March 2, 2023
* currencies & metals rally on Wednesday…
* China’s economy rolls out strong…
Good Day… And a Tub Thumpin’ Thursday to one and all! Well, March came in like lamb… I sure hope that doesn’t play out like the old saying, for I will be returning home on April Fool’s Day! Another absolutely beautiful day here yesterday, and more are in store in the coming days! Baseball game today… After a day off, my beloved Cardinals get back on the field today at Roger Dean Stadium, and we will be there! My Mizzou Tigers pulled out a win on the road last night at LSU… It was a nail biter, but… the outcome was good… This one will be yet another short-n-sweet letter this morning… Boy aren’t you happy about that! HA! Jimmy Buffett greets me this morning with his song: Come Monday…
When I left you yesterday, the dollar had been getting sold in the overnight markets, with Gold & Silver on the rally tracks.. In the U.S. session yesterday, the dollar stopped getting sold, but still ended down on the day, with the BBDXY losing 5 index points… The biggest mover yesterday was the 10-year Treasury… The yield on the 10-year is now above 4%! About time, too! The price of Oil also jumped higher and ended the day with a $78 handle… So, yesterday, was good day for the non-dollar/ anti-dollar investments…
I read where the POTUS wants to spend $1.6 Billion to tackle fraud tied to U.S. pandemic relief programs and help victims of identity theft, the White House said. Wait! What? Ok, let me see if I’ve got this straight… Our Gov’t admits that there were problems with the previous money printing scheme, and now want to print more to correct those problems? Have I died and gone to an economic hell? We as a country didn’t have the money to spend in the first place, and now we want to go into further debt to smooth out bribes, I mean, payments? Serenity now!
In the overnight markets last night, the dollar fought back a bit, with the BBDXY up 3 index points to start today… The currencies all look like they did yesterday, pretty weary, and tired of fighting for ground VS the dollar… Gold is down 1 buck in the early trading this morning, and Silver has given back 15-cents, falling back below $21 again… UGH! Bonds are hanging out to dry this morning, and the price of Oil looks like all the fears of a slowdown are fading… It’s difficult to tell at this point if that’s the case, but it sure looks like it could be..
Well… I told you when China reopened their economy a few months ago, that they would find it difficult to get up and running again… But that doesn’t appear to be the case, as even Chinese officials are surprised by the strength of the Chinese economy already… So, what does this mean for the renminbi and the rest of Asia? Well, I’m not sure, but I would think that the Chinese economy can only grow as much as the demand for their goods grow… And with the Eurozone fighting inflation, the U.S. doing the same, it doesn’t look like the growth in those economies will be strong enough… I’m just saying…
Speaking of inflation in the Eurozone.. Their latest report showed that inflation has increased, instead of falling like they expected to see it do… That’s the thing with inflation folks… Just like we’ve found here in the U.S., it’s very sticky… And seems to pop up here, there, and around the corner, just when you think you’ve got it corralled…
The Mexican peso, continues to get bought, as the “risk premium” has returned to the peso, after being absent for many years! The peso has a history of disappointment, with moving decimals, the Gov’t taking over businesses, etc. So, all I’ll say about the peso, is be careful here… But the interest rate certainly is appealing, eh? Yes, sort of like the song that went through the air that the Sea Hag would send out to entice Popeye to come to her… Oh, my goodness, did I just give away how old I am? HA!
The U.S. Data Cupboard had the latest ISM (manufacturing index) and while it improved a bit, from 47.7 to 48, it was still below the 50 line in the sand… And that’s not a good thing for the economy, folks, so when you hear someone that should know better than to say things like this, say, that everything is good, you don’t need to correct them, but just ask them “so, how is manufacturing in the country going?” That should bring them back to earth…
Today’s Data Cupboard has the usual fare for a Tub Thumpin’ Thursday, the weekly Initial Jobless Claims, which have been inching higher… And with all the announced layoffs that have been made, I can see why… We’ll also see 4th QTR revisions for Productivity and Unit Labor Costs… I suspect that both will be revised downward… but we’ll see in few minutes…
To recap… The dollar’s selling in the overnight markets the previous night, didn’t see any follow through, yesterday, but the dollar did end up down for the day… Gold gained $10 yesterday, and is flat this morning, the big mover yesterday was the yield of the 10-year Treasury, which is now above 4%, which Chuck says is about time! And the price of Oil jumped by $2 in the last 24 hours. Chuck is not happy about a new deficit spending request by the POTUS… And Chuck also reviews the Chinese recovery… All that in a sweet little bundle for you all today!
For What It’s Worth… This article is about how bankruptcies are piling up here in the U.S. with record amount of the filings in the last two months, and it can be found here: US Bankruptcy Filings Surge At Fastest Pace Since 2009 | ZeroHedge
Or, here’s your snippet: “For the past year, both the Biden White House and the Fed have been desperate to usher in a (mild) recession in the U.S. to break the back of runaway inflation and the wage-price spiral with little success. But judging by the surge in bankruptcy filings, they are about to get their wish.
One month ago, when looking at the recent pace of large bankruptcy filings (those with more than $50MM in liabilities), we noted a troubling trend: in the first month of the year, the number of U.S. bankruptcies topped 20, the highest in any other January dating back to 2010. Back then, 25 filings were seen as the economy was still reeling from the aftermath of the GFC.
The spike in defaults was not a fluke, and according to Bloomberg data, one month later – as of the end of February – no less than 39 large companies had filed for bankruptcy in the U.S. so far this year, as February’s pace matches that of January; the YTD total represents the fastest pace of companies filing for bankruptcy since the immediate aftermath of the global financial crisis in 2009. By comparison, U.S. bankruptcy courts had seen 63 large filings at this point in 2009.
Last week’s seven large filings — those tied to at least $50 million of liabilities — include the liquidation of generic drug maker Akorn and the Chapter 11 filing of Covid-19 test maker Lucira Health.
This year, some of the most notable bankruptcy filings have been festive retailer Party City Holdco Inc, mattress maker Serta Simmons Bedding LLC, and cryptocurrency lender Genesis Global Holdco.
The pile of dollar-denominated corporate bonds and loans in the Americas trading at distressed levels rose to $237.2 billion in the week ended Friday, about a 1.63% increase from $233.4 billion a week earlier, according to BBG data.”
Chuck again… That’s some scary data folks… And other arrow in your quiver to pull out when somebody tells you that everything is hunky dory!
Market Prices 3/2/2023: American Style: A$ .6739, kiwi .6231, C$ .7349, euro 1.0623, sterling 1.1982, Swiss $1.0639, European Style: rand 18.1739, krone 10.4344, SEK 10.4879, forint 352.89, zloty 4.4082, koruna 22.0965, RUB 75.58, yen 136.80, sing 1.3478, HKD 7.8497, INR 82.59, China 6.9054, peso 18.10, BRL 5.1850, BBDXY 1,251.40, Dollar Index 104.75, Oil $78.14, 10-year 4.01%, Silver $20.82, Platinum $961.00, Palladium $1,434.00, Copper $4.01, and Gold… $1,835.78
That’s it for today and this week… I can’t wait to get back to the ballpark today… I love Roger Dean Stadium, I love my seat, my view, the field looks fabulous, so, it’s not difficult to see why I enjoy going to the ballpark! And today, I’ll have my good friend, Rick and Duane with me! YAHOO! There have been more of my friends here in years past, but in the beginning, it was just the us three, and since we all get along so well together, it works out! The Billikens play tomorrow night at home, their last regular season game before the A10 Tournament. The college basketball conferences will begin their end of the season Tournaments that decide who goes to the NCAA Tournament, aka The Big Dance… I think my beloved Mizzou Tigers will make the tournament without winning the SEC, but I think the Billikens will need to win the A10 Tournament to get into the Big Dance… Good luck guys! Hall & Oates take us to the finish line today with their song: I Can’t Go For That… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and I’ll talk to you again next Monday… Please Be Good To Yourself!
Chuck Butler