November 15, 2018
* Currencies rally, thanks to Chuck… HAHAHAHAHA
* The Bloom is off the real’s rose…
Good Day… And a Tub Thumpin’ Thursday to you! I’m very excited to say that I will be able to join in on any Tub Thumpin’ that comes my way today! YAHOO! Another beautiful day here… I was supposed to be here for November last year too, but the day before we were to leave, I woke up with that nasty infection that had gathered around my prosthesis, that eventually led to surgery to get the infection out, and zip me back up and send me on my way! So, I’m glad that I got to head south this year for November, my least fave month! Van Morrison greets me this morning with his hit song: Moondance Can I just have one more Moondance with you, my love?
Well, I’m going to take credit for the rally in the currencies & metals yesterday… You see, yesterday I was banging on Traders for not selling dollars on the fact that the U.S. Fiscal Budget was in the hole by $100.5 Billion to start its fiscal year! And I’m sure traders read the Pfennig, no wait, I’m positive they read the pfennig, and did the old V-8 head slap and say, by Joe, he’s right! Let’s sell dollars today and show him we do know what we’re doing! HA! As if, right? Oh well, the news from the currencies and metals at the end of the day yesterday, had the euro at 1.1325, and Gold up $8.50!
Yesterday, I asked Alexa to play some smooth jazz for me, and soon I was bopping along in my chair… I love smooth jazz on the Amazon music station. It’s just stuff you don’t hear all the time, and that gets me thinking… I find that my mind goes racing from one topic to the other while listening to this station… And yesterday, my mind kept going back to this phenomenon that we keep seeing with the dollar getting sold, most days, during the U.S. session, and then getting bought in the overnight session… When I first noticed this weeks ago, I thought for sure it was the European Central Bank (ECB) intervening in weaker volume markets that then carries more movement, thus giving them more bang for the buck. I thought that the ECB was doing this to keep the euro in check, but then as it kept happening, I thought it was a case of dolt foreign investors… But then investors can’t be that idiotic can they? Well, whatever it may be, it happened again last night, and that 1.1365 that the euro held going into the overnight session, was reduced to 1.1290, as I turned on the currency screen this morning.
Gold is still holding its gains yesterday, and is actually adding to them in the early morning trading… The Boys in the band haven’t arrived at their desks yet, so let’s just take Gold’s gains this morning with just a grain of salt, and hope the shiny metal can hold onto its gains.
Getting back to the U.S.’s awful kick start to the fiscal year, after we were told the tax reform would be neutral, and it turned out to be NOT neutral in any sense of the imagination, I thought I would see what other analysts are thinking…
I thought the following question that was asked by publishing guru, Bill Bonner in his letter yesterday was a pretty good one… here’s Bill: “Here’s a question: How come… in a booming economy… the feds are increasing spending more than twice as fast as revenue? Why do they have to borrow at all? And if they can’t balance the budget when times are flush, when can they?
I’m thinking that that’s enough on the deficit thing, I don’t want to be accused of beating a dead horse! (No animals were hurt here!) But… my final thought on this is… As Gomer Pyle used to say… Shame, shame, shame…
I noticed yesterday after hitting the send button on my letter that I’ve been quite the heavy thinker these past few days, and I vowed to not be that way today… Wait! What? I agreed to do what? No way! No, backing out now, Chuck, you agreed… So, keep it light or else!
OK… in the U.K. this week, PM May, introduced her Brexit plan… And well, it was met with tons of disappointment, and now the Brexit secretary resigned and this whole process that took two years to finalize, is a flub… And pound sterling is paying the cost for this mess… The pound got whacked and whacked good and it doesn’t look like the selling is over just yet for the pound. I told you many moons ago, that this currency seemed to be overpriced, given the potential problems of the Brexit negotiations, and looky there, it all played out like I said we should be wary of… Hmmm…
Yesterday I made a quick comment in the currency roundup that the Brazilian real had seen the bloom disappear from the rose, as it seems daily now that the real moves downward. I told you to be careful here… And that’s when things were going the real’s way every day… I’ve seen these currency rallies on a political basis through the years, and they have all done the same thing… Rally during the campaign process, and then after the election the currency gets sold, because… well… now the person that got elected has to get all their reforms that they got elected on, implemented, and the realization sets in that all that stuff can’t be done immediately… It will take time… And well, currency traders don’t have time to wait… So, the proven medicine for Political based rallies holds true here… Aren’t you glad you use dial, don’t you wish everyone did? Wait! Aren’t you glad you listened to me and remained careful here?
The Aussie and New Zealand dollars, respectively, are back on the rally tracks after being derailed about 10 days ago… China appears to be dealing with the slowdown caused by the Trade War, and that will go a long way toward giving these two currencies room to stretch their legs… I have a long lost friend, Jay, that’s 6’8″, and whenever I think of stretching legs, I think of him unfolding those tree like legs in a car or on a plane… Two of my good friends, Rick and Kevin or 6’4′ and 6’3″ respectively, so I’m always looking up to talk to them!
The Saudis announced that they will seek additional production cuts, and that news halted the daily downward slide in the price of Oil in the last 24 hours… But how long will that last? The Saudis had better act fast, or the downward pressure to the price of Oil will return.
As I said above, Gold gained a little more than $8 yesterday, and was up again in the early morning trading today, but my last look, I saw that those early gains had been wiped out… UGH!… I love Ed Steer’s name for the boys in the band selling of paper Gold… he calls it “salami slicing”… Well, let’s hope the salami slicers stick to baloney today! HA!
The U.S. Data Cupboard had the stupid CPI for us yesterday, and by all accounts it remains muted at best… But we all know that’s a bunch of malarkey! We also had Fed Chairman Powell, speaking, and well, he’s ready to hike rates again in December… Powell said the U.S. economy is strong, while warning that there may be some headwinds next year. With latest data showing that inflation in the economy remains muted, Powell said nothing to change market expectations for another hike in December. So, Powell, was doing his best imitation of: Alfred E. Neuman… I find this to be so strange… But then I’ve talked about the need for speed, I mean the need for higher rates so they can be cut in the next recession, so many times it shouldn’t be so strange… should it? No! you dolt, Chuck!
Today’s Data Cupboard has Rocktober Retail Sales, and while I don’t believe they’ll be as awful as Septembers negative -0.1%, the Butler Household Index (BHI) indicates it will be better, but still not the stuff that “strong economies”, such as the one Powell talked about yesterday, should offer… I’m just saying…
To recap… The currencies and metals were firmly on the rally tracks yesterday, all day, but then came the overnight markets to wipe those gains out once again… Chuck is still trying to figure out this phenomenon… Pound sterling is getting whacked after the Brexit plan that PM May introduced was not met with enthusiasm. And the bloom is off the rose with regards to the Brazilian real… Aren’t you glad you use Dial? HA!
For What It’s Worth… After all the heaving reading this week, I thought I would have some fun with the FWIW today, and this article does just that, as it describes paying people to move to Tulsa, and it can be found here: https://www.marketwatch.com/story/this-us-city-is-paying-people-more-than-10000-just-to-move-there-2018-11-14
Or, here’s your snippet: “Tulsa, Okla. is offering remote workers $10,000 to move there. The city is joining the ranks of other locations in the U.S. including Vermont and Maine advertising incentives to workers for relocating.
Tulsa claims it is “the ideal city” for remote workers due to its array of museums, low cost of living, and food and drink scene.
“Tulsa is gaining international recognition for the use of modern technology to better serve citizens, and one of the areas where we see great opportunity is as a home for remote workers,” Tulsa Mayor G.T. Bynum said.
One catch: You have to stay in Tulsa for a full year to cash the complete prize. “
Chuck again… Many, many moons ago, when I was a young man in the brokerage back office, I would be sent to the different cities to act as the back office leader when the local person went on vacation. I spent a week in Tulsa once… And while I’m not here to knock anyone’s city, I will say that if things didn’t change over time, I understand why they need to pay people to move there… HA!
Currencies today 11/15/18… American Style: A$.7270, kiwi .6815, C$ .7560, euro 1.1313, sterling 1.2801, Swiss $1.0056, European Style: rand 14.2580, krone 8.4990, SEK 9.0785, forint 284.59, zloty 3.7921, koruna 22.9660, RUB 67.54, yen 113.45, sing 1.3773, HKD 7.8316, INR 71.74, China 6.9490, peso 20.38, BRL 3.7945, Dollar Index 97.17, Oil $55.93, 10-year 3.10%, Silver $14.11, Platinum $832.94, Palladium $1,133.05, and Gold…$1,210.68
That’s it for today… And this week! Man can you believe that next Thursday will be Thanksgiving? Where do the days go? And that brings me to something I need to talk to you about… I was going to be able to write to you on Monday only next week… But since it’s just one day, I’m thinking of taking a mini-vacation and be back after the Thanksgiving weekend… So, don’t be looking for a Pfennig next week… If something happens that’s worthy, I’ll Tweet it out! I hope that anyone that’s traveling for Thanksgiving will do so safely, and I also hope that everyone has a wonderful and blessed Thanksgiving with their family, friends, whatever the mix, we should all be thankful for what we have… I’m thankful for my family, my health (whatever it is), my friends, you dear Pfennig Readers, and my beautiful bride… Make sure you take a minute next week, and list the things you are thankful for… Steely Dan takes us to the finish line today with their song: Kid Charlemagne… Is there gas in the car? Yes, there’s gas in the car… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and then a truly blessed Thanksgiving next week… And Be Good To Yourself!