April 3, 2019
* Dollar holds its gains during the day yesterday…
* But the currencies fight back in the overnight markets!
Good Day… And a Wonderful Wednesday to you… Well, as I predicted yesterday, the first part of the day here was beautiful, and then later a heavy downpour came, but went quickly, and soon the sun was shining again! I think I’m beginning to believe that I can predict the weather down here better than the meteorologists! HA! Isn’t that the way it always is: Someone believes he can do a better job than the person holding the job? Give them the keys, and let them drive, we’ll soon see just how good they are! No baseball for hockey for me last night… The Rolling Stones greet me this morning with their song: Wild Horses…
Well, we start today the same as we have for the past week… The dollar bugs continue to have their way with the currencies and metals… I have to say this right here, right now… I truly believe and always have that the U.S. Gov’t is behind the price manipulation of both the dollar and the metals… Sure, it’s the likes of the JPMorgans that do the dirty deed, but the way I see it, is they get the wink and nod from the government, and the government keeps the regulators off their backs… It goes back to those WikiLeaks papers I presented to you years ago… Where, oh, Chuck forget about it, either the readers are believers or non-believers… And I can’t change their minds…
OK, I had to get that off my chest, because things are becoming more and more frustrating to me on a daily basis… So much so, that I can easily get myself all riled up reading articles, but have been able to, so far that is, stop and do something else when I feel my blood pressure rising…
Gold was able to gain $4.80 on the day, but in my eye, this is small potatoes compared with what should be happening.. We have a Trade War going on… We have the U.K. failing miserably at leaving the EU… We have debt everywhere… We have tons and I mean tons of negative yielding bonds in the world… And wars going on that never seem to end, and Gold can’t find a bid on a daily basis? I shake my head in disbelief, and disgust, but that’s doesn’t change anything, Chuck… So, chin up, Wilbur!
The overnight markets have been much kinder to the currencies than they received during the day yesterday… The euro has pushed to a 1/2-cent gain, and the Aussie dollar (S$) is back above 71-cents this morning. All-in-all, things look a little better this morning than they did all day yesterday! Maybe someone with an ounce of gray matter looked at the U.S.’s data cupboard and decided holding dollars just didn’t seem like the thing to do… maybe?
On the Data Cupboard front yesterday, we had the Durable and CAPEX Orders for February… let me see if economist guru, David Rosenberg had something to say about the negative CAPEX orders… This from his Twitter feed: “Core capex orders dipped 0.1% in February and have declined now in three of the past four months. Over that time, they have contracted at a 3.5% annual rate. Nothing I see tells me Q1 weakness was transitory.” – David Rosenberg on Twitter 4/2/19
For those of you new to class… CAPEX stands for Capital Expenditures… And this is where I find that most of my thinking about a coming recession comes from… You see, I learned in Economics 101 that Businesses should take their profits and invest in equipment, work places, people to insure economic growth for not only themselves but the economy as a whole. Without CAPEX, you have an economy that’s not growing, and one that’s not growing is soon to be contracting… Now, I’m not sure what you learned in Economics 101… But I learned from some of the greatest economic minds of our time… I’m just saying.
And now… we’re in that position of being able to say that CAPEX has been negative 3 of the last 4 months… And that doesn’t look good for the economy going forward… Recall the tax reform last year, and how it was supposed to get Corporations to invest in their respective companies, making CAPEX purchases, but I told you when the tax reform was announced that it wouldn’t be used for CAPEX, but instead these mental giants that run Corporate-America would be using the tax gains to buy-back their respective company’s stock… And so, that ends today discussion on CAPEX… aren’t you glad you sat through that? HA!
I was doing my daily reading yesterday, and came across an article on Reuters that sums up what’s been going on so far this year, quite nicely… They talked about how Currency Traders fret as sleepy markets slow to calmest in years… Yes, I would imagine that currency desks around the world are spending a lot of time cruising the internet at work these days…
Today’s Data Cupboard here in the U.S. has the ADP Employment Report for March, and is the precursor to the Jobs Jamboree which will take place on Friday this week… I wonder what the BLS has in store for us this week? Recall that last month they surprised everyone and their brothers with a very small 20,000 jobs created in February report… I would suspect that whomever released that report got called on the carpet, and told that the BLS does not deal in truths, and to go back and revise their numbers, for this month’s report…
And in BREXIT news… The articles on the subject seem to be more positive this morning, as U.K. PM May requests an extension… Anytime things look better on the BREXIT front, pound sterling gets to rally, and vice versa when things go sour…
To recap… Yesterday saw the dollar gain VS the currencies most of the day, but in the overnight markets things seemed to have shifted, and the euro fought back… Gold was able to gain $4.80 on the day, but Chuck is convinced that these kind of daily gains are small potatoes VS what he believes they should be. The U.S. Data Cupboard yesterday had some negative numbers for Durable and CAPEX Orders reports, and Chuck talks about how CAPEX orders are the root of the economy…
For What It’s Worth… In yesterday’s reading I came across an article on Reuters regarding Gold Sales at the Perth Mint, and thought it would be a good FWIW article, and when I went back this morning to find it… It was nowhere to be found (was I really on Reuters?) But Ed Steer saved the day, and he posted it in his daily letter: www.edsteergoldandsilver.com and you can find the article here: https://finance.yahoo.com/news/perth-mints-gold-sales-jump-09320
Or, here’s your snippet: “The Perth Mint said on Monday its gold products sales in March surged about 68 percent from the previous month, touching the highest level since November last year.
Sales of gold coins and minted bars in March rose to 32,757 ounces from 19,524 ounces in February, the mint said in a blog post.
Silver sales last month jumped 60.2 percent from the previous month and touched their highest since October last year at 935,819 ounces.
In March, benchmark spot gold prices posted their second straight monthly decline, falling about 1.6 percent, hurt by a strong dollar.
The Perth Mint refines more than 90 percent of newly mined gold in Australia, the world’s second-largest gold producer behind China.”
Chuck again… OK, so demand for physical Gold remains strong… where are the daily gains of Gold?
Currencies today 4/3/19 American Style: A$.7120, kiwi .6796, C$ .7516, euro 1.1247, sterling 1.3178, Swiss $1.0035, European Style: rand 14.1275, krone 8.5508, SEK 9.2636, forint 284.15, zloty 3.8157, koruna 22.8393, RUB 65.33, yen 111.50, sing 1.3525, HKD 7.8494, INR 68.94, China 6.7197, peso 19.13, BRL 3.8541, Dollar Index 96.99, Oil $62.76, 10-year 2.52%, Silver $15.14, Platinum $858.74, Palladium $1,426.21, and Gold… $1,291.81
That’s it for today… no sunrise to be seen this morning, as it’s very cloudy out right now… But the sun will be out later, I’m sure of that! So, how’s the start of the season going for your baseball team? My team is pretty shaky right now, but I think once they get their sea legs, they’ll be fine… Speaking of Teams… My pick for the NCAA Basketball Champion is Michigan St. (I had to pick them two weeks ago) And they’ll play in one of the two Semi-finals on Saturday… The Final Four day is a pretty exciting day for basketball fans… Weezer takes us to the finish line today with their song: Island In The Sun… catchy tune… I hope you have a Wonderful Wednesday, and will Be Good To Yourself!
Chuck Butler