Money Daily

Sunday, May 18, 2025

WEEKEND WRAP: Stocks Explode Higher; Gold Continues Decline; Treasury Market Stressed on Moody's Downgrade; Bitcoin Stalls

Owning stocks over the past few months proved that it pays not to panic. Major averages are back to about even for the year after torrid trading to the upside in four of the last six weeks. Shorts have been, as it's said, carried out on stretchers, the negative point of view replaced by giddy acceptance of the new narrative inspired by President Trump and his deal-making travels throughout the Middle East.

Who knew reshaping the nature of global commerce could be accomplished in less than six months?

Stocks

The gains on major indices were outlandish, especially on the NASDAQ (+7.15%), outdone by the Dow Transports, which were up 1119.01 (+7.97%) on the week. Over the past month, stocks have moved from well below their 50 and 200-day moving averages to just above them on the Dow, S&P, NASDAQ, and NYSE Composite. Only the moribund Dow Transports are still slumping, but, if this week signaled that investors simply will not tolerate bear markets for more than a few weeks, then expect the transportation sector to continue rallying.

At the current pace, stocks should be challenging all-time highs within weeks. At least, that's how it appears to be going. Only congress (not to mention the horde of activist federal judges), in its own sad manner, seems capable of derailing the Trump agenda for a "golden age." The House Budget Committee failed to move Trump's preferred "big, beautiful bill" to a full vote, with five Republicans joining all 16 Democrats on the committee, defeating it in a 21-16 defeat for the MAGA crowd.

The bill has more than its share of lumps, from outsized budgetary funding for defense to cuts in social programs. It's far less than perfect and will need tweaking and probably some arm-twisting. Congress seems capable of and perfectly happy to keep with its habit of overspending and working with continuing resolutions rather than passing an actual budget. If anything can torpedo positive momentum on Wall Street, congress is surely equal to the task.

Otherwise, it's not just Trump making deals. The big news this week was Dick's Sporting Goods acquiring Foot Locker, the deal expected to close in the second half. The merger agreement was unanimously approved by the boards of directors of both companies. Foot Locker shareholders can opt for either $24 in cash or 0.1168 shares of Dick’s common stock for each share of Foot Locker common stock, the companies said in a statement.

The stream of first quarter earnings has become but a trikle, with Home Depot, Lowe's and Target the major companies reporting this week. Here's the rundown:

Monday: (before open) Ryanair (RYAAY), Compugen (CGEN); (after close) Trip.com (TCOM)

Tuesday: (before open) Viking Cruise Lines (VIK), Home Depot (BD); (after close) Palo Alto (PANW), Viasat (VSAT), Toll Brothers (TOL)

Wednesday: (before open) Baidu (BIDU), Medtronic (MDT), Lowe's (LOW), Target (TGT); (after close) Urban Outfitters (URBN), American Superconductor (AMSC)

Thursday: (before open) Advance Auto Parts (AAP), BJ's Wholesale (BJ), Analog Devices (ADI), Ralph Lauren (RL), TD Bank (TD), Williams-Sonoma (WSM); (after close) Autodesk (ADSK), Workday (WDAY), Ross Stores (ROST), Lionsgate (LION), Intuit (INTU), Deckers (DECK).

Data is on the light side this coming week, with April new and existing home sales likely to be the most impactful release.

Treasury Yield Curve Rates

Date	1 Mo	1.5 mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
04/11/2025	4.37	4.35	4.38	4.34	4.35	4.21	4.04
04/17/2025	4.36	4.35	4.38	4.34	4.35	4.22	3.99
04/25/2025	4.34	4.37	4.36	4.32	4.32	4.22	3.95
05/02/2025	4.38	4.36	4.34	4.33	4.41	4.26	4.00
05/09/2025	4.37	4.36	4.34	4.34	4.40	4.28	4.05
05/16/2025	4.37	4.36	4.34	4.37	4.42	4.30	4.13

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
04/11/2025	3.96	3.98	4.15	4.32	4.48	4.91	4.85
04/17/2025	3.81	3.82	3.95	4.13	4.34	4.82	4.80
04/25/2025	3.74	3.76	3.88	4.06	4.29	4.75	4.74
05/02/2025	3.83	3.82	3.92	4.11	4.33	4.81	4.79
05/09/2025	3.88	3.85	4.00	4.18	4.37	4.86	4.83
05/16/2025	3.98	3.95	4.06	4.24	4.43	4.92	4.89

Spreads remained high, with full spectrum reaching an unprecedented level of +52 while 2s-10s remained elevated at +45. There's still stress in the system, manifested by the rising 10-year note yield, the highest in five weeks and daringly close to the "make or break" level at 4.50%. Likewise, the 30-year note yielding close to five percent indicates the rather obvious preference of risk assets (stocks) over treasuries and other fixed-income instruments.

Animal spirits have been once again released from cages on Wall Street, the speculative fury for stocks pressuring the bond market. In the current atmosphere, rate cuts might be more wishful thinking than anything else.

Adding to pressure on long-dated maturities was Friday's U.S. debt downgrade from AAA to AA1 by Moody's, joining Standard & Poor’s, which downgraded the U.S. to AA+ from AAA in August, 2011, and Fitch Ratings, which cut the U.S. rating to AA+ from AAA, in August, 2023.

If it was even possible, the treasury yield curve continued to flatten, with a complete spread of just 0.94% between the low (3-year, 3.95) to the high (30-year, 4.89%). Should the U.S. federal government continue running massive deficits, as opposed to showing ANY fiscal restraint, rates will continue to rise as investors take flight from the supposed "risk-free" trade in U.S. treasuries.

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
2/14: +21
2/21: +23
2/28: +25
3/7: +33
3/14: +29
3/21: +31
3/28: +38
4/4: +33
4/11: +52
4/17: +53
4/25: +55
5/2: +50
5/9: +49
5/16: +45

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
2/14: +32
2/21: +31
2/28: +13
3/7: +24
3/14: +25
3/21: +23
3/28: +26
4/4: +5
4/11: +38
4/17: +44
4/25: +40
5/2: +41
5/9: +46
5/16: +52

Oil/Gas

WTI crude oil closed out the week in New York trading at a price of $62.49, versus last Friday's 61.06. Two weeks ago the closing price was $58.38, which was the lowest level since February, 2021. Oil's gain on the week appears to stem from an oversold condition. Oil futures are in backwardation, the forward price of the futures contract is lower than the spot price, implying high inventory levels. With production increases by OPEC+ about to take effect in June, future prices are understandingly lower through January, 2026, bottoming out at $59.99.

Futures prices are reflecting what global markets are currently broadcasting: no global recession, no supply chain chaos, low inflation, happy talk all around. The "good times" narrative has taken hold of most markets.

Gas prices simply refuse to come down. Retailers apparently respond immediately to gains in the price of oil, slowly to declines, as the lows from two weeks ago barely registered. The national average was $3.12. Demand being inelastic, oil companies and retailers rely on a mobile consumer for profits.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump at $3.17, up seven cents from last week.

The high price remained the province of California at $4.88, up seven cents on the week. Mississippi retained the low spot at $2.65. The only other state reporting a fuel price under $2.70 is Tennessee ($2.68). Louisiana is right at $2.70, followed by South Carolina ($2.73) and Alabama ($2.74). In Oklahoma, the price is $2.78. Texas, $2.79; Arkansas, $2.80. Florida's foray below $3.00 lasted less than a week. It's currently $3.02.

The Northeast continues to be led by Pennsylvania ($3.29). New England and East coast states all range between $2.88 (New Hampshire) and $3.10 (Maryland). Prices are overall slightly higher than last week.

Midwest states are led by Illinois ($3.36), the price a nickel lower than last week. Kansas ($2.83) is the lowest, followed by Kentucky ($2.88) and Missouri ($2.91) Indiana drivers are paying $3.19, a substantial increase from last week's $3.07. Similarly, Michigan's prices rose from $3.05 last week to $3.18 currently.

Along with California, Washington is the only state above $4.00, higher, at at $4.31. Oregon ($3.91) and Nevada ($3.89) are seeing higher prices this week as well. Arizona appeared headed for sub-$3.00, down to $3.26 last week, bouncing back up to $3.40. Neighboring New Mexico is a relative bargain at $2.92, though that's 14 cents higher than last week. Idaho and neighboring Utah were the most stable, at $3.24 and $3.25, respectively.

Sub-$3.00 gas is found in fewer states this week than last, with just 21 hitting the mark. Prospects of lower gas prices for American drivers seem to be fading along with fear of recession.

Bitcoin

This week: $103,888.10
Last week: $104,416.70
2 weeks ago: $95,497.28
6 months ago: $91,546.89
One year ago: $66,680.90
Five years ago: $9,177.64

Bitcoin has stalled out in a range of $102,000 to $104,000, possibly reflecting the holdup in the U.S. Senate of the GENIUS act, which failed to break out of committee two weeks ago. There is supposedly a cloture vote upcoming, possibly as early as Monday, according to sources close to Senate majority leader John Thune. The bill, sponsored by Tennessee Senator Bill Haggerty, who probably knows more about gambling than crypto-currencies, provides "safeguards" for consumers (AKA: more furious fleecing).

Senators Kirsten Gillebrand (NY) and Cynthia Lummis (WY) are also vocal supporters of the bill. Democrats and a handful of Republicans previously sent the bill to failure over concerns of conflicts of interest and insider dealing, a topic upon which most legislators on Capitol Hill are intimately familiar. The humor is not lost on cynics over the name "GENIUS" in the bill, as Senate IQs are generally well below what would be considered higher intellectual levels.

The usual talk about bitcoin breaking further upwards towards $200,000 and beyond has been tamped down as regulations on what was originally hailed as "new money" or "21st century gold" move bitcoin and all the other garbage in the crypto-universe closer to the mainstream. Wall Street loves it, which is, in itself, a good reason to dis-engage from speculation on imaginary digital currencies.

Precious Metals

Gold:Silver Ratio: 98.84; last week: 101.25

Per COMEX continuous contracts:

Gold price 4/20: $3,341.30
Gold price 4/27: $3,330.20
Gold price 5/2: $3,247.40
Gold price 5/9: $3,329.10
Gold price 5/16: $3,205.30

Silver price 4/20: $32.54
Silver price 4/27: $33.34
Silver price 5/2: $32.18
Silver price 5/9: $32.88
Silver price 5/16: $32.43

Gold suffered a massive markdown in the futures and at spot. Futures fell by nearly $125 on the week, the result of Wall Street's mood change from bearish behavior to a renewed bullish outlook. If interest rates remain high and the U.S. economy perks up, gold is likely to stagnate if not decline further.

The opposite might be said of silver, which lost just 45 cents on the week, a minuscule decline compared to gold, sending the gold:silver ratio below 100 and towards something more realistic. Because of its properties as an industrial metal as opposed to gold's strictly monetary function, silver might gain as gold declines over coming months.

This is not to say that either metal is overvalued. It's more a perception that the U.S. dollar will regain strength as the Trump agenda begins to be clarified and gradually implemented. It would not be a stretch of imagination to see gold at $3000 and silver at $38.50, implying a GSR in a range of 76-79. While that's still degrees of magnitude higher than historical precedents of 12 to 16, it is worthy of consideration. Silver has been the most undervalued commodity for decades, though re-industrialization on a global level might change the math and the attitude in the futures market. A return of silver as a medium of exchange being highly unlikely, it remains a relatively inexpensive means of storing value.

While there was recently a mini-rush into gold at the retail level, recent price fluctuations may have put the kibosh on projections for $4000 or even $5000 gold over the near term. Central bank buying - or the lack thereof - will tell the true story of where gold's price is headed. Silver seems headed on its own path.

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:	36.21	43.49	39.77	39.63
1 oz silver bar:	38.00	44.95	40.40	40.00
1 oz gold coin:	3,348.90	3,457.99	3,404.60	3,413.78
1 oz gold bar:	3,335.78	3,410.32	3,367.75	3,368.62

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell sharply through the week, to $39.95, a $1.87 decline from the May 11 price of $41.82 per troy ounce.

WEEKEND WRAP

Seeing is believing, and passive investors will be seeing some healthy gains in their portfolios shortly. Playing along with any narrative du jour is looking like the new normal, good, bad, or otherwise.

At the Close, Friday, May 16, 2025:
Dow: 42,654.74, +331.99 (+0.78%)
NASDAQ: 19,211.10, +98.78 (+0.52%)
S&P 500: 5,958.38, +41.45 (+0.70%)
NYSE Composite: 19,934.06, +149.37 (+0.75%)

For the Week:
Dow: +1,405.36 (+3.41%)
NASDAQ: +1,282.18 (+7.15%)
S&P 500: +298.47 (+5.27%)
NYSE Composite: +614.86 (+3.18%)
Dow Transports: +1119.01 (+7.97%)

Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2025, Downtown Magazine Inc., all rights reserved.

Saturday, May 17, 2025

Buy-and-Hold and Buy-the-Dip Have Been Enormously Profitable; May Become Even Better as Trump Upends Global Commerce

Thanks to Monday's massive melt-up, the major indices are on track for a large winner for the week.

As of Thursday's close, the Dow Industrials were ahead by 1,073 points (2.60%). NASDAQ has put on a massive 6.60% gain, up 1,183 points. The S&P 500 is up a more modest 4.54%, or 257. points. The NYSE Composite is up 457 points, lagging the field with a 2.41% gain.

While these indices have, over the past six weeks (since April 2, "Liberation Day"), moved from beneath their 50 and 200-day moving averages to above them, excepting the Dow, which is still in between, they remain off their all-time highs. That shouldn't be a problem for most investors, who are likely more relieved that their 15-25% portfolio losses are now more along the lines of 2-5% lower and at just about break even year-to-date.

Even better, long term investors, especially since the GFC crash that bottomed in March 2009 (coincidentally, right around the time bitcoin became a "thing"), have benefitted from buy-and-hold or buy-the-dip strategies, with passive investors multiples higher off lows on the Dow, NASDAQ, and S&P of roughly 7,200, 1,400, and 750 on the Dow, NASDAQ, and S&P, respectively.

Passive investors who bought the bottom in 2009 up on average eight-fold. A hypothetical $10,000 invested in March 2009 would be worth somewhere in the range of $80,000 today. A person contemplating retirement at 50 years of age in 2009 with 100,000 invested, might have already taken the plunge at 62 (2021), riding the wave through the pandemic scare with a nest egg of around $800,000 today.

Whether or not that's enough to retire on is largely a choice of lifestyle. A 5% annual drawdown of $40,000 a year, or $3,333 per month, certainly would provide more than enough to survive and thrive in the golden years, and that's before adding in Social Security remittances. By comparison, gold is up just more than 80% since the GFC.

It's obvious that the Wall Street casino has made millionaires galore out of the extremely patient cohort of passive investors. Despite the gloom-and doom clanging from goldbugs and non-believers, simply going with the flow has been a winning strategy. Buyers of dips have fared even better.

An argument can be made that lower purchasing power of the US dollar over the years has eroded the value of stock and bond portfolios, but, asset inflation being the forerunner of consumer price inflation, an eight-fold increase in asset value easily more than offsets the rampaging inflation of 2021-2023. Those harmed the most by declining purchasing power are in the lower classes, those who don't own stocks and have not participated in some of the best consecutive years of gains in stocks, ever.

President Trump's promise of an American "golden age" will have to pull the middle and lower classes higher with better, higher-paying jobs in a revitalized U.S. economy. Re-shoring of industries will have to play a large role if Trump's promise is to be realized.

Long story short, America's economy, while somewhat unbalanced, favoring asset allocators over laborers, remains the envy of the world and may become even more dominant in years to come.

An exemplar of the change in attitude concerning America's fortunes can be seen in the recent collapse of the gold price, which is being hammered lower again today, dropping another $60-80, down as low as $3,156 this morning. Despite being up 20% year-to-date, gold has lost nearly half of that gain in just the past week. There was every indication - especially with the gold:silver ratio over 100 - that gold had gotten ahead of itself, the rumors of a new gold-backed BRICS+ currency not withstanding. Trump has countered any BRICS+ aspirations with an unexpected surge of global deal-making and probably never before seen.

Gold may turn in the second half of the year from the best asset to the worst. Silver should benefit from gold's short-term demise with the GSR returning to somewhat more normal levels because of its use as an industrial metal over that of a monetary one. Industrialization on a scale that the Trump approach is promoting will require huge amounts of silver, copper and other raw materials, keeping their prices stable, if not raising them substantially.

In less than four months since his inauguration, President Trump has overturned the tables of global trade and he's only just begun. The next three to four years and beyond may be the most prosperous ever seen in the history of America, which turns 300 year old in just over a year from now.

With markets set to open in minutes, futures are higher. Dow futures: +120; NASDAQ: +40; S&P: +14. Buy and hold is here to stay.

At the Close, Thursday, May 15, 2025:
Dow: 42,322.75, +271.69 (+0.65%)
NASDAQ: 19,112.32, -34.49 (-0.18%)
S&P 500: 5,916.93, +24.35 (+0.41%)
NYSE Composite: 19,784.69, +156.23 (+0.80%)

Thursday, May 15, 2025

Deflationary Trends Dominate Data Drop; PPI Checks in a -0.5% MOM, Lowest in 5 Years; Walmart Warns on Revenue Miss

Wednesday produced another split decision on equity markets with the Dow and NYSE Composite lower and the NASDAQ and S&P higher, albeit only slightly.

Traders were possibly waiting on Thursday's pre-market data dump and earnings from Walmart (WMT).

Of the multiple releases at 8:30 am ET, the most stunning was April PPI, which registered a -0.5% month-on-month, the lowest such reading since April 2020, at the onset of the spamdemic.

As Money Daily has been inferring for months, the chorus of cheerleaders for Fed rate cuts are likely going to be singing the wrong tune. Rather than inflation and recession harming the economy, it's dis-inflation or deflation that will emerge as the main threat later this year, if not already in play.

A negative on the PPI and stalled out CPI for April signal that between DOGE efforts in Washington, deportations, tariff trauma, and OPEC+ production cuts, prices for everything from Pop-tarts to retail gasoline are falling, pretty much a natural effect after years of official Washington's mismanagement.

Along with the PPI showing up harshly deflationary, April Retail Sales were flat, rising just 0.1% over the month. If consumers aren't expanding their spending - they're broke, using credit cards to buy food - there's no chance for any inflation, either at the producer level, as pricing power evaporates, or at the consumer point.

Initial jobless claims came in the same as last week, with 229,000 applying for benefits.

The NY Fed Manufacturing Index fell again, to -9.2 from -8.1 last reading. The Philly Fed was wildly improved, at -4, from -26.4 in the prior period.

The market awaits April readings on Industrial Production and Capacity Utilization.

Walmart beat its earnings forecast but missed on revenue in the first quarter for the first time in five years. The company blamed tariffs (which haven't been fully implemented yet) as the cause for the revenue miss.

WTI crude oil is down sharply after the EIA announced a "surprise" inventory build. The price of a barrel of light, sweet crude is hovering around $61 after closing out yesterday in New York at $63.15.

With all the confusion associated with Trump making multiple deals in the Middle East and data showing something along the lines of stag-deflation, stock futures are sharply lower. Dow futures, -142, NASDAQ futures, -102, S&P futures, -21.

At the Close, Wednesday, May 14, 2025:
Dow: 42,051.06, -89.37 (-0.21%)
NASDAQ: 19,146.81, +136.72 (+0.72%)
S&P 500: 5,892.58, +6.03 (+0.10%)
NYSE Composite: 19,628.46, -94.91 (-0.48%)

Wednesday, May 14, 2025

Stocks Pause After Impressive Three Weeks; Oil's Rise Contrary to Recent Trends; Trump, Tech Titans Making Strides in Middle East

As trading began on Wednesday, the most noticeable change was in gold, sent lower by more than $60 in the hour before the bell ($3,180).

Stocks, after a split decision on Tuesday, opened trading with a marginally positive bias. There was not much for traders to digest heading into the middle of the week. Thursday will be more impactful with earnings releases for Cisco (CSCO) after the close Wednesday and John Deere (DE), Walmart (WMT), Gambling.com (GAMB), Alibaba (BABA), and Birkenstock (BIRK) reporting Thursday morning.

Also on Thursday, April PPI, reports on regional economic activity from the New York and Philadelphia Feds, April capacity utilization, industrial production, retail sales, and the weekly unemployment report of initial and continuing claims.

With President Trump in the Middle East and the highly-anticipated possible/not probable meeting between Russian President Putin and Ukraine proxy Zelensky or their respective representatives in Turkey, even the geo-political scene is on hold for the day.

Stocks are showing a slight negative trend in Europe.

Stocks have put together a fairly impressive rally over the past three weeks, erasing year-to-date losses on all the major indices. The NASDAQ has gained massively, up 20% since April 21. With Trump and his entourage of tech moguls hobnobbing in Saudi Arabia, Mag7 and chip stocks have been moving higher.

Wednesday offers a solid opportunity for traders to stake out new positions at somewhat lower prices. Sector rotation has developed out of defensives into more speculative stocks. Coinbase (COIN), after the Tuesday announcement that the company was being added to the S&P 500 on May 19, has responded with a nearly 30-point rise. The cryptocurrency exchange will replace Discover Financial (DFS), which is being acquired by Capital One (COF), the deal expected to close within the next two to four months.

Bitcoin, of which Coinbase holds a significant amount in its treasury, has not responded in any noticeable manner, stuck in a range between $102,000 and $105,000.

WTI crude oil, which has gained more than $5 - from $58 to above $63 - in just the past week, may be in a technical phase. The Energy Information Administration’s (EIA) weekly report (due at 10:30 am ET, could shed more light on the wheres and whys of oil's recent advance. In the main, consideration that the U.S. - and possibly Europe - is not headed for a recession could be fueling the recent positive bias.

Stocks are not exactly in "limbo" today, but there does not seem to be much in the way of actionable news or data.

At the Close, Tuesday, May 13, 2025:
Dow: 42,140.43, -269.67 (-0.64%)
NASDAQ: 19,010.08, +301.74 (+1.61%)
S&P 500: 5,886.55, +42.36 (+0.72%)
NYSE Composite: 19,723.38, +11.83 (+0.06%)

Tuesday, May 13, 2025

Is the Bottom In or Was Monday's Rally a Bear Market Bump?; CPI Lowest in Four Years; Gold Lower, Crude Oil Soaring

The jury is still out.

Whether Monday's smashing rally was a sure sign that the bottom for stocks is "in" or the temporary China-USA trade deal worked out over the weekend ignited a wicked bear market rally.

Signs seem to be leaning toward the positive as Donald Trump reshapes the economic landscape. Additionally, Tuesday's reading on April CPI saw consumer prices rise at their slowest pace since February, 2021, increasing 2.3% over the prior year and up just 0.2% for the month.

Monday's face-ripping rally had other effects, sending gold to its lowest level in two weeks, dropping close to $3,200 as the day wore on.

Futures are mixed heading toward Tuesday's opening bell. Just before 9:00 am ET, Dow futures are off 180 points, S&P futures are flat-lining and NASDAQ futures are up 40.

It's no longer wait-and-see for many eager investors, judging by the outsized gains on the NASDAQ.

At the Close, Monday, May 12, 2025:
Dow: 42,410.10, +1,160.72 (+2.81%)
NASDAQ: 18,708.34, +779.43 (+4.35%)
S&P 500: 5,844.19, +184.28 (+3.26%)
NYSE Composite: 19,711.55, +392.35 (+2.03%)

Sunday, May 11, 2025

WEEKEND WRAP: Dullest Week of the Year Comes as Welcome Relief; Bitcoin Powers Past $100,000; Trade and Tariff Talk Toned Down

The week just past was about the calmest markets have been this year. Stocks barely budged on a weekly basis. Treasuries stagnated, the largest move was up 8 basis points on 5-year notes. The short end of the curve, from one month out to six months, was flat as a pancake, primarily because the Fed held steady on the federal funds target rate at the FOMC meeting mid-week.

While Jerome Powell may become infamous for his "I don't see the stag or the flation," comment, he's managed to produce (with ample assistance from the Trump administration) a stagnant U.S. economy with almost no inflation, which may be the best that consumers can expect and a welcome relief from wild gyrations of the past four-plus years.

A break in the action is more than likely "a good thing," as Martha Stewart might quip. Summer is upon us and admittedly, plenty of people are worn out from the politics, the bickering, the questioning and the roller coaster ride since 2020. Take a deep breath and relax.

Other than bitcoin vaulting over $100,000, nothing much happened. Unless one wants to make points over Trump's trade deal with the UK - all $148 billion of it of it - or the first American pope, embrace the calm.

Stocks

Though it didn't seem like it, all the major averages finished lower on a weekly basis. It was a close call, the worst of it on the S&P 500, which ended down 26.76 points (-0.47%).

Agree with it or not, bear market conditions persist. The Dow is down the least, -8.36% from its December 4 high (45,014.04). The S&P peaked at 6,144.15 on February 19 and is down 8.88% since. The NASDAQ is off 11.13% from its peak of 20,173.89 on December 16 of last year with a ton of overhead resistance just beyond 20,000. Call that a correction or whatever Wall Street spin is appropriate, but the bearish slant of the charts is plain to see.

Markets got a 90-day reprieve from Trump on a tariff pause while deals are being worked out, but more than a month has passed already and the first actual effects will not be known until late summer at the earliest.

Earnings reports are beginning to wind down, with Cisco, Applied Materials, Alibaba, and Walmart the most significant among those reporting in the coming week.

Monday: (before open) NRG (NRG), FOX (FOXA), Sportradar (SRAD), Chegg (CHGG); (after close) Nuscale (SMR), Hertz (HTZ), Blink (BLNK), Petrobras (PBR)

Tuesday: (before open) JD.com (JD), Honda (HMC), Under Armour (UAA), Landstar (LSTR); (after close) SurgePays (SURG), Kindercare (KLC), Karman Space & Defense (KRMN)

Wednesday: (before open) Tencent (TCEHY), Ars Pharma (SPRY); (after close) Boot Barn (BOOT), Cisco (CSCO), Jack in the Box (JACK)

Thursday: (before open) John Deere (DE), Walmart (WMT), Gambling.com (GAMB), Alibaba (BABA), Birkenstock (BIRK); (after close) Cava (CAVA), Galactic (SPCE), Applied Materials (AMAT)

Friday: (before open) Mastech Digital (MSHH), Codere (CDRO).

Since they did what everybody thought they would do - nothing - the Federal Reserve's May 5-6 FOMC meeting was really kind of a bust. The initial reaction was a gain of 20 points on the S&P and a rise early Thursday, but after peaking at 5,718, the 500 ended the week at 5,659. The Fed had nearly nothing to do with any moves in the market.

April CPI will be reported Tuesday before the bell. The mortgage purchase index and the weekly EIA report on oil and distillates are on tap for Wednesday.

Thursday is jam-packed with April PPI, reports on regional economic activity from the New York and Philadelphia Feds, capacity utilization, industrial production, April retail sales and the weekly unemployment report of initial and continuing claims.

Friday brings reports on housing starts, building permits, import prices and the University of Michigan's monthly survey of consumer sentiment.

Treasury Yield Curve Rates

Date	1 Mo	1.5 mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
04/04/2025	4.36	4.35	4.36	4.28	4.25	4.14	3.86
04/11/2025	4.37	4.35	4.38	4.34	4.35	4.21	4.04
04/17/2025	4.36	4.35	4.38	4.34	4.35	4.22	3.99
04/25/2025	4.34	4.37	4.36	4.32	4.32	4.22	3.95
05/02/2025	4.38	4.36	4.34	4.33	4.41	4.26	4.00
05/09/2025	4.37	4.36	4.34	4.34	4.40	4.28	4.05

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
04/04/2025	3.68	3.66	3.72	3.84	4.01	4.44	4.41
04/11/2025	3.96	3.98	4.15	4.32	4.48	4.91	4.85
04/17/2025	3.81	3.82	3.95	4.13	4.34	4.82	4.80
04/25/2025	3.74	3.76	3.88	4.06	4.29	4.75	4.74
05/02/2025	3.83	3.82	3.92	4.11	4.33	4.81	4.79
05/09/2025	3.88	3.85	4.00	4.18	4.37	4.86	4.83

Spreads were higher this week, signaling continued stress in the treasury market. Demand for U.S. dollars continues to wane and Trump's tariff gambit isn't help the situation one bit. If anything, more foreign buyers are seeking out bi-lateral trade deals without the need of treasuries and some already employing gold reserves.

2s-10s are +49 basis points and have been at that level or higher since just after the April 2nd "Liberation Day" that sent all dollar-denominated assets on a collision course with reality. Full spectrum jumped from +5 to +38 from 4/4 to 4/11 and hit a new high this week at +46.

The treasury yield curve is about as flat as its ever been, with the low in the middle - 3.85% on 3-year notes - and the 20-year just 0.03 higher than the 30, at 4.86. The difficulty of making money as a lender with spreads about just one percent cannot be understated. There will be casualties. It's just a matter of time.

Spreads:

Oil/Gas

WTI crude oil closed out the week in New York trading at a price of $61.06, versus last Friday's $58.38, which was the lowest level since February 5, 2021 ($56.85). Oil's gain on the week appears to stem from an oversold condition. Given that there was no news on which to hang a rally, this week's bump to the upside should be considered little more than a dead cat bounce off extreme lows.

Speculators in the futures market probably sensed the time was right for a bear market rally and jumped into fray feet first. Though the gain was close to $3, there's nothing supporting WTI crude at any price above $60. Expect to see it back down into the mid-50s in short order.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump at $3.10, down four cents from last week. Yahoo Finance believes the national average will be below $3.00 this summer, as inventories stabilize, OPEC production hikes take hold, and refinery maintenance has been mostly completed. The inevitable re-alignment with the oil price may have finally begun.

Gas prices continued to fluctuate across the most of the country, the top price retained by California at $4.81, though that is up eight cents on the week and likely caused by the state's incessant taxation of anything and everything touched by consumers. Mississippi retained the low spot at $2.61, with Oklahoma, next-cheapest in the nation at $2.64, edging out Louisiana ($2.66) by just two cents. South Carolina checked in at 2.69. Tennessee, Arkansas (2.70), Alabama ($2.71) and Tennessee ($2.72) round out the lows in the Southeast. With North Carolina at $2.81, Georgia at $2.86 and Florida dropping 18 cents to $2.90, the entire region is a driver's dream, all below $3.00.

Outside of Pennsylvania ($3.28) and Maryland ($3.13), New England and East coast states all range between $2.86 (New Hampshire) and $3.08 (Vermont).

Midwest states are led by Illinois ($3.41), the price slightly higher than last week. Kansas ($2.83) is the lowest. Outside of Indiana ($3.07) and Michigan ($3.05), the entire region is sub-$3.00, from Ohio and Kentucky to the Dakotas.

Along with California, Washington is the only state above $4.00, stable at at $4.24. Oregon ($3.86) and Nevada ($3.85) continue seeing stable prices as well. Arizona appears headed for sub-$3.00, in at $3.26, though neighboring New Mexico is a relative bargain at $2.75. Idaho and neighboring Utah are at $3.24 and $3.25, respectively.

Sub-$3.00 gas can be found in more states this week, with at least 28 hitting the mark. Prospects for lower gas prices are beginning to bear fruit for American drivers.

Bitcoin

This week: $104,416.70
Last week: $95,497.28
2 weeks ago: $93,927.10
6 months ago: $88,470.49
One year ago: $61,151.16
Five years ago: $9,383.02

On Thursday, Bitcoin bounded over $100,00 for the first time since February 4, the timing of which was suspect as the quick run-up from $97,000 to $103,000 happened on Thursday, just as Democrats, joined by three Republicans in the Senate kept the GENIUS act - which would codify regulations regarding stablecoins and other crypto-related issues such as security and safeguards against insider trading and money laundering - from advancing for a full senate vote.

Democrats scoffed that the other side made last-minute changes that members were unable to scrutinize. They also pointed fingers at President Trump, who has vested interests in various crypto ventures. Nonetheless, bitcoin soared, as critics and pundits expect the issues to be ironed out and the bill presented again shortly, as early as the coming week and passage assured. Whether that happens to be wishful thinking or actual fact remains to be seen. The opposing sides appear to have some distance between them.

The usual talk about bitcoin breaking further upwards towards $200,000 and beyond was the dominant theme once the vapor-coin ripped through the psychological barrier at $100,000, proof that some people are prone to believe in fairy tales, unicorns and flying pigs.

Precious Metals

Gold:Silver Ratio: 101.25; last week: 100.91

Per COMEX continuous contracts:

Gold price 4/13: $3,254.90
Gold price 4/20: $3,341.30
Gold price 4/27: $3,330.20
Gold price 5/2: $3,247.40
Gold price 5/9: $3,329.10

Silver price 4/13: $32.19
Silver price 4/20: $32.54
Silver price 4/27: $33.34
Silver price 5/2: $32.18
Silver price 5/9: $32.88

Both gold and silver rebounded over the course of the week, showing tremendous resilience against the usual suppression tactics, though the idea that bitcoin would gain while gold and silver declined makes little sense in the larger scheme of protecting one's wealth against the predations of governments and central bankers.

Even though gold pulled back from $3,500 recently, arguments against holding, hoarding, or otherwise accumulating gold and/or silver are lacking. The price has only one direction, especially with governments working hard to devalue the dollar, yen, euro, pound, yuan, and franc.

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:	34.00	49.90	40.76	39.75
1 oz silver bar:	39.00	50.12	43.77	42.98
1 oz gold coin:	3,460.10	3,573.20	3,497.54	3,475.24
1 oz gold bar:	3,463.36	3,523.20	3,491.29	3,487.18

The Single Ounce Silver Market Price Benchmark (SOSMPB) rose sharply through the week, to $41.82, a $1.34 advance from the May 4 price of $40.48 per troy ounce.

Premia remain high. Gold and silver continue to hold recent gains quite well despite lack of enthusiasm from the general public. Central banks have been in the driver's seat since the end of 2022. In particular, gold has reached high levels so quickly, retail buyers may be reluctant to dive in at these prices. Silver is at bargain basement levels, vis-a-vis the gold:silver ratio remaining over 100, but without the whale-like impact of central bank buyers, retail level purchasing doesn't move the needle.

Additionally, a color of small-time silver stackers are discouraged at the metal's lack of explosiveness and may be looking for even lower entry points. Whether silver declines back into the 20s or not, buying when the GSR is multiples of the historic ratio seems to be a total no-brainer. There's no other way to put it. The silver price has probably more to do with its industrial uses than as a monetary metal. By dousing the advance of the "green wave" and with the possibility of a global recession still on a back burner, there might be some virtue to holding off on silver presently, but, there isn't much room for error in taking such a position.

From the perspective of a long-term chart back to the bottom near the end of 2022, silver is in a channel that suggests further advances. A pullback to $29.65 might be considered a reasonable expectation, but such a move might also be the result of a protracted global recession, at which point all dollar-denominated assets will drop. At least with silver, if it's in hand, you own it, which is, after all, the main purpose from a monetary standpoint.

Judging by prices on eBay at at online retailers, there is no shortage of small denominations of both metals available, nor is there a shortage of willing buyers at record or near-record prices. As limited as the public may be in terms of market depth, most of the skepticism is lost on buyers once they begin to explore their options. Some degree of FOMO (fear of missing out) cannot be discounted either. Retail buyers in the physical space increasingly do not consider COMEX or spot values valid and are letting the market set prices, as it should be.

WEEKEND WRAP

Investing shouldn't be exciting. It should be disciplined and reasonable. What purports to be a free, open, fair market in stocks is, in reality, anything but. Stocks are ruled by algorithms, computers, big money, and headlines. The preferred place to put money at this juncture is in precious metals, that is, until the real estate market comes back to earth, which is beginning to happen in many metro markets. The global asset bubble is not fully resistant to pinpricks.

At the Close, Friday, May 9, 2025:
Dow: 41,249.38, -119.07 (-0.29%)
NASDAQ: 17,928.92, +0.78 (0.00%)
S&P 500: 5,659.91, -4.03 (-0.07%)
NYSE Composite: 19,319.20, +5.02 (+0.03%)

For the Week:
Dow: -68.05, (-0.16%)
NASDAQ: -48.81 (-0.27%)
S&P 500: -26.76 (-0.47%)
NYSE Composite: -67.48 (-0.35%)
Dow Transports: -37.22 (-0.26%)

Friday, May 9, 2025

Bitcoin Surges Past $100,000 as Senate Rejects GENIUS Act, Killing Crypto Legislation

On Thursday, Bitcoin exploded higher, breaking beyond the mythical $100,000 mark for the first time in three months.

Bitcoin crossing the $100,000 mark once again is a major psychological milestone for investors in the broader crypto market. While the price itself doesn’t change Bitcoin’s fundamentals, it signals renewed optimism and confidence in digital assets. Several factors contributed to this surge:

Trade Deal Optimism: President Trump announced at a major trade agreement with the UK, which fueled market enthusiasm.
Market Resilience: Bitcoin has rebounded sharply from its April lows of $75,000, demonstrating once more its ability to recover from economic uncertainty.
Institutional Interest: Large investors and funds continue to accumulate Bitcoin, reinforcing its status as a hedge against inflation and geopolitical instability.
ETF Demand: Spot Bitcoin ETFs have seen strong inflows, suggesting sustained institutional buying.

This surge highlights Bitcoin’s evolving role in global finance as no longer just a speculative asset, but one in which it is increasingly viewed as a safe-haven investment and a proxy for fiat currencies.

Bitcoin surging past the $100,000 mark may trigger some deeper confidence in digital assets. However, whether it marks a definitive turning point for mainstream adoption is a bit more nuanced. It remains largely unused as a medium of exchange. Critics point to the tardiness of transactions and bitcoin's inability to operate on a scale similar to established payment processors, i.e., credit and debit cards, PayPal, Stripe, and a slew of imitators.

Breaking such the $100,000 barrier does, to varying degrees, reinforce Bitcoin's image as a mature asset. This milestone signals to retail investors, institutional players, and even some skeptical observers that Bitcoin has the momentum to withstand volatility. It may attract those who have been on the sidelines, certainly sparking broader media coverage and potentially drawing in more investors who are looking for alternative investment avenues or different ways to park money outside of the traditional places like money markets, gold or silver.

Mainstream adoption, however, isn’t driven solely by a dramatic price move. It requires a constellation of developments, including regulatory clarity, robust infrastructure, and clearer pathways to adoption for everyday use. While this price milestone is significant, the sustained involvement of institutional investors, the rollout of user-friendly trading platforms, and advances in scalability and security remain critical.

In essence, while the jump past $100,000 is a sends a signal that Bitcoin has momentum, it's not likely to lead to more tangible developments like integrated financial products, heightened regulatory acceptance, and broader consensus in its role as a hedge or store of value.

Current crypto legislation in Congress is at a crossroads, marked by bipartisan efforts to regulate digital assets - especially stablecoins - while grappling with deep concerns over national security, conflicts of interest, and the pace of innovation. The proposed GENIUS Act, which seeks to establish the first comprehensive regulatory framework for digital stablecoins, has attracted support from both sides of the aisle and significant pushback. Lawmakers are urging that the bill include safeguards against illicit activities and prevent potential conflicts of interest. These issues that have been magnified by the involvement of high-profile figures and their affiliated businesses, especially in regards to President Trump.

Tensions have arisen particularly among Democrats, several of whom recently reversed course on their support. Key figures led by a group of nine Democratic senators had expressed reservations or outright opposition until the legislation addresses their concerns, including ties to Trump-affiliated crypto ventures. These conflicts resulted in a procedural vote of 49-48 against pushing the GENIUS act forward, essentially killing the proposed bill. All Democrats voted against, along with three Republicans, including Rand Paul of Kentucky. Whether or not the House attempts to pick up the reins on crypto legislation remains a clouded picture. With determined resistance emerging, it’s probably a dead issue for the time being.

Ultimately, while the GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) Act and related proposals represent the most serious attempts yet to integrate crypto into a formal regulatory framework in the United States, for now it appears a dead issue. The debate underscores the challenge of regulating a rapidly evolving market without stifling its potential, something the senate was unable to achieve. This negative outcome has left the universe of the broader crypto ecosystem floundering.

Bitcoin adherents managed to see the death of U.S. crypto legislation as a badge of honor, a blow to the status quo and further evidence that bitcoin and the thousands of alt-coins are beyond legislation, being world assets not controlled by borders or governments. The surge past $100,000 was a defiant reminder of bitcoin's emerging role in global finance.

At the same time, gold was down sharply, a confounding adjunct in the changing dynamic of money and currency.

At the Close, Thursday, May 8, 2025:
Dow: 41,368.45, +254.48 (+0.62%)
NASDAQ: 17,928.14, +189.98 (+1.07%)
S&P 500: 5,663.94, +32.66 (+0.58%)
NYSE Composite: 19,314.18, +51.79 (+0.27%)

Thursday, May 8, 2025

Stocks Continue to be Grossly Overvalued; Corruption is Unabated; Earnings Don't Matter

Thank goodness earnings season is winding down. It's not been pretty. Many companies, claiming tariff uncertainty, have either lowered their full year guidance or pulled it completely. Maybe the world would be a better place without guidance, without analyst expectations every quarter for every company.

Come on, surprise us!

People need a break from the near-constant din of economic news, forecasts, predictions, data drops, innuendo, guesses and geo-political lies. The truth, or as close as one can get to it, is that corporate executives and politicians (often one and the same) aren't really ever going to open up and say exactly what they're thinking and they're even less prone to let anybody not deeply connected in on what they know and how they know it.

If there's a recession heading America's way, rest assured the common men and women who do all the hard work, raise kids, shop, cook, clean and keep a household will be the last to know. In Washington, D.C., and on New York's Wall Street, they know. They always do.

It's a fact that most trades on the major exchanges are done by computers, completely on their own. It's like 85-90%, and it's gotten to a point at which it is just not trustworthy. For instance, old-timers will tell you that back when actual humans executed most of the trades, stocks didn't go up six percent or eight percent on releasing their earnings report, no matter how good it was. That happens regularly these days.

Also, the S&P doesn't jump or drop 30 or 40 points in 10 or 15 minutes. It's physically impossible for humans to enter in that volume of trading simultaneously to cause a rise or fall like that, but, the S&P did that twice yesterday and it does so on a regular basis.

And, just in case you're wondering when was the last time the gold:silver ratio was over 100:1, as it is now (103 today), the answer is five years ago, just after the onset of the COVID scamdemic. Before that, um, never.

Are stocks overpriced? You betcha.

The Shiller PE or CAPE, is at 34.50, which is down a little from the third highest peak of 37.36, in October of last year. That happens to be higher than the peak before Black Monday in 1929 which ushered in the Great Depression (31.48). The other two higher peaks were in October 2021 (38.58, COVID strikes again) and November 1999, just before the great dot-com bust.

After the close Wednesday, Carvana (CVNA), AppLovin (APP), Cliffs (CLF), AMC (AMC) and others released first quarter earnings. Wednesday morning, Shopify (SHOP), Crocs (CROX), Yeti (YETI), ConocoPhillips (COP), Warner Brothers Discovery (WBD), Peloton (PTON) and others released theirs.

Doesn't matter, just like the Fed keeping the federal funds target rate at 4.25-4.50% yesterday. That rate could be ZERO and people woould still get mailings offering them credit cards with a $400 limit, 35% interest rates and annual fees of $96. There used to be usury laws. Not any more.

The current financial system is running on fumes. It's about to expire. The U.S. dollar has almost no purchasing power which explains why the stock market isn't about investing in strong American companies that produce dividends on a regular basis without fail. It's about making a fast buck, and the bigger and faster the better.

We're still in a bear market. Despite the recent rally, the major indices are still well off their highs. Year-to-date, the Dow is down 3.36%, S&P down 4.26%, and the NASDAQ, -8.14%. That may not sound too bad, but the second leg is coming shortly, which is nearly certain to last longer and drop deeper.

America's finances are a mess. Congress is a den of thieves. Only the connected win, and you and I are not connected.

Why do you think bitcoin is closing in on $100,000 and gold is off its highs, to say nothing of the biggest scam ever, silver at $32 an ounce? It's because the big money controls everything and all that matters are headlines on Bloomberg, CNN, CNBC and Reuters.

There is going to be hell to pay and you and I will be the ones getting the bill.

At the Close, Wednesday, May 7, 2025:
Dow: 41,113.97, +284.97 (+0.70%)
NASDAQ: 17,738.16, +48.50 (+0.27%)
S&P 500: 5,631.28, +24.37 (+0.43%)
NYSE Composite: 19,262.38, +80.22 (+0.42%)

Wednesday, May 7, 2025

Markets Remain Volatile as China and U.S. Annnouce Tariff Talks; Disney Rockets Higher; Jim Cramer, John Maynard Keynes Advise Standing Still

Market volatility - in both directions - continues to be the major theme of the markets this season. Earnings have been a mixed bag, with some companies thriving - like Microsoft and Meta Platforms - and others just surviving - Amazon and Apple.

Because of tariff trauma, an unhealthy number of companies have either slashed forward guidance or withdrawn it altogether, notably, airlines, JetBlue, American, United, just to name a few. Because of the on/off daily differences of opinions, rumors, and statements, company managers have no way to predict much more than which way the wind might be blowing on any given day, much less three, six or 12 months from now.

There's even more to consider. Warren Buffett steps down. The pope dies. India and Pakistan are exchanging fire. Ukraine is still largely unsettled.

What's a trader or investor to do?

For passive investors like the bulk of workers who are enrolled in long-term pension, IRA, or 401k plans, there's little choice but to hold the line and either retreat to defensive stocks or move funds into fixed income or money markets.

Active traders, especially hedge funds and portfolio managers of the big firms like Goldman Sachs, Morgan Stanley, Schwab, Merrill Lynch, et. al., are trying their level best to get a grip on the situation, even though it changes day-to-day.

Perhaps the best advice comes from CNBC's Jim Cramer, not exactly a beacon of logic or prudence, who often advises investors of all stripes to do nothing during earnings season, which is thankfully beginning to wind down. Had one taken such a blod, sage step to stand back, the results may turn out to be of a positive nature. Stocks - of course, depending upon specific allocations - have clawed back all of the losses stemming from the April 2nd "Liberation Day" tariff announcement, and are looking to add to gains at this juncture.

After markets closed on Tuesday, the White House, via Treasury Secretary Bessent, announced that China and the United States would be meeting in Switzerland later this month, the first indication that the two warring sides of the trade imbroglio, are approaching readiness to hammer out some kind of compromise rather than tear each others' economies apart with tariffs of 125-145% on all manner of goods.

At the same time, Advanced Micro Devices (AMD) reported an earnings beat sending shares higher in the after-and-pre market.

Supermicro (SMCI) reported with weak guidance, sending share lower by six percent. Rivian (RIVN) lost money again, posting -0.48, which was actually a beat, but the stock is caught in a downdraft, and Wynn Resorts (WYNN) reported EPS of $1.07, a miss, but the stock is up three percent. All three reported after Tuesday's close.

Wednesday morning offered better news as Disney reported a solid quarter with theme parks resurrected and the addition of over a million subscribers to their various streaming services. Shares are ripping higher by six to eight percent.

On the other hand, UBER reported this morning with a huge earnings beat of 0.83, but the stock is selling off by four percent before the bell, which brings to mind more sage advice, this offered by none other than John Maynard Keynes, who quipped, "The market can remain irrational longer than you can remain solvent."

There may be something to be learned from that.

At the Close, Tuesday, May 6, 2025:
Dow: 40,829.00, -389.83 (-0.95%)
NASDAQ: 17,689.66, -154.58 (-0.87%)
S&P 500: 5,606.91, -43.47 (-0.77%)
NYSE Composite: 19,182.16, -121.08 (-0.63%)

Tuesday, May 6, 2025

Stocks Start Week Gloomier; Nine-day Streak Ended as Fed Prepares to Do Nothing on Interest Rates; Stock and Oil Futures Lower; Gold, Silver Bid

The first full week of May began with some sobering news after stocks had risen steadily - the Dow and s&P up nine straight sessions - that brought markets back to earth at the open.

Tyson Foods (TSN) released fiscal second quarter results prior to the bell and warned that it faced a challenging environment, especially in beef products. The stock rook a nosedive right out of the gate and finished the day down 7.75%.

Berkshire-Hathaway's (BRK.B) founder and legendary stock-picker, Warren Buffett, announced he would step down as CEO at the end of the year, naming Greg Abel as his replacement. The board voted unanimously to promote Abel to the CEO position and to keep Buffett, 94, as Chairman. The news came as a shock to shareholders and sent shares tumbling five percent on the day, just one session removed from making an all-time high (540.92).

Buffett's departure is seen as the end of an era for the vast holding company Buffett built. His acumen in the market and uncanny ability to find and acquire top-performing companies are unrivaled in the investing universe and shareholders are likely to be correct in their assessment of the situation that nobody will produce the kinds of returns Buffett has over the past 60 years.

Adding to the downbeat mood, Foot Locker (FL), a major retailer of sneakers and athletic footwear, closed at $13/share on Friday and tumbled to a close of $12.04 Monday, down 44% year-to-date. The company, which has already suffered a net loss ove the past four quarters, is under pressure to produce profits in a sector that is expected to be adversely affected by tariffs. Shares closed down seven percent on Monday.

Looking forward to Tuesday's session, investors are eyeing more earnings.

Reporting after Monday's closing bell, Palantir (PLTR) reported a strong quarter but investors are apparently choosing to take profits as the stock price has risen nearly 400% over the past year. Shares are trending eight percent lower in pre-market activity.

Ford (F) pulled its forward guidance and warned that the company would take a $1.5-2.5 billion hit from President Trump's tariffs. Shares are down more than two percent before the bell. Stock of the iconic American car manufacturer is trading around $10 per share.

Tuesday morning, Marriott (MAR) provided some hope at least in the hospitality space. Shares of the international hotelier are trending two percent higher as the company topped Wall Street estimates of $2.27 per share by posting adjusted EPS of $2.32.

Ag giant Archer Daniels Midland (ADM) topped estimates of $0.68 per share with adjusted earnings of $0.70, though the company faces a challenging environment with operations in the Ag Services & Oilseeds segment, a significant contributor to ADM's revenue, seeing a 52% decrease in operating profit due to tariff and trade policy uncertainties. Shares are modestly higher in pre-market trading.

Oil was smacked lower Monday as OPEC+ announced another round of production increases. The rising production quotas are seen by analysts as punishment meted out by Saudi Arabia, the bloc's largest producer, to other members of the cartel for not adhering to lower quotas over the past year. The Saudi's can handle lower producer prices while many of their counterparts will struggle economically.

Whatever the condition or purpose of the call for increased production, it comes at a particularly sensitive time, as tariff worries confound countries and economies already seeing signs of recession, especially in Europe. The price of WTI crude dipped as low as $55.93 Monday. It has since recovered to trade above $58, though it is unlikely to hold that level, already a four-year low.

While lower oil prices should serve as a boon to businesses relying on energy and consumers who fuel their vehicles, the overall impact is seen as yet another sign of global retrenchment.

At the same time, gold has rebounded sharply after dropping to a low of $3,222 last week. The price per ounce is up more than $140 from Friday's close. Silver has also risen, up more than $1 from its close of $32.18 last week to a high of $33.35 Tuesday morning.

The crypto space is under pressure this morning, with bitcoin falling below $93,000 for the first time in over a week after hitting an interim high above $97,000 just a few days ago.

With less than an hour until the opeing bell, stock futures are sharply lower. Dow: -304; NASDAQ, -245; S&P, -51.

As the Dow gained more than 3,000 points and the S&P more than 525 since April 21, stocks have once again become rather frothy, despite little easing of global trade and tariff tension.

The Federal Reserve begins its two-day FOMC meeting today and announces policy - expected unchanged with the federal funds target rate at 4.25-4.50% - Wednesday at 2:00 pm ET. Apparently, the stock-loving community isn't waiting around to hear Chairman Powell opine on how the Fed is data-driven and sees market dynamics as evenly balanced. Many Fed watchers 0 including President Trump - have grown impatient awaiting their promised rate cuts, which have stagnated since a one percent rip lower from the September, November, and December 2024 meetings.

The markets are moving on without the Fed, which is probably a condition that should have occurred earlier in the business cycle. Increasingly isolated by Trump’s fiscal re-tooling, the Fed continues to suffer from lack of public confidence in its ability to affect positive economic outcomes. Good riddance.

At the Close, Monday, May 5, 2025:
Dow: 41,218.83, -98.60 (-0.24%)
NASDAQ: 17,844.24, -133.49 (-0.74%)
S&P 500: 5,650.38, -36.29 (-0.64%)
NYSE Composite: 19,303.23, -83.44 (-0.43%)

Sunday, May 4, 2025

WEEKEND WRAP: Stocks Post 2nd Straight Week of Gains as Tariff Fears Abate, Jobs Growth Stable; FOMC Meeting on Tap; Gold, Silver, Oil Lower

Even though the Kentucky Derby was run on a very sloppy track, two of the favorites came through as champions as Sovereignty and Journalism ran 1-2. Congratulations to Godolfin Stables, rider Junior Alvarado and trainer Bill Mott on their victory.

A happy weekend was shattered this morning upon reading an article about a bill in congress that purports to create a "new" savings vehicle for Americans. This kind of thing reeks of everything wrong with the current political and financial systems.

Today we have a perfect example of why Americans - or any person of sound mind anywhere in the world - should exchange their fiat currency (dollars, yen, pound, euro) for gold and/or silver and keep the metals in their own possession. Essentially, despite President Trump's desire to "drain the swamp", because the corruption in the government and banking system is so vast and deep, politicians and bankers will continue to rob individuals blind, either by taxation, obfuscation, inflation, or just plain theft.

Bankers and politicians consider your money to be theirs, so, until that changes (probably never), the solution for most people is to keep assets out of the system as much as possible. That is why gold and silver (honest money), purchased privately and kept quietly, are among the few choices available to avoid taxation and the prying eyes and hands of government.

A bill in the House of Representatives [PDF] put forward by Tennessee representative Diana Harshbarger for a "Universal Savings Account (USA)", is being promoted as "tax advantaged."

A companion bill has been introduced in the Senate by Texas Senator Ted Cruz.

Here's what the Tennessee rep said about the bill:

”It’s an honor to partner with Senator Cruz on this commonsense legislation to empower Americans to take control of their financial futures. The Universal Savings Account Act cuts through red tape and gives every American a flexible, tax-free way to save, invest, and spend — without government interference or penalties.”
“Washington shouldn’t be in the business of micromanaging how people use their own money. This bill is a win for working families, a win for personal freedom, and a win for financial independence.”

If one makes an effort to read the actual bill, one would be hard-pressed to actually understand how it benefits the account holder. If representative Harshbarger and senator Cruz wanted to create essentially a brokerage account in which contributions are taxed as ordinary income upon withdrawal but any gains were not taxed, they should have just spelled it out in simple language, but they didn't, because the bill was almost certainly written by bankers, for bankers, not for individuals, as they purport and revealing exactly how these accounts function would likely result in very few people using them, although, as a May, 2024 report by the Tax Foundation finds, Canadians and British subjects make widespread use of such accounts. (can you spell S-H-E-E-P-L-E?)

Rep, Harshbarger's statement is the ultimately disingenuous and hypocritical. Her bill does not provide a "tax-free way to save, invest, and spend..." nor does it diminish "government interference." It's nothing but another way for bankers and politicians to fleece the herd.

For what it's worth, Rep. Harshbarger won her East Tennessee house seat in 2020 on a platform that stressed a religious background, which, in itself, is somewhat of a turn-off to some people. But, being "religious" and a Republican, she won handily, and won again in 2022 and 2024 and will probably win every two years until she's 80 or 90 (currently 65).

For a "god-fearing" woman, Harshbarger isn't shy about making money or lying, for that matter, a trait that is shared by most, if not all, politicians. In 2013, her husband, Robert, agreed to a four-year prison sentence and payment of fines and asset forfeitures totaling about $1.2 million for his involvement in the pharmaceutical company, American Inhalation Specialists (AIMS), pleading guilty on charges of introducing misbranded drugs into interstate commerce and health care fraud. Diana, in her initial run for congress in 2020, said flatly that she had nothing to do with the company, even though official documents list her as secretary of the corporation at various times before, during and after a federal investigation, indictment, and conviction. Both Mrs. Harshbarger and her husband are pharmacists.

So, is this woman the kind of person Americans want sponsoring legislation that will affect their life savings? As if Harshbarger's background isn't sketchy enough, when she ran for her House seat in 2020, she was purportedly worth $11.5 million, failed to report stock trades in a timely manner on companies including Facebook (META), Walmart, Apple, Verizon, Coca-Cola, Chevron, defense contractors Raytheon and Lockheed Martin, Chegg, and vaccine-makers, Johnson & Johnson and Regeneron in violation of the STOCK (Stop Trading On Congressional Knowledge) Act, that requires legislators to disclose trading activity, though many, if not all, senators and House Reps. routinely violate this toothless law.

She's probably quite a bit wealthier now, since she's an quite an active trader.

There wasn't time for this report to delve into Senator Cruz's background, though it's doubtful it could be any more disturbing than Harshbarger's, if that's even possible.

Thus, a weekend despoiled by government elitists beyond the law. The root of all evil lays within the Capitol. D.C. currently stands for "Deeply Corrupt."

Stocks

The major indices notched another solid week, the second straight, now having erased all of the post-"Liberation Day" April 2nd declines. Notably, the gains were led by the Dow Jones Transportation Average, which gained 4.30%, followed by the tech-laden NASDAQ, up 3.42%. The tariff trauma pullback is now being described in part as a healthy correction. Wall Street sentiment turned on a dime with the April jobs number of +177,000, from gloomy to thrilled.

It's a traders' market for certain. Whether stock prices can continue to grow from here seems likely. The majors have defied the various "death cross" warnings by vaulting past their 50-and-200-day moving averages. Earnings were once again mixed, with Apple and Amazon disappointing while Meta and Microsoft showed improvement in the tech space. It's still a mixed bag with more important earnings figures from the first quarter to hit this week, including:

Monday: (before open) Tyson (TSN), FootLocker (FL), Berkshire-Hathaway (BRK.B), FreshPet (FRPT), Cummins (CMI); (after close) Palantir (PLTR), Ford (F), Hims|Hers (HIMS)

Tuesday: (before open) Marriott (MAR), Archer Dainiels Midland (ADM), Celcius (CELH); (after close) Advanced Micro Devices (AMD), Supermicro (SMCI), Rivian (RIVN), Wynn Resorts (WYNN)

Wednesday: (before open) Walt Disney (DIS), Teva Phameceuticals (TEVA), Uber (UBER), Barrick (GOLD), Novo Nordisk (NVO), Johnson Controls (JCI); (after close) Carvana (CVNA), AppLovin (APP), Cliffs (CLF), AMC (AMC),

Thursday: (before open) Shopify (SHOP), Crocs (CROX), Yeti (YETI), ConocoPhillips (COP), Warner Brothers Discovery (WBD), Peloton (PTON); (after close) Mercado Libre (MELI), DraftKings (DKNG), Cloudflare (NET), Coinbase (COIN)

Friday: (before open) Enbridge (ENB), Algonquin (AQN), Gogo (GOGO).

Eyes will be on the Federal Reserve's May 5-6 FOMC meeting, looking for any signals from Fed Chairman Powell or other indications in the official release that the Fed is considering lowering interest rates. With inflation now clearly not an issue, the Fed might want to goose markets a little, though it's unlikely to do so at this meeting.

If anything, the Fed will want to stand pat and might throw cold water on rate cut hopes. With first quarter GDP in hand, and, knowing that the -0.3% contraction was almost fully the result of a rush of imports ahead of Trump's tariff regime, will view the economy as somewhat balance. The 177,000 April jobs reported Friday will also temper their enthusiasm for easier money.

Treasury Yield Curve Rates

Date	1 Mo	1.5 mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
03/28/2025	4.38	4.35	4.35	4.33	4.30	4.26	4.04
04/04/2025	4.36	4.35	4.36	4.28	4.25	4.14	3.86
04/11/2025	4.37	4.35	4.38	4.34	4.35	4.21	4.04
04/17/2025	4.36	4.35	4.38	4.34	4.35	4.22	3.99
04/25/2025	4.34	4.37	4.36	4.32	4.32	4.22	3.95
05/02/2025	4.38	4.36	4.34	4.33	4.41	4.26	4.00

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
03/28/2025	3.89	3.91	3.98	4.11	4.27	4.65	4.64
04/04/2025	3.68	3.66	3.72	3.84	4.01	4.44	4.41
04/11/2025	3.96	3.98	4.15	4.32	4.48	4.91	4.85
04/17/2025	3.81	3.82	3.95	4.13	4.34	4.82	4.80
04/25/2025	3.74	3.76	3.88	4.06	4.29	4.75	4.74
05/02/2025	3.83	3.82	3.92	4.11	4.33	4.81	4.79

There were few changes in the makeup of the treasury yield curve. The week's gains in stocks sent treasuries back roughly to levels seen two weeks ago.

Spreads remained elevated with 2s-10s at +50 basis points and full spectrum moderating down to +41.

The FOMC meeting this coming week (May 5-6) is likely to be uneventful as the Fed pares back speculation over rate cuts. Growing increasingly inconsequential, the Fed's role as a force for moderating the world's economies continues to be diminished. Chairman Powell and his cohorts may like to believe they have magic monetary powers, but their involvement in the continued loss of purchasing power of the U.S. dollar proves that they are nothing more than financial alchemists, counterfeiters to the world.

Spreads:

Oil/Gas

WTI crude oil closed out the week in New York trading at a price of $58.38 the lowest level since February 5, 2021 ($56.85).

The Strategic Oil Reserve took in just over a million barrels recently, as President Trump is beginning to refill essential oil storage facilities after Joe Biden cynically drained them over the past four years.

Despite steady declines in the price of oil, gas prices remain stubbornly high. Except for the first two days of April, WTI crude prices have been below $70 for two full months and have been below $65 for the past month yet gas prices are higher than they were mid-March and well above levels seen in December of last year when WTI was in the mid-$60s and the national average was close to $3.00. Regular drivers are wishing the people in the energy business would stop peeing down their backs and telling them it's raining. With oil prices trending into the $53-57 range, gas prices should be well under $3.00 already on a national basis and heading lower. Ravaged by inflation the past two to three years, consumers are growing impatient and are tired of hearing excuses about refining capacity and shortages that don't exist.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump at $3.14, two cents higher than last week. The expectation for the national average to fall below $3.00 soon has not been proceeding according to basic supply and demand dynamics. The best thing the United States could do for its economy would be to promote building - or at least revamping existing - refineries, something that hasn't been done in 30-40 years. Big energy companies are not about to commit the billions needed for what would be a development that should be undertaken, thus, it won't be.

Gas prices continued to fluctuate across the most of the country, the top price retained by California at $4.73, down another two cents on the week. Mississippi reclaimed the low spot from Oklahoma, cheapest in the nation at $2.63, edging out Louisiana ($2.67) by four cents. Texas ($2.72) and Oklahoma ($2.73) were next. Outside of Georgia, North Carolina, and Florida the Southwest continues to be the cheapst region, with Tennessee, Alabama, Arkansas and South Carolina all in a range of $2.69-2.75. Florida remains the outlier at $3.08.

Outside of Pennsylvania ($3.34) and Maryland ($3.14), New England and East coast states all range between $2.86 (New Hampshire) and $3.06 (Vermont, New York).

Midwest states are led by Illinois ($3.35), the price six cents lower than last week. Kansas ($2.83) is the lowest, followed by Kentucky ($2.85) and Missouri ($2.87). Ohio ($3.14) Indiana and Michigan ($3.20) each jumped higher. All other states in the region are just below $3.00.

Along with California, Washington is the only state above $4.00, stable at at $4.23. Oregon ($3.86) and Nevada ($3.74) continue seeing slight price declines. Arizona checks in at $3.29, though neighboring New Mexico is a bargain at $2.80. Idaho and neighboring Utah are both at $3.26, both pennies higher this week.

Sub-$3.00 gas can be found in fewer states this week, with at least 25 hitting the mark. Prospects for lower gas prices remain unfulfilled.

Bitcoin

This week: $95,497.28
Last week: $93,927.10
2 weeks ago: $84,240.61
6 months ago: $69,121.93
One year ago: $63,928.80
Five years ago: $9,699.13

The fascination with vapor-ware crypto-currencies found new life this week. Even as the centuries-old store of value, gold, was being devalued, bitcoin grew legs and vaulted toward the $100,000 mark once again. However, bitcoin "hodlers" and the whales which control its price cannot have it both ways. Either bitcoin stands as a replacement of value and a medium of exchange for the failing U.S. dollar or it doesn't. If gold is not preferred, then, according to the bitcoiners, crypto will be the way forward.

Somehow, this line of thinking is flawed. Bitcoin adoption is stillborn. There has been no advancement in its use as a medium of exchange for years. When PayPal adopted it in 2020, there was instant price appreciation, but then a relapse. From the end of 2022, bitcoin followed roughly the same path as gold, straight up, to new heights, much of it based upon SEC approval of spot ETFs at the behest of Wall Street backroom operators. Since peaking in late January, bitcoin has declined, just recently rebounding. The continued decline of ethereum and other alt-coins suggests that bitcoin stands alone as the speculative leader in a very suspect space.

Bitcoin has not been over $100,00 since February 4. It's possible that the entire crypto space is fracturing. Bitcoin's oft-referenced enabler, Ethereum, is down 45% year-to-date. Crypto as a general economic concept may be beginning to be exposed as an extended techno-pulsed Ponzi vaguely similar to tulip bulbs or the delusions of Bernie Madoff. Bitcoin's price ultimately is an amalgam of speculation, greed, the madness of crowds, large-bodied manipulation, money laundering, and Wall Street slush fund interference. Beyond the facade, there is empty space.

Precious Metals

Gold:Silver Ratio: 100.91; last week: 99.89

Per COMEX continuous contracts:

Gold price 4/6: $3,056.10
Gold price 4/13: $3,254.90
Gold price 4/20: $3,341.30
Gold price 4/27: $3,330.20
Gold price 5/2: $3,247.40

Silver price 4/6: $29.52
Silver price 4/13: $32.19
Silver price 4/20: $32.54
Silver price 4/27: $33.34
Silver price 5/2: $32.18

Despite gold and silver being summarily devalued on the COMEX the past week, Money Daily's weekly survey of prices on eBay revealed some intriguing dynamics in the retail trade. Though the "official" price of precious metals has been generally discounted recently via LBMA spot fixing and the usual shorting regime on the COMEX after gold hit a high just above $3,500 and silver touched $34 pr ounce, retail purchasers have not been deterred, with prices maintaining high valuations on the eBay platform.

It's worth considering that gold bugs and silver stackers alike may not consider the generally-accepted pricing mechanisms as legitimate, especially with the emergence of metals exchanges emerging in places like Shanghai, Moscow, Dubai, and Singapore. While buyers of one ounce coins and bars may not be as sophisticated or deep-pocketed as their central bank counterparts in global markets, they may be more attuned to international trends than people in the business suspect.

Both gold and silver have been appreciating at a rapid pace since October, 2022, and even more rapidly the first four months of 2025, the pullback over the past week on the COMEX, in particular, has been largely based upon a narrative that Trump's tariffs are not going to produce a recession or any great disruption to trade, and any danger of an economic "event" may have been overstated.

What precious metals buyers do understand is that the next economic crisis will be one of a monetary sort, involving currency debasement, with the U.S. dollar as the key factor. President Trump's trade policies are encouraging a weaker dollar, so that, even though the U.S. economy appears balanced and growing, the purchasing power of the currency continues to decline (some believe swiftly), thus, trading fiat for honest money (gold and silver) still appears to be the most rational trade-off.

As the legitimacy of status quo institutions like the LBMA, COMEX, and even the U.S. Federal Reserve are challenged, the inclination toward safety and security in precious metals is enhanced. There isn't an expert alive who believes a gold:silver ratio of 100:1 is reasonable or rational. A reordering of the global financial system is still envisioned as probable in the near future of the next three to five years. While that time stamp may be debatable, the tendency is towards not just a restructuring of the now dead-and-buried Bretton Woods construct, but a complete tear-down and rebuild of international finance.

BRICS+ is a force representative of a reckoning that cannot be discounted. Their role, and that of the United States, is fundamental to any new paradigm that may emerge. The groundswell in favor of multi-polarity and inclusion of emerging economies in world finance and trade has gained traction, Whether a new system with gold at its core emerges remains to be seen. From the perspective of precious metals adherents, a gold standard is the most desirable outcome.

Without some base monetary unit such as gold, the expectation for chaos and continued uncertainty and division is evident. There's some possibility that the world's powers - the U.S., China, Russia, India, and possibly Brazil - will attempt some kind of compromise, which would likely fail, before eventually getting it right.

In the interim, gold and silver are more likely to appreciate in value than decline in importance no matter the politics. Silver's value as a monetary and industrial metal cannot be understated. Whether the political climate is stable or chaotic is not likely to upset the trend toward further price advances. The belief that the recent price pullback is based on a more orderly world is likely to be found wanting as the evolution of money commences.

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:	32.95	45.00	39.51	40.00
1 oz silver bar:	37.00	47.19	41.64	40.78
1 oz gold coin:	3,328.16	3,491.99	3,402.86	3,390.61
1 oz gold bar:	3,350.00	3,426.99	3,396.31	3,406.69

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell back during the week, to $40.48, a $1.48 decline from the April 27 price of $41.96 per troy ounce.

Premia remain high. When (if) the silver shortage ultimately becomes unmistakable, the price gains will be explosive.

WEEKEND WRAP

If it ever stops raining, there might be rays of hope for what remains of Sunday.

At the Close, Friday, May 2, 2025:
Dow: 41,317.43, +564.47 (+1.39%)
NASDAQ: 17,977.73, +266.99 (+1.51%)
S&P 500: 5,686.67, +82.53 (+1.47%)
NYSE Composite: 19,386.68, +336.84 (+1.77%)

For the Week:
Dow: +1203.93 (+3.00%)
NASDAQ: +594.79 (+3.42%)
S&P 500: +161.46 (+2.92%)
NYSE Composite: +466.88 (+2.58%)
Dow Transports: +580.48 (+4.30%)

Friday, May 2, 2025

BLS April Jobs: +177,000; Dow, S&P Riding 8-Day Winning Streak; NASDAQ Up 6 of Last 8 Sessions; Gold WTI Crude Oil Lower

Recently, volatility and uncertainty over the condition of tariffs on most nations exporting to the U.S., but especially China, the EU, Canada, and Mexico, have played havoc on stocks, sending them hurtling lower after President Trump's "Liberation Day" announcement on April 2, then rebounding after the president announced a 90-day pause and since bouncing hither and fro.

Most of that seems to be fading, the major indices having, as of this week, regained all the earlier losses and looking for impetus to trade higher, possibly from earnings reports, improved conditions with China, or other economic news.

Being the first Friday of the month, the BLS dutifully released its monthly Non-farm Payroll report, which showed the U.S. had gained 177,000 jobs in the month of April, with the unemployment rate holding steady at 4.2%. So much for the recession argument and hopes for a cut to the federal funds target rate next week at the Fed's FOMC meeting (May 6-7).

Despite Wednesday's minor trifling over the initial first quarter 2025 GDP estimate of -0.3%, markets have returned to a positive tilt, as Trump's policies begin taking hold on the general economy. Between government layoffs, firings, and other employment separations, including more than 70,000 bureaucrats taking the administration up on early retirement, deportations of criminal elements from foreign countries, and the beginnings of some trade deals emerging, there seems to be improved optimism overwhelming the waves of fear and uncertainty that gripped markets in April.

Among the casualties during the last two weeks of improved sentiment are gold and oil. The price of gold had reached a record just beyond $3,500 on April 21. Yesterday, it had dropped as low as $3,212, and is gaining Friday morning, back to around $3,265, but with the lifting of the cloud of uncertainty, there is at least some relief in COMEX markets and at retail shops from the torrid run gold has had since November 2022, roughly doubling in value in about 30 months' time. Silver had also performed well, nearly doubling over a similar time period from around $18 to as high as $35 recently. Being an industrial metal, silver is holding its own, trading around $32.75 on the COMEX.

WTI crude oil hit a low of $56.53 on Thursday, May 1, the lowest price since February, 2021, which, coincidentally is just after Joe "Brandon Bribem" Biden was inaugurated. Between Trump's "drill, baby, drill," messaging and OPEC recently raising production limits, oil's price is in a bear market and probably will head even lower, another benefit for the U.S. economy.

Apple and Amazon reported Thursday after the bell, both with some disappointment, though the market will likely shrug off any deleterious effects.

Stock futures had been positive but drifting lower prior to the jobs announcement, and really took off when the numbers were released. At 9:00 am ET, Dow futures: +430; NASDAQ futures: +218; S&P futures, +63.

Stocks are looking to close out another positive week. Through Thursday's close, the Dow was up 639 points, NASDAQ, plus 327, and the S&P 78 points to the good.

Things are looking up, especially with the Kentucky Derby on Saturday. The March Issue of IdleGuy.com has a number of horse-related features including picks for the nine stakes races at Churchill Downs, including the Kentucky Derby.

At the Close, Thursday, May 1, 2024:
Dow: 40,752.96, +83.60 (+0.21%)
NASDAQ: 17,710.74, +264.40 (+1.52%)
S&P 500: 5,604.14, +35.08 (+0.63%)
NYSE Composite: 19,049.84, -64.39 (-0.34%)

Thursday, May 1, 2025

GDP Was Dragged Down by Import Surge; Trump's First 100 Days Rock Solid; Economy Nowhere Near Recession

Wednesday's 1Q GDP first estimate should have changed many market participants' minds concerning their overall outlook and investing strategy, but not in the way one might think. The -0.3% print should have been viewed in a positive manner as opposed to the knee-jerk negative, "recession ahead" attitude.

The reason the -0.3% initial estimate should be a positive for the market is because the major component of the downside was the subtraction of imports, as companies beefed up inventory ahead of President Trump's expected tariffs. The surge of imports amounted to -5% in the calculation of GDP. All else being equal, the first quarter of 2025 was not bad at all if one excludes or excuses the rush of imports as possibly a one-time event.

For those believing the opposite, that the contraction in the first quarter is a sign that recession is close at hand and that the U.S. economy is overdue for one, that may be a faulty conclusion. Truth be told, the U.S. did have a recession recently, specifically in the first and second quarters of 2022, when GDP registered -1.0 and +0.3%. The Biden folks, keen on painting a picture of a healthy U.S. economy as midterms approached, goosed government spending in the 2nd quarter especially and re-defined what constituted a recession, which, prior to their "refinement" of the term, was two quarters of contraction. Given that the first quarter did contract and the second quarter would have contracted if not for fast action on the part of the corrupt to the core Biden administration, it can safely be assumed that the U.S. economy had a recession just three years ago, and thus is not overdue or close to another one.

Beyond the rhetoric out of the mainstream media that it appears not many on Wall Street are buying into, Wednesday's numbers - including the paltry 62,000 jobs created in April according to the ADP survey - fostered some positive emotions. Stocks erased early losses and ended up in positive territory, except for the NASDAQ, which just missed. The Dow shrugged off a nearly 800-point loss to finish ahead by 141. The S&P, down 225 points just before 10:00 am ET, ended up 8 points. The NASDAQ was down 465 points but finished with a minor loss of 14.98 points.

The small number of jobs created, per ADP, was quite frankly due to Trump's tariffs and the uncertainty surrounding trade and commerce. Many businesses put hiring on hold during the quarter, which would help explain the anemic numbers for April. When one considers the number of job openings that will become available once the deportations of people other than criminals commences, the U.S. employment picture looks fairly rosy.

With the GDP now in the rear view mirror, the focus will be back on earnings and Friday's Non-farm payroll data. The NFP isn't likely to cause much turmoil whether it's good or bad because of the tariff uncertainty. Wall Street pros can deal with that just fine. Earnings continue to roll in and late Wednesday and early Thursday some substantial companies reported.

Briefly:

Prudential (PRU): small beat on EPS, stock trading flat pre-market
Microsoft (MSFT): EPS of $3.46, topped estimates, +8% pre-market
Meta Platforms (META): huge EPS beat ($6.43), +6% pre-market
CVS Health (CVS): huge EPS beat ($2.25), +8% pre-market
Mastercard (MA): small EPS beat ($3.73), +1% pre-market
McDonalds (MCD): EPS and Revenue miss, same-store sales down, -4% pre-market

Other than McDonald's selling less of what they try to pass off as food, the earnings are looking quite strong, especially in the two Magnificent 7 stocks, Microsoft and Meta. Will this trigger another round of tech buys? Sure looks like it. Will the gains continue, and put the losses from the first quarter and April behind? Probably.

Wall Street, as is well-known, likes its toast buttered on both sides. They can put positive spin on the worst economic news, lipstick up the fattest pigs, so, with what appears to be mostly good news, it should be clear sailing to chug ahead toward the November and January highs. It's hardly nothing to ask for from the titans of tech and the money moguls. They've made plenty on the way down and will be happy to make more - and share the wealth - on the way back up.

The May issue of idleguy.com has a money page feature with tips and strategies for investing in turbulent times such as these that is worth a look.

Onward and upward. Trump's first 100 days have been impressive and he's just getting started.

At the Close, Wednesday, April 30, 2025:
Dow: 40,669.36, +141.74 (+0.35%)
NASDAQ: 17,446.34, -14.98 (-0.09%)
S&P 500: 5,569.06, +8.23 (+0.15%)
NYSE Composite: 19,114.23, +25.02 (+0.13%)

Wednesday, April 30, 2025

1Q GDP Contracts -0.3%; Wall Street Shocked and Dismayed as Trump-Haters Rejoice; ADP April Jobs, +62,000; Stock Futures Crater

...and now, the moment we've all been waiting for, the initial estimate of first quarter 2025 GDP.

At 8:30 am ET, the Bureau of Economic Analysis released their best guess (after all they're experts), suggesting that GDP in the US contracted at an annualized rate of -0.3%, the contraction below the top ten lowest Wall Street estimates but far better than the latest Atlanta Fed's GDPNow estimate of -2.7%.

Wall Street analysts' range of -0.4 to +1.4 came in at the low end of those estimates, a condition that falls very much in line with the ongoing mainstream media belittling and denigration of President Trump's first 100 days in office.

Stock futures went from bad to worse prior to the readout, suggesting that the negative number was somewhat expected or that it had been leaked to select market participants prior to the general public release. For instance, NASDAQ futures were down 219 points just one minute prior to the announcement, and fell further when the actual number was exposed. In the half hour before the release, Dow futures had fallen from +35 at 8:00 am ET to -94 at 8:29 am ET. Minutes later, at 8:45, Dow futures were down 345, NASDAQ futures had shed 375, and S&P futures were losing 75 points.

The negative GDP figure puts somwhat of a lie to the recent six-day rally on the S&P and Dow as well as the general "we've bottomed" narrative that had been in vogue the past few weeks. The GDP number, which is likely fudged to some degree in an attempt to soften the blow that the U.S. economy is a less than perfect, turns sentiment deeper into the negative, though it is worth noting that a surge in imports accounted for most of the drop-off. For what it's worth, the U.S. economy may be far stronger than the headline number suggests. Time will tell, with revisions in the second and third estimates late May and June, followed by second and third quarter results, the result could easily become one of strength once the tariff trauma is over, millions of illegals are deported and government downsized sufficiently.

Prior to the GDP announcement, ADP released its April Employment Report, showing U.S. public sector job growth of 62,000, the lowest since July 2024, and well below trend dating back to the secondary low of December 2022. All three months - February, March, April - since Trump was inaugurated have been well below the big numbers reported during the Biden administration. The media is certain to portray this, along with Friday's Non-farm Payroll data and today's GDP slump as the President doing a "very, very, very bad job on the economy, hurting millions of Americans."

The alternative reality upon which the MSM thrives runs counter to the general understanding that between tariffs, downsizing government (DOGE is saving taxpayers roughly $1.6 billion per week), and deporting illegals, the obvious effect was going to be a healthy degree of disinflationary pain, weaning the U.S. economy off the easy money from the Fed and government handouts to citizens and non-citizens alike, the effective "sugar high" in economic data.

Elsewhere, Starbucks (SBUX) showed a big EPS miss for the first quarter, posting 0.41 on expectations of 0.48 per share. Same store sales in the U.S. and China were both down for the quarter as the company continues to try to resurrect the brand that brought overprice coffee drinks to the public over the past 25 years. Shares are down more than 10% in pre-market trading.

Other companies reporting after the close Tuesday and early Wednesday include:

Snapchat (SNAP), down 15% pre-market, pulling forward guidance
Visa (V), EPS beat, revenue up, down 2% pre-market
Hess (HES), down 2% pre-market
Caterpillar (CAT), EPS miss, up 2% pre-market
Humana (HUM), EPS beat, up 6% pre-market

Having fun yet?

At the Close, Tuesday, April 29, 2025:
Dow: 40,527.62, +300.03 (+0.75%)
NASDAQ: 17,461.32, +95.19 (+0.55%)
S&P 500: 5,560.83, +32.08 (+0.58%)
NYSE Composite: 19,089.21, +117.48 (+0.62%)

Tuesday, April 29, 2025

Monday's Dump-and-Pump Reeks of Institutional Exasperation; Tariff Issues Need Resolution

Trading got off to a slow start Monday as the month of April - a downbeat one overall - approaches an end. The three major indices - Dow, NASDAQ, S&P - got a bit of a boost at the open, slumped all morning, then miraculously moved higher into the close, extending the winning streak for the Dow and S&P to five straight sessions.

The NASDAQ, down more than 200 points midday, rallied to briefly turn positive nearing the session's close, but ended just short. Gains on the Dow and S&P were marginal, indicating the rally through the heart of earnings season may be running out of gas.

Speaking of earnings, a good cross-section of American firms reported after the close Monday and prior to Tuesday's cash session.

Here's a brief rundown of some of the first quarter results:

Waste Management (WM): revenue slippage in 1Q; pre-market, -1-2%
Rambus (RMBS): small EPS beat; pre-market +2.5%
Transocean (RIG): -0.07 EPS; $2.80 stock (pass)
Nucor (NUE): EPS 0.77 (beat); shares flat
Teradyne (TER: EPS 0.75 (beat); -1.7% pre-market
Coca-Cola (KO): EPS 0.73 (small beat) +1% pre-market
Altria (MO): EPS 1.23 (beat); -2.5% pre-market
Pfizer (PFE): EPS 0.92% (beat); shares flat
PayPal (PYPL): EPS 1.33 (beat); flat
UPS (UPS): EPS 1.49 (beat); +1.35% pre-market
JetBlue (JBLU): EPS: -0.59; -2% pre-market
Spotify (SPOT): EPS miss; Cramer likes; -6% pre-market
Royal Caribbean (RCL): suprise guidance, +3.5% pre-market

Mostly, earnings were drab, except Royal Caribbean, which had a solid quarter and surprised with strong forward guidance.

Stocks can probably maintain prices at these levels (still down for the year), unless first quarter GDP comes in at a negative number. That's for Wednesday, along with the latest PCE Index and more earnings (Starbucks after close today; Caterpillar before open tomorrow).

The market seems to have grown weary of the tariff trades and is seeking some kind of resolution, which, naturally, will be months or years in the making. There's plenty of pessimism to go around, but enough optimism to keep stocks treading water until the next major event, be it positive or negative. While it would be a mistake to underestimate the degree by which President Trump will shake things up, it is equally dangerous to underestimate his potential for winning on trade, taxes, spending cuts, and a trimmed down 2026 budget.

That said, futures are slipping into the open, with the Dow +27, NASDAQ -117; S&P -22.

At the Close, Monday, April 28, 2025:
Dow: 40,227.59, +114.09 (+0.28%)
NASDAQ: 17,366.13, -16.81 (-0.10%)
S&P 500: 5,528.75, +3.54 (+0.06%)
NYSE Composite: 18,971.73, +71.93 (+0.38%)

Money Daily

Sunday, May 18, 2025

WEEKEND WRAP: Stocks Explode Higher; Gold Continues Decline; Treasury Market Stressed on Moody's Downgrade; Bitcoin Stalls

Saturday, May 17, 2025

Buy-and-Hold and Buy-the-Dip Have Been Enormously Profitable; May Become Even Better as Trump Upends Global Commerce

Thursday, May 15, 2025

Deflationary Trends Dominate Data Drop; PPI Checks in a -0.5% MOM, Lowest in 5 Years; Walmart Warns on Revenue Miss

Wednesday, May 14, 2025

Stocks Pause After Impressive Three Weeks; Oil's Rise Contrary to Recent Trends; Trump, Tech Titans Making Strides in Middle East

Tuesday, May 13, 2025

Is the Bottom In or Was Monday's Rally a Bear Market Bump?; CPI Lowest in Four Years; Gold Lower, Crude Oil Soaring

Sunday, May 11, 2025

WEEKEND WRAP: Dullest Week of the Year Comes as Welcome Relief; Bitcoin Powers Past $100,000; Trade and Tariff Talk Toned Down

Friday, May 9, 2025

Bitcoin Surges Past $100,000 as Senate Rejects GENIUS Act, Killing Crypto Legislation

Thursday, May 8, 2025

Stocks Continue to be Grossly Overvalued; Corruption is Unabated; Earnings Don't Matter

Wednesday, May 7, 2025

Markets Remain Volatile as China and U.S. Annnouce Tariff Talks; Disney Rockets Higher; Jim Cramer, John Maynard Keynes Advise Standing Still

Tuesday, May 6, 2025

Stocks Start Week Gloomier; Nine-day Streak Ended as Fed Prepares to Do Nothing on Interest Rates; Stock and Oil Futures Lower; Gold, Silver Bid

Sunday, May 4, 2025

WEEKEND WRAP: Stocks Post 2nd Straight Week of Gains as Tariff Fears Abate, Jobs Growth Stable; FOMC Meeting on Tap; Gold, Silver, Oil Lower

Friday, May 2, 2025

BLS April Jobs: +177,000; Dow, S&P Riding 8-Day Winning Streak; NASDAQ Up 6 of Last 8 Sessions; Gold WTI Crude Oil Lower

Thursday, May 1, 2025

GDP Was Dragged Down by Import Surge; Trump's First 100 Days Rock Solid; Economy Nowhere Near Recession

Wednesday, April 30, 2025

1Q GDP Contracts -0.3%; Wall Street Shocked and Dismayed as Trump-Haters Rejoice; ADP April Jobs, +62,000; Stock Futures Crater

Tuesday, April 29, 2025

Monday's Dump-and-Pump Reeks of Institutional Exasperation; Tariff Issues Need Resolution

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