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

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

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

From the BLS:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The story begins with this:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

FOLIA, FOLIA, FOLIA; Stocks Open Higher, Lose Ground All Afternoon; Indonesia Joins BRICS

Clown world economics.

That's about the only accurate way to describe how the world's major markets function in the 21st century age of high tech, AI, markets tethered to computer algorithmic trading and fake news.

Monday's event was a case in point. One Washington Post story changed everything in every market that was open as of 6:00 am ET, when Jeff Bezos' media spin tool posted the story on the internet.

In the "exclusive" story, Trump aides ready 'universal' tariff plans - with one key change no evidence of veracity was presented other than the usual "unnamed sources."

Here we go, right in the opening paragraph (emphasis ours):

President-elect Donald Trump’s aides are exploring tariff plans that would be applied to every country but only cover critical imports, three people familiar with the matter said — a key shift from his plans during the 2024 presidential campaign.

As the story progressed, no names are given (security, etc. ya know), but the following phrases are taken directly from the text:

the people said
said the people
The people spoke on the condition of anonymity
the people said
some people familiar with the matter said
the people said
one of the people said
The Trump transition declined to comment
Multiple people familiar with the discussions
Liberal and conservative critics say (Who? Liberal and Conservative, wouldn't that be everybody?)
economists of both parties say

As if to add credibility, near the end of the article, WaPo throws this up:

"President Trump has promised tariff policies that protect the American manufacturers and working men and women from the unfair practices of foreign companies and foreign markets," Brian Hughes, a spokesman for the Trump transition team, said in a statement. "As he did in his first term, he will implement economic and trade policies to make life affordable and more prosperous for our nation."

So, the computer algos see this, and begin buying everything. Precisely at the posting of the article, everything, and that means everything shot skyward, including Dow futures, S&P futures, NASDAQ futures, Germany's DAX, England's FTSE, Spain's IBEX, France's CAC, gold, silver, bitcoin, crude oil futures, yen, euros, pounds, even the Aussie and Canadian dollar, as the US dollar fell.

The salient points to be observed here are multi-faceted. First, honest journalism is dead. There was once a time when respected journalists had to name sources. Now, the norm is "unnamed sources" or "sources familiar with". This story, like thousands of others, is nothing more than propaganda and lies. Anybody can say, "Somebody in the White House said bombing XXX is a priority," or otherwise flagrant, audacious Solipsism. These stories should be labeled as not credible, rumors, fabrications, and discarded. Instead, financial markets eat this stuff for breakfast, lunch, and dinner, as spurious as it gets.

Second, and maybe this is the most important, global markets are all coordinated and attuned to media headlines such as these. What that means for every investor not in the multi-million or billion-dollar asset class, is that these markets cannot be trusted. They can turn on a dime or on any story from one of their "respected" sources, like WaPo, NYTimes, ABC, CBS, NBC, BBC, etc.

Third, because of the first two facets of what amounts to nothing other than fraud, markets are corrupted, your money is corrupted, and your financial well-being is out of your control. Your investments could be worth millions one day and next-to-nothing the next, thanks to computers and people you cannot see, feel, smell, or touch.

Clown world may be an easy description for what masquerades these days as financial markets, but it's a whole lot scarier than that.

Worst of all, people who read and comment on the WaPo message board accept the story without reservation as true. The comments are hilarious. Here's a favorite:

"Trump and his people are foolish, idiotic, brainless, dense, dimwitted, imbecilic, senseless, daft, dull, obtuse, thickheaded, asinine, simpleminded, witless, unwise, cloddish, vacuous, mindless, clueless morons."

Nice use of a thesaurus, for all the wrong reasons.

Of course, after the deed had been done, Trump later stated that the Washington Post story is wrong and just another example of fake news.

"The story in the Washington Post, quoting so-called anonymous sources, which don't exist, incorrectly states that my tariff policy will be pared back. That is wrong. The Washington Post knows it's wrong. It's just another example of Fake News," he wrote in a post on Truth Social.

Monday's trading was yet another example of the bear market chart patterns described here last week, up at the open, down in the afternoon.

There's a recession coming, a stock market crash, and all kinds of pain for President-Elect Donald J. Trump and VP DJ Vance, who were certified Monday by the House and Senate as having won the November elections.

The Dow hit a high of 43,115.31, up 383 points, right at noon ET. It didn't end well for those high-flying speculators who are now beginning to suffer the initial pangs of FOLIA (Fear Of Losing It All).

Perhaps the most important global development - on par with the certification of Trump and Vance - on Monday was the announcement of Indonesia becoming the 10th full member of BRICS.

The significance of this cannot be understated, despite Western media hardly noticing and barely reporting, as Indonesia has the largest population in the South Pacific, and is the fourth-most-populated country in the world, at 283,487,931, its addition to the BRICS now dwarfing the population of the countries of Western hegemony, primarily Europe, the U.S., Commonwealth nations, and Japan.

As a counterweight to the U.S. and Europe, BRICS continues to evolve and grow in stature and importance in world affairs. To ignore its existence is akin to denouncing reality. President-elect Trump has already issued statements to the effect that he would impose 100% tariffs on countries trying to replace the dollar in international trade. The Global South covers most of Asia, Africa, South America, and the Pacific Rim. The United States and Europe might find itself largely isolated from countries which produce the bulk of the world’s commodities, including foodstuffs, oil, and other natural resources.

His bluster is likely to fall on deaf ears in the emergent Global South, an amalgam of more than 150 countries which would likely prefer to trade amongst themselves rather than face sanctions and the weaponization of the dollar as reserve currency.

It's important to keep a keen eye on BRICS developments as they are likely to run counter to Trump's trade and tariff policies as his administration takes control of U.S. commerce.

With the cash session minutes away, even in the absence of fake news, stock futures are soaring once again.

At the Close, Monday, January 6, 2025:
Dow: 42,706.56, -25.57 (-0.06%)
NASDAQ: 19,864.98, +243.30 (+1.24%)
S&P 500: 5,975.38, +32.91 (+0.55%)
NYSE Composite: 19,261.42, +7.13 (+0.04%)

WEEKEND WRAP: 2024 Solid Performance In the Books; 2025 Gets off to Rocky Start; Gold, Silver Rebounding; Oil Price Overheating

2024 ended not with a bang, but a wimper, with stocks losing ground over the supposedly automatic "Santa Rally" period from the 23rd through the 31st of December. That lackluster performance carried over into the first trading session of 2025 on Thursday, Janaury 2nd, but the banks and brokerages apparently got the memo to keep the "all good" narrative alive on Friday, as stocks ended a poor week with big gains.

Friday's rally wasn't enough to reverse losses, however. Only the NYSE Composite ended the week with a plus sign. The Dow was down for the fourth time in the last five weeks with the Dow Jones Transportation Average confirming a primary market reversal from bull to bear, also lower four of the last five.

The NASDAQ and S&P indices appear to be content defying gravity and reality for now, their losses marginal over the past month.

With just two trading sessions in the 2025 book, clearly, the market is on uncertain footing. We're just getting started.

Stocks

For an asset manager's perspective, Maximilian McKechnie, JP Morgan's Global Market Strategist, offers a straightforward account of the year just passed and some cool charts in support of his findings.

Morningstar's 2024 in Review and 2025 Market Outlook is also well-presented.

Anybody who hold stocks or was invested in a passive index fund received solid returns in 2024. The NASDAQ led the world (outside of bitcoin), with a gain of 30.8%, while the S&P rallied all year, up 24.0%.

The market is bracing itself for the Trump tsunami, his polies certain to cause some degree of agita in corporate suites and brokerage houses. Good or bad, the government needs fixing badly. Trump, Musk, and Ramaswamy are going to take big swipes at broad swaths of the government bureaucracy. How congress and Wall Street responds will prove impactful to all investors and even lowly citizens.

Treasury Yield Curve Rates

Date	1 Mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
11/29/2024	4.76	4.69	4.58	4.52	4.42	4.30
12/06/2024	4.57	4.50	4.42	4.42	4.34	4.19
12/13/2024	4.43	4.43	4.34	4.36	4.32	4.24
12/20/2024	4.43	4.42	4.34	4.35	4.29	4.27
12/27/2024	4.44	4.43	4.31	4.35	4.29	4.20
01/03/2025	4.44	4.35	4.34	4.31	4.25	4.18

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
11/29/2024	4.13	4.10	4.05	4.10	4.18	4.45	4.36
12/06/2024	4.10	4.05	4.03	4.09	4.15	4.42	4.34
12/13/2024	4.25	4.21	4.25	4.33	4.40	4.69	4.61
12/20/2024	4.30	4.32	4.37	4.45	4.52	4.79	4.72
12/27/2024	4.31	4.36	4.45	4.53	4.62	4.89	4.82
01/03/2025	4.28	4.32	4.41	4.51	4.60	4.88	4.82

The 10-year note went on a roller coaster ride in 2024, starting out in January at 3.95%, peaking in April at 4.70% before falling to a low of 3.63% in mid-September. It spent the final three months defying the Fed's rate cuts, rising to a high of 4.62% on December 27. In effect, while the Fed was busy cutting the federal funds rate by one percent, the 10-year note rebelled, rising by almost the exact same amount. The take-away is clear: fixed income purchasers aren't buying it. The outcome will be exciting as the new year progresses. To see who is wrong-footed - the Fed or the bond vigilantes - will require extra bags of popcorn.

For whatever it's worth, the Fed has nearly achieved an unclenching of the inverted yield curve. There still exists a downslope from 1-month bills all the way out to five-year notes, but a couple more 25 basis point rate cuts early this year should eliminate that problem and iron out the wrinkles. When the flattening of the curve is complete, the Fed may actually be praised for its support of diversity, equity, and inclusion.

Unfortunately, all bonds are not created equal.

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

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

Oil/Gas

WTI crude oil shot up wildly over the holiday, closing at $74.07 Friday, up nearly $4 from last Friday's close at $70.26. There's little explanation for this price movement other than speculation in the futures markets. Nothing in current production levels and consumer demand indicate that the pric of oil should be higher.

Even with this week's bump and the month-long gain that started from December 6 at $67.20, oil prices are still much lower than summer's pricing above $82/barrel. This appears to be nothing more than a response rally, unless there's something the oil barons aren't telling everybody else, which is always a possibility.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump of $3.05 a gallon, up four cents from last week.

California continues to be the price leader, at $4.35 a gallon, still well below prices prevailing during the summer.

Pennsylvania prices were up six cents this week, at $3.27, with the Keystone State continuing as the price leader in the Northeast. New York was unmoved, at $3.10. Connecticut ($3.00) and Massachusetts ($2.99) were slightly lower, while Maryland's price jumped to $3.13, following weeks of sub-$3 prices. Even with the holiday travel boost, prices remain close to 42-month lows.

Illinois dropped a penny to $3.18. Ohio ($3.12) and Indiana ($3.11) were only under $3 for about a week, now rising.

Fuel prices in Oklahoma ($2.50) continue to be the lowest in the nation, despite rising three cents this week. Following are Mississippi ($2.57), Texas ($2.63), Kansas ($2.66), Louisiana ($2.68), and Arkansas ($2.69. Tennessee shows $2.73. Alabama, $2.74, Missouri, $2.74, and South Carolina, $2.75. Florida's is up again, at $3.10, Georgia remains sub-$3 at $2.89.

Sub-$3.00 gas can now be found in less than 28 U.S. states, down from 32 a week ago. The Northeast and West coast remain over-$3.00 holdouts.

Arizona ($3.02) continued its long trend lower, though slower. Oregon checked in at $3.53, Nevada at $3.56, and Washington at $3.87, leaving only California above $4.00. Utah ($3.03) and Idaho ($3.05) remain just above the $3.00 threshold.

Bitcoin

This week: $97,453.01
Last week: $94,597.53
2 weeks ago: $95,712.22
6 months ago: $56,420.53
One year ago: $44,003.69
Five years ago: $8,020.98

With the holidays over, buyers of Bitcoin poured back into cyber-space, lifting Bitcoin's price by nearly $3,000. Speculators - which is all hodlers are, really - remain hopeful of the ridiculous notion that the United States will establish a "Bitcoin Reserve" once President Trump and his minions take control in D.C.

Should such an overtly absurd concept ever become a reality (it won't), the "reserve" would likely be raided by our congressional overlords who can't seem to keep their hands off any financial asset, real, or imagined.

The mindset of bitcoiners is one that envisions a world in which Social Security benefits, EBT cards, government pensions, and a slew of other entitlements would be doled out over the bitcoin blockchain (or some newly-developed CBDC) or settled in Ethereum smart contracts. Granny may have to brush up her computer and smart phone skills for such a dystopian scam, should it ever materialize.

Nonetheless, crypto adherents are all fine with that, these mental midgets slavishly follow any pied piper preaching eternal wealth without working.

Bitcoin, and the entire crypto universe is a fallacy. There's actually nothing supporting a Total Cryptocurrency Market Cap of $3,478,109,967,972 other than nearly-blind faith, FOMO, and greed.

That's OK, for speculators. The rest of the world is still happy using fiat currencies backed by "full faith and credit" of various governments in the U.S., Eurozone, China, Japan, et. al. The human population has been conditioned to believe in myths for centuries. From antiquity to the present day, this is nothing new.

It's in the Bible:

"What has been is what will be, and what has been done is what will be done, and there is nothing new under the sun." - Ecclesiastes 1:9

Precious Metals

Gold:Silver Ratio: 88.13; last week: 87.50

Per COMEX continuous contracts:

Gold price 12/6: $2,654.90
Gold price 12/13: $2,665.90
Gold price 12/20: $2,640.50
Gold price 12/27: $2,636.50
Gold price 1/5: $2,652.70

Silver price 12/6: $31.49
Silver price 12/13: $31.00
Silver price 12/20: $30.08
Silver price 12/27: $29.98
Silver price 1/5: $30.10

Both gold and silver started the new year off with a bang, with gold hitting a high of $2,679.00 on Thursday, the 2nd, and silver as high as $30.33 on Friday, January 3rd. As has been common practice of late, when the dollar and stocks rallied on Friday (a rather ordinary practice, though suspicious), precious metals prices were slashed.

It seems apparent that gold buyers, particularly national central banks and sovereign wealth funds, have not given up on the metal. China has been shoring up reserves of gold at a blistering pace the past two years, and buying copious amounts of gold and silver over the past 10-15 years both through its official channels and by purchases from its citizenry. Russia, forced to diversify reserves out of euros and dollar-denominated investments (T-bills), has amassed an enormous stockpile of gold and recently announced intentions to buy silver in quantity. Both Asian powers continue to accumulate precious metals in deference to the U.S. dollar.

Gauged by activity on eBay and online retailers, individual investors are flush with cash and buying freely, suggestive of an attitude that regards elevated premia are merely a market function and presager of future prices. Nobody is particularly concerned about buying smaller amounts of finished products at $100-150 over spot for gold and anywhere from $5 to $10 over silver spot. The satisfaction of owning an asset with no counter-party risk outside the debt-based monetary regime seems a reward worth the extra cash.

The gold:silver ratio has continued to rise, nearing nosebleed levels. This week's reading of 88.13 keeps silver stackers plunging in for post-holiday purchases. Buying has been robust. Reversion to the mean is an eventuality for all markets. How and when silver becomes priced properly is a function of international commerce, emerging exchanges in BRICS+ countries (China, Russia, UAE, in particular) to rival the COMEX, and supply-demand dynamics. While there seems to be no shortage of gold available in quantity (for now), silver's deficit is a matter of public record, and growing. Beyond the riggers at the COMEX and LBMA, industrial demand has slowed to a snail's pace as global economies continue to sputter.

There will come a reckoning and precious metals' date with destiny to be approaching apace.

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:	30.00	48.88	39.70	40.22
1 oz silver bar:	36.00	48.95	39.50	38.75
1 oz gold coin:	2,740.00	2,837.07	2,788.49	2,789.46
1 oz gold bar:	2,746.85	2,807.53	2,771.61	2,759.85

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell slightly, to $39.54, a loss of 63 cents from the December 29 price of $40.15 per troy ounce.

WEEKEND WRAP

15 days and counting until the Biden years get swept unceremoniously into the dustbin of history.

Look for prices of lots of things - particularly food, gas, housing, and electronics - to come down over the next six months. About a third of all Americans are completely priced out and tapped out. Unless one envisions a depression-era scenario, that is not at all sustainable.

At the Close, Friday, December 27, 2024:
Dow: 42,732.13, +339.86 (+0.80%)
NASDAQ: 19,621.68, +340.88 (+1.77%)
S&P 500: 5,942.47, +73.92 (+1.26%)
NYSE Composite: 19,254.29, +158.88 (+0.83%)

For the Week:
Dow: -260.08 (-0.60%)
NASDAQ: -100.35 (-0.35%)
S&P 500: -28.37 (-0.48%)
NYSE Composite: +15.81 (+0.08%)
Dow Transports: -23.64 (-0.15%)

Ominous Patterns Emerging As Stocks Start Off New Year On Wrong Foot; Gold, Silver, Oil Gain

Bear market patterns have been emerging on the major indices over the past few weeks - specifically, stocks opening strong to the upside only to fall into negative territory later in the day - that indicate a bear market is developing.

That is exactly what occurred on the first day of trading in 2025. The Dow was up nearly 350 points in early trading Thursday, but closed down 151 points. The NASDAQ was up more than 200 points early on, but lost ground throughout the session, closing with a small (-30 points) loss.

The same was true for the S&P, which was up more than 50 points around 10:00 am ET, then fell 50 points into the red, finally rallying late in the day to register a smallish, 13-point loss.

After sprouting solid gains for the first 11 months of 2024, December was a decided departure from the norm, as the major indices were all down for the month, though the high-flying NASDAQ, dominated by the Magnificent 7, was down only marginally.

These patterns have been re-appearing on a regular basis and do not bode well for the "January Effect" which posits that "as goes January, so goes the rest of the year.

Analysts can pound the table as much as thye like about their year-end projections of stock gains, but the evidence thus far is lacking. Stocks remain wildly overvalued and incoming Trump policies and actions by his chief leiutenants will have profound effects on trading once implemented after January 20.

Expect similar results on a regular basis up until the inauguration. After that, stocks could spiral down without much support.

Gold, silver, and oil posted gains on January 2, but precious metals are under pressure leading to the opening bell. As usual, stocks are poised for a higher open by equity futures. Oil continues to push forward for no good reason, topping $73.50 in early trading, the highest since mid-October.

This being the first Friday of the month, normally non-farm payroll results (December) would be posted. Since the date is so close to the beginning of the month and the past two weeks were interrupted by holidays, the slavish BLS obviously needs more time to fudge the numbers.

Tread lightly, and carry a big stick, preferably made of gold or silver (quite heavy).

At the Close, Thursday, January 2, 2025:
Dow: 42,392.27, -151.95 (-0.36%)
NASDAQ: 19,280.79, -30.00 (-0.16%)
S&P 500: 5,868.55, -13.08 (-0.22%)
NYSE Composite: 19,095.42, -1.69 (-0.01%)