April 30, 2018
* N & S Korea agree to denuclearize!
* The dollar continues to be bought…
Good Day… And a Marvelous Monday to you. Not so much for me this morning, as I’m having some stomach problems to start the day. Hopefully they will dissipate and I can join you in this Marvelous Monday! What a bad trip to Pittsburgh for my beloved Cardinals last weekend UGH! I hear that my oldest son, Andrew, has some handicapped tickets to the game Friday night for me. YAHOO! You know me, I prefer day games, but an invitation to a game can’t be dissed! There’s a lot of stuff going on, I doubt I can get to all of it… Oh! And no Pfennig tomorrow, it’s a travel day for me… the Allman Brothers greet me this morning with their song: Blue Sky…
Well, here we go! We’ve got a Fed monetary meeting this week, the Jobs Jamboree on Friday for April, we had North & South Korean leaders shaking hands this past weekend, we’re still waiting for a definitive decision from the U.S. President on the Iran nuclear deal, and there’s some money missing in Philadelphia. These and maybe some more thoughts from me today, and maybe I won’t even be able to get to these! So, let’s get started and when my battery runs out, well, we’ll cross that bridge when if we get there!
First, the Fed meeting On Wednesday, i read some research this past weekend that talked about how the Fed just might hike rates at this meeting, given the sudden spike in PCE (Personal Consumption Expenditures) The Fed’s preferred inflation calculator. There’s been little talk from the Fed Head speakers about a rate hike in May, instead most talk about a rate hike in June. So, moving like this unexpectedly, could prove to be damaging for the psyche of the markets, in my humble opinion that is… I see a rate hike in two days to be the Fed signaling that they are behind the 8-ball with regards to rising inflation… Now, that’s a calming thought isn’t it?
The currencies continue to get sold VS the dollar this morning. This really burns me up… A couple of weeks ago, the dollar was ready to go on a very long trip on the Slippery Slope, but then the “gentle hands” stopped the dollar selling, a short squeeze started, and now after all that, the panic sets in among investors in the currencies that this dollar buying isn’t going to end… Whoa, there partner! I’ve always told you that a trend is not a ONE-WAY Street, that there can be volatility within the trend haven’t I? Why, yes, Chuck, you have probably said that 100 times through the years…
Of course this doesn’t make the dollar buying go away… And now Lola, aka Goldman Sachs is saying the Aussie dollar is going to fall to 72-cents! You see there’s a banking scandal in Australia that’s being played out on TV in OZ… It’s a nasty banking scandal, that might stretch its tentacles to other countries before it’s all said and done… I’m watching it unfold, and thinking… I would bet the same thing is going on all over the world, including the U.S.! Well, we all know that what Lola wants, Lola gets, so hold onto your hats, and get ready for a storm in the Aussie dollar (A$)…
The dollar buying is so strong right now that even the second consecutive month of the price of Oil rising isn’t enough to offset the dollar strength, and the petrol currencies are thrown in with the rest of the currencies seeing weakness. The Norwegian krone, which when the euro was rising along with the price of Oil, was looking very good, but now that the euro has hit a speed bump, the krone has seen enough selling to bring it back to an 8 handle… UGH!
Speaking of the price of Oil… It’s not as perky in price as it was last week, but it still has booked another monthly gain, marking two consecutive months of gains for the bubbling crude, black Gold, Texas Tea… A lot of the thing that’s helping the price of Oil to get bid upward, is this Iran Nuclear Deal… Apparently, May 12, is the cutoff, and there are Oil buyers that won’t book deals after that day, not knowing what the end process is going to be for the U.S. in the deal.
Did you see the leaders of N. and S. Korea shaking hands and acting like longtime buddies? Well, they supposedly, signed a deal to denuclearize the peninsula of Korea, which is a good thing in my book, but can we really trust the leader from N. Korea? I tend to doubt that we can… But I guess this is a wait-n-see, eh?
Gold continues to get hammered almost daily these days. The shiny metal did gain $6.30 on Friday, as the price manipulators must have taken the day off, as only 232,000 contracts traded. Unfortunately, Gold is back on the chopping blocks in the early morning trading today, and is down $8…
I had a dear reader send me a note last week, with his opinion that the main culprits in the Gold price suppression game is China and Russia, for they continue to back up the truck and buy large amounts of physical Gold each month, and they love it that the price of Gold remains stuck in the mud and unable to trade past $1,350… I told him that while I’ve thought of this before scenario before, I just can’t get my arms around it, for there has been no “claims to this scenario by anyone other bloggers” And I’ve got the proof of U.S. involvement from the WikiLeaks memos I’ve printed before and given readers the links to.
The U.S. Data Cupboard is chock-full-o-data this week, culminating in a Jobs Jamboree on Friday. Tomorrow we’ll see two of my fave prints, when Personal Income and Spending for March prints. Last Friday, the first reading of GDP for the 1st QTR printed, and I was laughing so violently when I saw the headlines that I about fell out of my chair… Apparently, somewhere along the way, we are being led to believe that 2.3% annual growth is to be considered as “strong”, for that’s what the report called this print! You’ve got to be kidding me, I said out loud! And let’s not forget that the first print of GDP usually gets brought down with the revisions that will come in the coming weeks.
It’s the trophy for everyone scenario, the dumbing of America, the let’s settle, that’s taking hold of this country, folks… 2.3% is strong? I have to tell you that it isn’t, and shouldn’t ever be considered strong again! But it will, because we’ve grown to be accepting to this babble… I shake my head in disgust…
I received a treat on Friday last week, from my good friend, and longtime boss, Frank Trotter… Back in the 90’s websites were just beginning to become something that every company needed to have, and the old Mark Twain Bank was no different. So, Frank built the website for the bank, and decided that the website needed content that changed daily to keep brining people back to the site. And that’s wen he decided that my Daily Pfennig letter would be perfect! Before that, the Pfennig was being sent to readers via fax machines… Pretty archaic, eh? Any way, Frank sent me a link to the old Mark Twain Bank archives, and in it were a month of Daily Pfennigs! You should see them! They were short and to the point, and included a picture of me, which shows me with hair! HAHAHAHA!
I highlight one of those Pfennigs from May 1997, in this week’s Dow Theory Letters that will print this coming Thursday. That picture of me from 1997 is worth the price of admission folks! And I hear that the Aden Research people are still offering an introductory price of $69 for 3 months, hint, hint… check it out at www.dowtheoryletters.com
That Frank was always full of surprises! When I talked to Frank a couple of weeks ago, he sure looked relaxed and enjoying his retirement! Good for him!
To recap… The dollar is still being bought as we start the week, and the currencies are getting sold along with Gold. The price of Oil will book a 2nd consecutive month of gains this month, but even this rise in the price of Oil can’t help the Petrol Currencies. Lola says that the A$ is headed south, and what Lola wants, Lola gets, right? N and S Korea agree to end nuclear development, who here thinks that the N. Korea leader had his fingers crossed behind his back?
For What it’s Worth… I talked last week about the scenario where sanctions to Russian aluminum could be removed, and the folks at zerohedge.com ran this story last week, thus removing the barrier that was holding up the removal of sanctions on Russian aluminum… And it can be found here: https://www.zerohedge.com/news/2018-04-27/deripaska-agrees-resign-rusal-will-sell-controlling-stake
Or, here’s your snippet: “Just 24 hours ago, Bloomberg reported that “Oleg Deripaska Plans on Keeping Control of Rusal”, a move which suggested that the Russian oligarch would remain defiant in face of U.S. demands that he sell his stake and/or step down as head of United Co. Rusal – the world’s biggest aluminum producer outside of China – even as the Russian aluminum giant battles for survival having lost capital markets access following the sanctions.
Or maybe not: overnight we got a first indication that Bloomberg’s report was incorrect when Rusal published a Facebook post denying the Bloomberg claim that Deripaska was intent on keeping control over Rusal, and threatened to take “legal action”
And then, moments ago, we got definitive confirmation when EN+, which holds a controlling stake in Rusia, announced that Deripaska had in fact agreed “in principle” to cut his stake in EN+ to below 50%, and that the sanctioned Russian billionaire had agreed with the proposal that he will resign from board.
As EN+ also adds, the company is seeking an urgent response to the formal request submitted to OFAC, and notes that without an extension of “authorization period for General License No. 13″, the ability of the company to maintain GDR listing on LSE will be materially impacted.”
Chuck Again… Maybe this news will help the ruble to wrap a tourniquet around the currency to stop the bleeding?
Currencies today 4/30/18… American Style: A$ .7540, kiwi .7040, C$ .7768, euro 1.2078, sterling 1.3724, Swiss $.9912, European Style: rand 12.4426, krone 8.00, SEK 8.6962, forint 259.45, zloty 3.4972, koruna 21.1432, RUB 62.15, yen 109.37, sing 1.3258, HKD 7.8482, INR 66.44, China 6.3333, peso 18.73, BRL 3.4567, Dollar Index 91.84, Oil $67.39, 10-year 2.96%, Silver $16.39, Platinum $905.48, Palladium $969.97, and Gold… $1,314.70
That’s it for today, and I’ll talk to you again on Wednesday… We didn’t get everything we came down here to do accomplished but it wasn’t any of our lack of trying… Red tape, and dolts is all I’ll say about that… I might be spending the month of June down here, we’ll have to wait-n-see how everything progresses at this point. Where have the bats gone? Someone please find them and return them to the Cardinals! The White Sox come to town for a quick two-game series this week, and interleague play begins for the Cardinals. Bad Company takes us to the finish line today with their song: Can’t Get Enough… I hope you have a Marvelous Monday, and please Be Good To Yourself…