
Silver price 1/5: $30.10
Silver price 1/12: $31.30
Silver price 1/19: $31.05
Silver price 1/26: $31.04
Silver price 2/2: $32.24
Gold set a new all-time record on the Comex this week, checking in at $2838.00 on Friday before the usual cram-down by the LBMA and Comex riggers sent it to a close almost $30 lower. Silver was up on the week, substantially. Expect both to continue accelerating to the upside. Consider any knockdowns a gift. You know what to do.
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 | 43.95 | 39.32 | 39.34 |
| 1 oz silver bar: | 39.00 | 45.46 | 41.31 | 40.50 |
| 1 oz gold coin: | 2,853.00 | 3,037.93 | 2,947.72 | 2,945.88 |
| 1 oz gold bar: | 2,875.00 | 3,003.79 | 2,937.86 | 2,934.70 |
The Single Ounce Silver Market Price Benchmark (SOSMPB) fell moderately, to $40.18, a drop of 73 cents from the January 19 price of $40.91 per troy ounce.
This may indicate some buyer pushback against high premia. 10-15% should be standard.
WEEKEND WRAP
Carry on.
At the Close, Friday, January 24, 2025:
Dow: 44,544.66, -337.47 (-0.75%)
NASDAQ: 19,627.44, -54.31 (-0.28%)
S&P 500: 6,040.53, -30.64 (-0.50%)
NYSE Composite: 19,998.82, -167.40 (-0.83%)
For the Week:
Dow: +120.41 (+0.27%)
NASDAQ: -326.86 (-1.64%)
S&P 500: -60.71 (-1.00)
NYSE Composite: +1.35 (+0.01%)
Dow Transports: -299.11 (-1.80%)
Late in the session, President Trump - and, mind you, Money Daily is of the opinion that he's great - was making his case for tariffs on China, Canada, and Mexico, reiterating that the tariffs will begin on February 1st (Saturday). Well, the computers that run 85-90% of the trading on the various indices, didn't like it very much, and, about 3:30 pm ET, the whole market began selling off, severely. The Dow, shown at right, was up about 250 points. 15 minutes later it was actually in the red. The NASDAQ and S&P did the same.
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...
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