In overnight trading as a delegation from the U.S. is meeting with a delegation from China, the China Manufacturing PMI remained in contraction for the seventh straight month at 49.7 and their Services PMI fell to 53.7, its lowest level since 2018. The underlying data suggests that China’s factory sector is likely to continue contracting … Read more
The Fed’s preferred inflation gauge, Core Personal Consumption Expenditures, came in lower than expected at +1.6% year-over-year. Incomes are rising at a rate of +4.9% annualized, while spending growth is slowing to +3.9% annualized. Savings rates are trending higher at +8.1%. Slowing inflation and flat Treasury yields is not a bullish recipe for gold, which … Read more
After investors jumped at the chance to buy stocks at all-time highs on Friday, stock prices have quietly fallen in early trading as investors await earnings from Apple and the outcome of the Federal Open Market Committee meeting on Wednesday. Treasury yields were also lower across the curve. Agricultural commodities have been trading in a … Read more
It is widely expected that following the conclusion of the Federal Open Market Committee (FOMC) meeting on July 31st, the Fed will cut the overnight bank lending rate, or Federal Funds rate, by a quarter percent. Selling the rate cut to the public is going to be a challenge since the Fed is allegedly “data-dependent” … Read more
Google’s earnings beat helped offset Amazon’s miss as tech stocks rallied in early trading. Investors were happy to hear Google will spend $25 billion on share buybacks and based on Google buying twenty-five percent of their average trading volume, it will take them sixty trading days to burn through $25 billion. Second-quarter GDP growth beat … Read more
Markets started out in a sea of red as investors were disappointed that the European Central Bank (ECB) has decided to wait for the economic forecasts prior to making any changes to monetary policy. ECB President Draghi did state there is a “need for a highly accommodative stance of monetary policy for a prolonged period … Read more
Stock investors ignored the bad economic news out of Europe and the poor earnings from Boeing and Caterpiller in early trading while Treasury yields did not, and headed lower. In overnight trading, the Eurozone flash PMI fell to 46.4 from 47.7 and the German manufacturing PMI fell further into contraction to 43.1 from 45 and … Read more
Stocks and Treasury yields started the day higher on reports that the debt ceiling will be suspended for the next two years, and that Congress will pass a budget before their summer recess. Those that understand how increasing deficits impact the financial markets already know that more debt and deficits are bearish for stocks and … Read more
In overnight trading, hopes of “V” shaped economic recovery were dashed as South Korea exports fell -13.6% and imports fell -10.3% on a year-over-year basis. In the first twenty days of the month, South Korea chip exports are down -30.2% and exports to China, critical for South Korea, are down -19% on a year-over-year basis. … Read more
Most investors and investment professionals have no clue how gold really works since they think of it purely as a hedge against inflation. To figure out how gold trades, investors have drawn comparisons to gold with the U.S. Dollar, cryptocurrencies, and even negative yielding government debt. The purpose of drawing comparisons is to find a … Read more