WEEKEND WRAP: Chaos at the Capital and Over Capital; Gold Soars as More Pours into US; Stocks Peaked? Treasuries Divergent

Three weeks into the second term of presidency for Donald J. Trump and what have we gotten?

Lots of people fired or quit, agencies being blown apart by DOGE, Democrats in congress running around screaming like somebody just stole their lunch money (Musk and Trump actually did).

Sounds like a WIN-WIN-WIN situation, because 1) wasteful spending, kickbacks, and corruption are being eliminated; 2) the government is downsizing its workforce, saving money, and; 3) Democrats are putting on quite a show for the American public, which is at the same time as entertaining as it is revealing about where all the money went.

Wait until they dig into the Ukraine funding, the Clinton foundation (billions stolen from Haiti), defense contractors. Those will make the USAid slush fund look like chump change, a bad tip, a rounding error.

Can we get the Epstein list and Diddy tapes released? Do you want to see suicides and hangings?

While the government willingly and thankfully self-destructs, Wall Street eyes the situation with a jaundiced eye and begins to question things. The S&P, NASDAQ, and the Dow Jones Transportation Average were down for a second straight week, with the Dow down as well this week after a small positive last week. The NYSE Composite has strung together four straight weekly gains, though the last two combined amounted to just 42 points up, less than 1/4 percent.

Stocks

Pattern recognition is something of an art, though it shouldn't be difficult to spot the changes since early December in the daily drift from morning highs to afternoon lows that have manifested themselves. One longer term pattern worth watching is that of the major indices as compared to those in early 2020, just prior to the big "plandemic" crash engineered by globalist forces.

Back then, the major indices were hitting new highs after an extended bull run that began in December 2018, similar to the current condition off the October 2022 lows. This does not suggest anything other than the patterns and time elements are well-aligned. In February 2020, stocks began to fall, culminating in a huge selloff in stocks, forcing extraordinary interest rate cuts and implementation of emergency programs by the Fed and direct payments to Americans from congress. The end result was massive money creation out of thin air and inflation, the likes of which hadn't been seen since the 1970s.

Considering the degree of chaos being fomented in Washington D.C. by the unraveling of the deep state and all the corruption, kickbacks, and levels of fraud that would make Al Capone jealous, the possibility of a major correction in stocks cannot be dismissed. Coupled with the mysterious on-shoring of massive quantities of gold, there's at least a non-zero possibility that the United States might suffer a constitutional crisis resulting in what would be a happy ending: trials and dismissals of large numbers of congress and elimination of the leeches at the Federal Reserve, a return to honest money issued by the U.S. Treasury at minimal cost (printing).

Wall Street, which prefers its bread buttered on both sides, would probably be against such a disorderly process and signal its displeasure by decisive selling pressure until there's resolution, which could take months if not years. The end result is an impoverished nation setting about rebuilding itself. Golden ages are built with gold, not paper. No matter what happens over the next six to 18 months, risk is ever-present and growing, gnawing away at investor confidence as the financial and political systems are pressured.

In the meantime, stocks and Wall Street will continue whistling past the graves of retail investors. Theshow must go on, as they say. The coming week will be chock-full of earnings reports and important data.

Monday: (before open) McDonald's (MCD), Tower Semicnductor (TSEM), CNA (CNA), Incyte (INCY); (after close) Vertex (VRTX), Lattice Semiconductor (LSCC), Inspire Medical (INSP)

Tuesday: (before open) Humana (HUM), British Petroleum (BP), Coca-Cola (KO), AutoNation (AN), Shopify (SHOP), Marriott (MAR); (after close) Doordash (DASH), Zillow Group (ZG), Lyft (LYFT), Gilead (GILD), Supermircro (SMCI)

Wednesday: (before open) KraftHeinz (KHC), Ryder (R), Barrick Gold (GOLD), Generac (GNRC), CVS Health (CVS), Bigen (BIIB); (after close) Kinross (KGC), Cisco (CSCO), MGM Resorts (MGM), Robinhood (HOOD), Reddit (RDDT)

Thursday: (before open) SONY (SONY), Duke Energy (DUK), Crocs (CROX), John Deere (DE); (after close) Twilio (TWLO), Draft Kings (DKNG), Coinbase (COIN), Roku (ROKU), Wynn Resorts (WYNN), Applied Materials (AMAT), AirB&B (ABNB), Hecla Mining (HL)

Friday: (before open) Enbridge (ENB), Fortis (FTS), AMC Networks (AMCX), Moderna (MRNA).

Data drops will be substantial later in the week, starting with January CPI on Wednesday, and PPI Thursday. January Retail Sales on Friday probably won't cause much of a ruckus unless, of course, they're better than expected, in which case stocks would sell off because Wall Street's tortured logic has returned to a "good news is bad" condition in which economic and/or employment strength translates into further delays on Fed rate cuts (or rate hikes).

As far as CPI and PPI are concerned, analysts have been turning a blind eye to the data, preferring to always and everywhere consider inflation to be already conquered and thus, unimportant, without considering the reality of its persistence or the possibility of continued dis-inflation and recession or worse.

Treasury Yield Curve Rates

Date	1 Mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
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
02/07/2025	4.37	4.38	4.35	4.37	4.30	4.25

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
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
02/07/2025	4.29	4.31	4.34	4.42	4.49	4.75	4.69

Treasuries began to manifest the ongoing confusion and chaos emanating from the nation's capital. With the short end virtually unchanged, a noticeable, structural divergence is evidenced in notes, with a split apparent between three and five year yields. Ones, twos, and threes all increased, but fives, sevens, and 10s went in the opposite direction, resulting in a severe flattening of the entire structure, from the lowest yield of 4.25% on 1-year notes to the high of 4.69% on 30-year bonds for a complete spread of less than one-half percent.

With the Fed and the Trump Treasury department at loggerheads, the result is a tug-of-war-and-will between the two most powerful forces in monetary and fiscal policy. While the Federal Reserve envisions no reason to lower the federal funds target rate at the base of all monetary policy, Trump and newly-installed Treasury Secretary Scott Bessent are taking a fiscal approach to long-term rates.

Bessent recently opined, "If we deregulate the economy, if we get this tax bill done, if we get energy down, then rates will take care of themselves and the dollar will take care of itself." For all appearances, Bessent can not just talk the talk, he is willing to walk the walk.

What the Fed - itself becoming inconsequential and something of an ineffectual mirage in monetary matters - does from here on out is not likely to be as important or influential in markets as what Trump and Treasury propose and perform. It should come as welcome relief to American citizens that their lives are no longer going to be ruled by the dictates of a private banking behemoth which is nearing the end of its useful existence. With Trump commanding markets, policy, and broadly, the economy, the Fed will likely be out of business in a few short years.

Gold isn't rushing to America for no good reason. The United States is rapidly aligning itself with BRICS nations that have been acquiring gold for the better part of the last two decades. In America's rush to catch up, the price of gold will matter much more than the yield on a one-month bill or one-year note.

The effect of this reordering of control over financial markets can be seen quite clearly in the spread on 2s-10s, which dropped dramatically this week, from +36 to +20. When the 10-year note yield falls below 4.00%, which it will, expect the Fed to cry foul and have no choice but to lower the federal funds target rate to 3.75-4.00% or lower, a full fifty basis points from its current level.

This condition of the federal government warring against policies of the Federal Reserve bears close attention going forward as the changes brought about are certain to be monumental.

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
2/7: +20

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
2/7: +32

Oil/Gas

WTI crude oil prices continue to fall, from $77.37 at the New York close on January 17, to $74.60 on January 24, to $73.81 on January 31, and finally to $71.06 at the New York close this Friday. The oil rout has only begun. Prices should continue coming down into the mid-to-low 60s and possibly further.

Energy, priced in dollars, will become cheaper and cheaper should President Trump's policies and deregulation take firm hold of markets.

Prices at the pump have yet to reflect lower input prices, i.e., crude, but they will, shortly. There's usually a lag of roughly a month as old supply is sold off and replaced by newer, cheaper fuel. The switch from winter to summer blends will also keep prices artificially elevated for a short time, but, considering the direction of the trend, almost every state other than Hawaii and California will probably see gas at the pump under $3.00 by May or June.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump up four cents from last week, at $3.11 a gallon Sunday morning.

California continues to lead the way, up sharply from last week, at $4.56, from $4.43 a gallon.

Pennsylvania was stable at $3.36, the Keystone State remaining the price leader in the Northeast. New York is a distant second or third, at $3.15. Connecticut ($3.08) was slightly higher along with Massachusetts ($3.01). Maryland is now the second-priciest in the Northeast ($3.19).

Illinois fell by a penny, to $3.22. Ohio ($3.03) and Indiana ($2.93) were both marginally higher, though the overall trend is headed down further.

Mississippi ($2.63) wrested back the tital of overall low-leader from Oklahoma ($2.71) this week. Following are Texas ($2.68) and Louisiana ($2.70) are now both lower than Oklahoma. Tennessee ($2.73), Alabama ($2.78), and Arkansas ($2.79) come in just pennies lower than Kentucky and Kansas (both, $2.82), and South Carolina ($2.83). Missouri ($2.87) and Georgia ($2.93) follow. Florida's price popped back up a dime, to $3.15.

Sub-$3.00 gas can now be found in fewer states than in prior weeks. At least 24 U.S. states have prices under $3.00, down from more than 28 last week.

Arizona ($3.26) is up another two cents from last week. Oregon showed prices higher, at $3.63, Nevada at $3.69. Washington was up eight cents to $4.00, joining California in the small club of mainland states at $4.00 or higher. Utah ($3.03) was stable, but Idaho ($3.17) was higher by ten cents.

Bitcoin

This week: $96,477.31
Last week: $98,218.74
2 weeks ago: $105,019.30
6 months ago: $60,463.20
One year ago: $47,746.95
Five years ago: $8,531.39

Bitcoin was close to $106,000 on Thursday, January 30, less than two weeks ago. It can't die soon enough. Those hodlers hoping for bitcoin to become part of a U.S. sovereign wealth fund might as well be living in Wonderland along with Alice and the Mad Hatter.

Precious Metals

Gold:Silver Ratio: 89.66; last week: 87.14

Per COMEX continuous contracts:

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
Gold price 2/9: $2,886.10

Silver price 1/12: $31.30
Silver price 1/19: $31.05
Silver price 1/26: $31.04
Silver price 2/2: $32.24
Silver price 2/9: $32.19

Gold soared to another record close on Friday, up $76.80 for the week while silver actually fell a nickel, proving once again the nearly-complete disregard for silver as a monetary metal, at least according to COMEX and the LBMA.

Bemused silver stackers should be reminded that silver remains the measure of U.S. constitutional money despite the many efforts over the years by central bankers, legislators, and other nefarious people to destroy it in its role as the money of gentlemen. Once again, the blatant disregard for silver sets up yet another buying opportunity for true believers. A gold:silver ratio indicates gold in an overbought condition with silver lagging and the obvious investment choice going forward.

There is perhaps something of a buyer's strike or remorse setting in. Silver holders are likely to be less-than-enthusiastic about this most recent slap in the face. Prices on ebay reflect a lull in demand. When silver regains its rightful place as a monetary metal, the price will soar. Some believe triple digits are possible, and they may be on the right track. A gold:silver ratio of even 25 would put silver at $115.44 TODAY. When sanity is eventually restored and fiat currencies dead and buried, silver should command a price commensurate with the historical 12:1 or 16:1 ratio to gold.

The United State constitution mandates that 1 US dollar should equal 371.25 grains of silver, this means that the dollar is defined as containing 0.7734375 troy ounces of silver. If silver was backing our currency, we would be by far the wealthiest nation on Earth by orders of magnitude.

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:	36.00	40.00	38.14	38.06
1 oz silver bar:	37.00	46.95	41.00	40.50
1 oz gold coin:	2,935.00	3,138.40	3,035.46	3,041.23
1 oz gold bar: 2,972.10	3,081.84	3,008.20	2,999.45

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell for a third straight week, to $39.43, a decline of 75 cents from the February 2nd price of $40.18 per troy ounce.

Once more, silver is indicating buyer pushback against high premia. 10-15% should be standard. Besides, with the COMEX continuing to pressure the silver price, why would anybody pay over $40 when spot is $31-32?

WEEKEND WRAP

“You can ignore reality, but you cannot ignore the consequences of ignoring reality.” - Ayn Rand

Enjoy the game. Fearless Rick has posted his pick and the coin flip pick, plus 19 Super Bowl quizzes, popular prop bets, theories and more at IdleGuy.com Sports.

Also, scores and MVPs of every Super Bowl from 1967 to the present.

At the Close, Friday, February 7, 2025:
Dow: 44,303.40, -444.23 (-0.99%)
NASDAQ: 19,523.40, -268.59 (-1.36%)
S&P 500: 6,025.99, -57.58 (-0.95%)
NYSE Composite: 20,039.48, -118.10 (-0.59%)

For the Week:
Dow: -241.26 (-0.54%)
NASDAQ: -104.04 (-0.53%)
S&P 500: -14.54 (-0.24%)
NYSE Composite: +40.66 (+0.20%)
Dow Transports: -159.65 (-0.98%)

January Jobs +143,000, November, December 2024 Revised Higher; Amazon Flops; Big Football Game Sunday

Beyond the Washington D.C. DOGE spectacle, protesting Democrats, laysuits flying in every direction, Friday morning's January Non-farm Payroll report takes precedence over everything, at least for a few hours.

The ever-reliable BLS reports this morning that the U.S. economy created 143,000 jobs in January, less than estimated (160,000), but still solid, with the unemployment rate falling to 4.0%. The number was lower than last January's 166,000, but the numbers under Biden are hardly believable. November was revised up by 49,000, from +212,000 to +261,000, and the change for December was revised up by 51,000, from +256,000 to +307,000. With these revisions, employment in November and December combined is 100,000 higher than previously reported. (My, oh, my, what accuracy! Only 23% and 20% off, respectively.)

This report isn't exactly what Wall Street wanted. The cumulative desire among the speculating class is for cratering employment figures, so that the Federal Reserve will have cause to lower the federal funds rate, making it less expensive for corporate execs to borrow money to repurchase shares of their companies. That's how money is made these days, other than, well, getting $7 million in subscriptions from the government, like Politico.

Whether any of these numbers matter much is a good question, given that there are likely to be thousands and thousands of government employees hitting the bricks in months ahead.

Moving on, the other headline this morning is Amazon earnings, which came in above estimates, though growth in AI-related services wasn't as expected, so it's trending lower Friday morning by about three percent.

Thus far, the week has gone well. Through Thursday's close, the Dow is ahead by 203 points, the NASDAQ is up 164, and the S&P shows a gain of 22 points.

Stock futures bounced around a bit after the jobs report release, but other than Dow futures up 35 points with a half hour to the opening bell, the NASDAQ and S&P futures are flat. Gold and silver are bid, slightly. WTI crude oil is at $71.02.

There is some kind of big football game this Sunday. The NFL prohibits commercial use of the term "Super Bowl", so you didn't see that. Maybe call it the NFL Championship? In any case, Fearless Rick has thoughts, theories, Taylor Swift, and picks over at IdleGuy.com Sports.

Enjoy the show, the game, the weirdness all around. Take Monday off. The day after big football games should be national holidays. Maybe Elon Musk can have Presidents' Day moved up a week or so in the name of efficiency, or, make every Monday from September through March (lest we forget March Madness) a mandatory day off without pay. Most federal employees take Mondays off anyhow.

Have a Happy!

At the Close, Thursday, February 6, 2025:
Dow: 44,747.63, -125.65 (-0.28%)
NASDAQ: 19,791.99, +99.66 (+0.51%)
S&P 500: 6,083.57, +22.09 (+0.36%)
NYSE Composite: 20,157.58, +28.69 (+0.14%)

Stocks Continue Push Toward All-Time Highs; Gold Rocketing Higher Every Day; Trump, Musk, DOGE Continue Downsizing Government

At the rate Elon Musk and his merry band of disruptors at DOGE are going, the federal budget will be balanced next year.

That may sound like hyperbole, but the reality is that the corruption, fraud, and waste in Washington D.C. is so extensive and well-ingrained into every agency and department that cutting out $1.7 trillion might not be all that difficult. And then, there's clawbacks to consider. And, department closures, buyouts, lower employee headcount.

DOGE is currently inside the offices of the Medicare/Medicaid complex, which accounts for 22% of federal spending, some $1.5 trillion. It's a safe bet that between overpaid staff, fraudulent payments, and associated graft, there will be $500 billion cut right out of the heart of the nation's welfare health system.

When DOGE gets around to the Pentagon, Department of Defense and the other agencies that have been throwing away or giving to special interests and friends billions in taxpayer dollars for the last 40 years, the amounts will stagger the imagination. Americans will likely be calling for the heads of House members and Senators who were all too eager to play along.

It's great entertainment and very satisfying for the American public, but there should be rage that it's gone on for so long. Thanks to President Trump and Elon Musk, the days of handouts, carve-outs, hush money, kickbacks, lobbyists writing bills, and corruption are OVER.

By the middle of summer, heads will be rolling. Congresspeople, lobbyists, corporate types, and high-level government operatives will be getting their passports updated, shredding documents, closing bank accounts. Assuredly, a lot of that is already happening.

In the end, there's going to be a big void in the budget and at least as big a hole in GDP, since government spending accounts for about 40%. The effect on stocks is probably going to be negative, but by how much, nobody is really certain.

For now, Wall Street is content to just accept the carnage as collateral damage and keep pushing stocks higher. The major indices are closing in on all-time highs again.

On the other hand, gold continues to set new highs, day after day. Earlier this morning, gold touched $2,894 on the COMEX. $3,000 within months looks like a done deal. Silver continues to lag, despite widespread reports of shortages. It's trading on the COMEX around $32.50 this morning, but charts indicate a major breakout within months if not weeks.

WTI crude oil is reeling. It hit a low of $70.84 on Tuesday, but has rebounded somewhat, back above $71/barrel.

Enjoy the show.

At the Close, Wednesday, February 5, 2025:
Dow: 44,873.28, +317.24 (+0.71%)
NASDAQ: 19,692.33, +38.31 (+0.19%)
S&P 500: 6,061.48, +23.60 (+0.39%)
NYSE Composite: 20,128.89, +164.29 (+0.82%)

Market Bullishness, Complacency May Lead to Missing Bigger Picture; Trump Administration Turning World Upside Down

With stocks remaining close to all-time highs - within 2-4% currently - there's a tendency in human nature to become complacent. It's when everything seems to be going well that something seemingly coming out of nowhere becomes a cause of grief and panic.

Today's post will examine some of the looming issues that may have profound effects on stock performance in the short, medium, and long term, but mostly, these projections will look at the next six to 18 months, or, until about the middle (June, July) or 2026.

First, however, a few companies that reported earnings Tuesday and Wednesday, prior to the open, should be examined.

Estee Lauder (EL) was rocked on Tuesday, down 16% after reporting its fiscal second quarter 2025 earnings. Adjusted earnings of 62 cents per share beat most estimates (which are adjusted lower all the time), but the bottom line was down 29% from earnings of 88 cents in the year-ago quarter. Gross revenue was also down year-on-year. This is a huge consumer outfit, and it's forecasting slower and lower for the next quarter and beyond.

This company is, and has been, in big trouble for the past three years, though one would hardly know it given the lack of reporting by the financial media. Shares of EL hit a high on December 31, 2021, of 370. Tuesday it closed at 69.47, representing an 80% loss. But, that's not a problem, because (sarcasm warning) bitcoin fixes that or "muh, AI." EL's price/earnings ratio is somewhere in the stratosphere. Nobody's buying it.

This is a recurring theme that Money Daily has been reporting on for months. Companies beat estimates, stock is rated a buy by analysts, Wall Street coos happily, but, underneath the hood, revenue and profit are down from the same period a year ago. Wall Street and the financial press are famous for whistling past graves, mostly those of unsuspecting retail investors, people with their life savings tied up in 401k, IRA, and other retirement-type vehicles.

The most prominent company that reported Tuesday was Alphabet (GOOG), parent of Google, Youtube, et. al. The company, from all outward appearances, had a solid quarter, beating top and bottom line. So, why is the stock down seven percent pre-market? Maybe AI can tell us? Probably not, though the company announced it was planning to spend $75 billion building out its AI architecture. Maybe that's a bit much.

Advanced Micro Devices (AMD) reported Tuesday post-close, and the stock got hit by as much as a nine percent decline. With Wednesday's opening bell less than an hour ahead, it's still down seven percent. AMD is a chip-maker, caught up in the whole AI trend, but they're a competitor to Nvidia, and they're losing the war.

Analysts have cut their price targets on the stock, down to around a consensus of 140. Ha, ha, the stock is going to open around 107 or 108 and nobody's buying. These analysts are so optimistic, like stocks never go down. Sure, buy the dip, dips--ts.

One company that usually reports rosy earnings is Chipolte Mexican Grill (CMG), and they did so again Tuesday night. So, why is the stock down five percent pre-market? Why does this question keep re-appearing company after company? A good question, and anybody with a good answer is probably preparing to short everything in sight, because, usually, when companies beat expectations but then sell off, the next thing you know is they're losing money the next quarter or, at least not making enough to keep investors happy.

And then you end up living on the street in a box. (just thought that should be thrown in)

Next up, Disney (DIS), which beat estimates and is only down less than one percent. Should anybody buy Disney stock? Seems a safe bet, maybe. At least they're not involved in spending billions on AI infrastructure. But, the stock is down from a high of 197 in March, 2021, to 113 as of Tuesday's close. Streaming? Mickey Mouse? Theme Parks? Maybe a pass on putting much money into this still-somewhat-WOKE company. Prospects are not without risk. Next!

Thought there might be a winner in Stanley Black & Decker (SWK). However, even though the company did well, shares are being pummeled prior to the open, down more than four percent.

Earnings: $194.9 million in Q4 vs. -$304.4 million in the same period last year. EPS: $1.28 in Q4 vs. -$2.03 in the same period last year. Excluding items, Stanley Black & Decker, Inc. reported adjusted earnings of $226.0 million or $1.49 per share for the period.

Those are solid numbers. Something is not adding up.

Last, Uber (UBER). Ooops, sorry. Here's a cross-section of headlines on the company's earnings: Strongest quarter ever, operating income well short of estimates, earnings, gross bookings outlook disappointing.

Well, shares are only down six percent heading toward the open.

Here's why all these stocks are falling and people are beginning to be a little less optimistic about future prospects, and this is only the short list:

• Stocks are generally overpriced and have been for quite a while.
• President Trump is upsetting the apple cart in Washington D.C. and around the world.
• Elon Musk is exposing the extreme levels of theft and corruption in the U.S. congress. Some House members and Senators may be looking at a choice of options ranging from jail time, to extensive investigations, to retirement. It's very serious and everybody knows it.

Wall Street doesn't like uncertainty, and President Trump is bringing buckets-full of it. He and his henchmen in the cabinet are going to gut the government, end the handouts, bribes, kickbacks, and generally destroy the "go along to get along" good buddy system in congress, which is where the evil has been for a long time. The last four years may have been the worst of it, but the corruption goes back at least fourty.

Considering that the U.S. government is $36 trillion in debt, most of it squandered lining the pockets of legislators and campaign contributors, it might occur to President Trump that the American people shouldn't be saddled with that kind of debt.

What could Trump do? Default on some, maybe, but more likely re-negotiate. Instead of paying 3 or 4 percent interest, he may want that cut to one or 1.25%, helping the American public by lowering the cost of borrowing. Additionally, once the President and his people are done tearing the heart out of official Washington, the unemployment rate is going to be around six or seven percent, and all those government bureaucrats can start life over again as roofers, construction workers, fast food employees or crop pickers. It's not going to be easy, or pretty, but, one thing it is is NECESSARY.

The rot and corruption needs to be completely wrung out of the system to enable a proper new beginning. There will be a deep recession, but it's likely to be short. And, inflation? Don't worry about that. Prices are about to come down hard on food, energy, and housing, because there isn't going to be much in the way of demand and there's plenty of supply in food and gas, and yes, even housing, if regulations are lifted and zoning laws gutted.

This is why stocks are beating street estimates but losing ground. The world is being turned upside down, and, while it's a good thing and necessary, it does not come without an inordinate share of bumps and bruises along the way.

Good luck.

At the Close, Tuesday, February 4, 2025:
Dow: 44,556.04, +134.13 (+0.30%)
NASDAQ: 19,654.02, +262.06 (+1.35%)
S&P 500: 6,037.88, +43.31 (+0.72%)
NYSE Composite: 19,964.61, +94.28 (+0.47%)

Markets That Respond in Real Time to Geo-Political Events are Dangerously Clinging to Prior False Narratives

The world needed Donald J. Trump in the White House so badly. The need was palpable. Now, we’re beginning to see why.

Monday's market response to his tariff threats against Mexico and Canada were, in a sickeningly cynical manner, hilarious.

First, the futures markets sent stocks skidding lower, which extended into the opening hour of the cash session. When Mexico's president, Claudia Sheinbaum, agreed to send military troops to the Southern border and crack down on border crossings and trafficking of humans and drugs into the United States in exchange for a month's reprieve on imposition of the tariffs, markets were relieved.

Stocks jumped.

Later in the session, ineffectual Canadian Prime Minister Justin Trudeau agreed to similar terms, markets shrugged and moved on, still with a sense of doubt and uncertainty, finishing lower, though only slightly.

What happened to USAid offices over the weekend and into Monday morning, with Elon Musk and his merry bank of DOGE staffers diving headlong into slush fund records and oceans of graft and corruption, is a sign of things to come. While USAid was likely the major conduit of hush money and payoffs to congressional grifters, other departments will be found to be similarly weak and dishonest about their expenses.

Just wait until DOGE begins to examine the Defense Department. That's when the real bombs - truth bombs - go off.

As for markets that react like Pavlovian dogs to Washington's whistles, it's all been done before. Rich valuations, the product of too much hype, hope, and speculation, always end up in a dumpster fire of despair.

It's worth noting that President Trump, who hailed stock market performance in his first go-round as President, hasn't but once mentioned Wall Street antics or praised their gains or leadership.

All of the tech billionaires - Bezos, Zuckerberg, Ellison, et. al. - bestowed riches on the Trump inauguration and were prominent in attendance. They don't care about stock prices or whether they're worth $100 billion or $50 billion or even $25 billion on paper. They have power, access, and, so long as they toe the line and kiss the ring, they'll be just fine, thank you.

Markets at nose-bleed levels and valuations that would make Michael Milken blush are more the product of slick salesmanship and the greed of passive investors. The baby-boomers, millennials, and tag-alongs from generations X, Y, and Z, will never see what's coming, even though it's staring them in the face.

In the meantime, party on. While there may not be much more in terms of upside for the general markets, there's still ample time to get out of Dodge before the sheriff, tariffs, and the Man from DOGE show up.

At the Close, Monday, February 3, 2025:
Dow: 44,421.91, -122.75 (-0.28%)
NASDAQ: 19,391.96, -235.49 (-1.20%)
S&P 500: 5,994.57, -45.96 (-0.76%)
NYSE Composite: 19,870.33, -128.50 (-0.64%)