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%)
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