Chuck Butler’s: A Pfennig For Your Thoughts
November 29, 2017
* Tax plan looks good to go…
* Dollar continues to get bought…
* Good data from the Eurozone!
Good day… And A Wonderful Wednesday to you! We have been treated to some of the nicest weather in November that I can recall… I sat outside for a bit yesterday to get some fresh air, and watch the neighbors come and go… I thought, at the time, that maybe I should get my laptop and do some research… And then another thought entered my brain, and that was to just sit and simply enjoy the day! I apologize for the tardiness of the Pfennig today, it was a rough morning for me… So, better late than never, I guess, eh? I’m greeted this morning by The Alan Parson’s Project and their song: Eye In The Sky…
I left you yesterday with the dollar being bought for some unknown reason that only the currency traders would know, and for us to attempt to figure out what’s going on in their collective heads. Well, the dollar buying continued throughout the day and through the night… The news that the Tax Reform is about to be a real thing, has really lit a fire beneath the dollar.
I really didn’t think our lawmakers would find a way to get this done before the Christmas break, and that we would go into the new year without one of the pillars of the Trump campaign. And that thought was fueling my call that by year-end the recession would be in place, and the Fed would be revisiting their recent rate hikes. I guess, as always, I’m ahead of the curve in my calls, and we’ll have to wait for the recession, that if you ask me, was helped to that position for the economy by the Fed… I’ve said this before, so it won’t be new to most people that read the Pfennig. But you don’t say you want to see inflation, and hike interest rates and unwind your balance sheet of bonds… But that’s what the Fed is doing, and it makes no sense to me!
And it should make no sense to the markets, but they’ve become sheeple, and obey the Fed’s directions… Which makes things difficult for a “markets guy” like me, who sees things and applies logic to them, and comes up with a normal “markets call”… If it just doesn’t seem to add up, then that’s when I point it out… But when the markets can’t see the forest from the trees and trades in a strange manner that has no logic, then we’re all lost…
And that’s when it’s time to batten down the hatches, and wait for the markets to correct… Or, as I used to hear my former colleague, and friend, Ty Keough, say to clients… “when the currencies are cheaper, you can buy more of them!” There was some news from the Eurozone this morning, breaking the silence.. Loans to nonfinancial corporations climbed in the 12 months to Rocktober, the strongest figure since June 2009, underscoring renewed confidence in the Eurozone economy.
But this news isn’t helping the euro recover this morning… In the old days of assets trading on fundamentals, this kind of news would have sent the euro soaring this morning… But in today’s world, sentiment is the King…
The trading in Gold was crazy wild yesterday with over 505,000 contracts traded, but… it was a rollover day from one month’s contract to the next. So, when this day comes around each month, you have to throw out the volume, because you just don’t know what’s a rollover VS a new trade. But when the day was through, Gold was up just 60-cents… That’s it, just 60-cents…
We’re getting closer each day to December, which is the month, that James Rickards called for the great Gold price reset, that I’ve talked about before. Remember what I told you… If you hear about a meeting being organized for leaders of countries or finance ministers, at Trump’s Florida humble home, this will be the signal that some BIG news for Gold is coming…
I’m not one to get all caught up in calls like that, but as Rickards points out, he’s got a good track record on calls that he’s made, so it will be interesting to see how this one plays out…
OK… The U.S. Data Cupboard had the previously talked about Trade Deficit, but also had the Case/ Shiller Home Price Index show an increase of 6.2% in Rocktober, up from September’s 6% increase. In addition, the Consumer Confidence index rose to an incredible number of 129.5 this month, up from 126.2 last month…
Today’s Data Cupboard says that the 3rd QTR GDP here in the U.S. was 3.3%… Yeah, right, and I’ve got a bridge to sell you… What a crock! But, like I said above, the markets don’t question anything any longer, and just take things a face value… UGH!
To recap… The dollar buying continued throughout the day yesterday, and overnight, as it appears that the Tax Reform Bill is growing near to reality… The Eurozone had some good data this morning, but it isn’t helping the euro turn the tables on the dollar buying.
For What It’s Worth… So, here’s something that one could use to debate the 3.3% rise in GDP, and can be found here: http://www.zerohedge.com/news/2017-11-28/recovery-we-have-tripled-number-store-closings-last-year
Or, here’s your snippet… “
Did you know that the number of retail store closings in 2017 has already tripled the number from all of 2016?
Last year, a total of 2,056 store locations were closed down, but this year more than 6,700 stores have been shut down so far.
That absolutely shatters the all-time record for store closings in a single year, and yet nobody seems that concerned about it. In 2008, an all-time record 6,163 retail stores were shuttered, and we have already surpassed that mark by a very wide margin. We are facing an unprecedented retail apocalypse, and as you will see below, the number of retail store closings is actually supposed to be much higher next year.
Whenever the mainstream media reports on the retail apocalypse, they always try to put a positive spin on the story by blaming the growth of Amazon and other online retailers. And without a doubt that has had an impact, but at this point online shopping still accounts for less than 10 percent of total U.S. retail sales.”
Chuck again… I’m not one to blame all this on Amazon folks… It has more to do with the price structures of malls, and people not wanting to deal with protesters when they go shopping, and most of all consumers getting in too deep with debt..
Currencies today 11/29/17… American Style: A$ .7561, kiwi .6887, C$ .7775, euro 1.1850, sterling 1.3418, Swiss $.9845, … European Style: rand 13.7035, krone 8.2317, SEK 8.3498, forint 263.09, zloty 3.5455, koruna 21.5060, RUB 58.35, yen 111.90, sing 1.3468, HKD 7.8087, INR 64.34, China 6.6024, peso 18.53, BRL 3.2180, Dollar Index 93.33, Oil $57.82, 10-year 2.38%, Silver $16.69, Platinum $949.47, Palladium $1,018.23, and Gold… $1,286.70
That’s it for today… and for this week… sorry, but tomorrow morning I have doctor appts. and my usual Thursday infusion, that is if my oncologist feels as though I’m good to go after my surgery… College football will have their conference Championships this Saturday… And then the bowl games will be announced, along with the final 4 for the playoffs. So a BIG weekend for college football. Our neighborhood Progressive Dinner will be this weekend, and for the first time since Mizzou played in the Big 12 Conference Championship about 10 years ago, I won’t be attending the party.. UGH! So… The Babys take us to the finish line today with their song: Back On My Feet Again, which could easily be my theme song right now! I hope you have a Wonderful Weekend, and Be Good To Yourself!
Chuck Butler