A focus on the rising USD and falling long-term interest rates
For our market wrap today Chris Temple and Cory Fleck chat about the continued rise in the USD and how it is impacting other markets. We also touch on the falling long-term interest rates in terms of how investors are judging the overall economy and the impact that a Fed rate hike would have.
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Wouldn’t it make more sense to short it?
More danger in being short of it, than in shorting it.
British & French, amongst others, will be going into Libya this Summer. Probably within weeks.
Presumably that will be seen as securing / stabilising the oil fields in Libya.
They should send the evil Hildabeast a Christmas card…with a big fat check in it.
Presumably to improve on their under-performance at least from Obama’s perspective. Yuk, and yuk again.
Canadians please show support for Alberta through Red Cross.ca or Text the word REDCROSS to 30333 and $5 will be donated to help the families displaced from their homes due to wildfires in Ft. McMurray , Alberta.
Samaratans Purse is also a sending teams to help accepting donations at http:/samaratanspurse.ca
The wood buffalo food bank is accepting donations woodbuffalofoodbank.com
Animals abandoned by fire will be cared for by SPCA and they accept donations http://fortmcmurrayspca.ca
4 CH-146 Griffon Helicpters are en route to support air fire bombings.
C-130J Hercules Aircraft are joining a C-17 Globemaster heavy lift transport unit to bring in fire trucks, ambulances, medical supplies and specialized personnel.
100 Square Km is on fire as of last report. 10,000 persons evacuated from north camps (oilfield) camps. westjet transported all hospital patients free to Edmonton. 70,000 evacuees sout of Anzac.
airBnB eliminating all fees until may 21 for people seeking living arrangements in Edmonton and North Alberta.
300 extra RCMP deployed to assist with Road and Highway safety.
Full coverage will be non-stop on Canadian news sites like global Edmonton, CTV.ca, CBC.ca
heartbreaking images of stunning video footage of trucks and cars driving past sheer walls of flame as well as haunting images of scorched trucks , charred homes, and telephone poles burned out from the bottom up hanging in the wires like little wooden crosses.
this will be last update. Thoughts and Heartfelt condolences to all those affected by this devastating wildfire.
So what happens re the jobs report?
Am I alone in no longer having a clue how conventional stocks, oil, USD, PMs, etc, will respond to a jobs report whether that report is more jobs or less jobs?
It is very frustrating having to wait for the report and then see which way the markets go – only for them to turn around and go the opposite way an hour or two later. Perhaps it has always been like this? I don’t think it was though. QE has garbled my mind.
You are not alone Bob!
Q.E. has garbled everyone’s mind. Hard to believe it’s been over 35 years now I’ve been at this. Nobody in the investment world had to obsess over the Fed in those days quite so much. When I made an issue of the Fed at my old firm (after the inflation then crash of the 70’s – early 80’s) and said we had better wake up to the central bank. I was treated as a crank. But now things are so far gone that we need algorithms to measure words in each Fed statement…have to know what kind of bowel movement Yellen had this morning, and all that.
The Fed can’t end up in the dustbin of history fast enough to suit me.
I total agree that if we had knowledgable, efficient and honest politicians the Federal reserve is a 6% useless expenditure and totally unnecessary.
Totally
Right, so it is all in NUGT or all in DUST dependent upon how the HFT machines decide.
The primary problem with US Economy, if not the world economy is a fiscal problem, not a monetary problem…..OVER-TAXATION.
No matter how well intention various government social policies may be, taxation and government debt spending long-term always acts as a drag on any economy.
Taxation is an obvious drag, but even Keynesian spending based on government debt becomes a drag in two ways:
First, government spending is NEVER efficient; some money is always wasted or mis-spent.
Second, government spending by borrowing also reallocates resources or capital away from where a free market would allocate it.
CFS; I believe it’s a combination of a fiscal and monetary problem. If you had a reserve currency or the monetary system based on a standard in the first place you would not have as much of a fiscal dislocation. If you were not allowed to print money at will, politicians would have their natural instincts of spending controlled to a degree and you would not have the large amount of “crony capitalism” present that we see today. Lobbying for multiple groups would be tempered as well. Imagine when the problem accelerated for this country—when Nixon took the dollar off the gold standard in 1971—that’s when monetary expansion really began big time and the ponzi scheme started in its’ infancy. That was also the basis for the onslaught of the future assets bubbles. With all the “free” money, the presidents and congress could think up all kinds of chicanery.
Well said. thank you .
Doc,
…. or what Yanis Varoufakis describes in much more detail as the “The Global Minotaur”. It is a well written book that describes where this monster came from, what it is and where it is going.
I agree with you Doc. That’s why abolishing ton the Fed outright is a problem. Money creation in the hands of politicians alone would not work. A gold standard with a fixed value of gold is to restrictive. Thus a suggestion of a variable rate based on world population/GDP combination formula, or similar.
My IPad! IntentionED
Never going to be settled………they know that, it is IMPOSSIBLE…….
“FED UP WITH THE FED” maybe it will catch on! DT
I could promo that, but, OWL would have to ok it………………
the FED…IS THE BIGGEST JOKE ON EARTH……………
What’s in the NEWS………………..ROB REINER “MEATHEAD”…ALL in the Family fame…ARCHIE BUNKER SON IN LAW……, asked……. why does the public like TRUMP………”they are racist”……..zerohedge.
ok, a real moron………from Hillywood.
Off topic:
IMPACT Silver drills more wide sections of high grade silver
That might be why it keeps managing to close above the 10 day EMA despite some daily chart sell signals
Here’s a familiar daily chart:
😮
WOW !
Those grades are comparable to Alexco and Excellon.
Impact is a real gem, thanks for bringing it to my attention, Matthew & Excelsior
On a further note: In my opinion, the place to be is with gold and silver miners (explorer, developer, producer) that have the highest grades in the world. I am continuing to buy shares and shift shares into a small group of companies that “make the grade”.
Yes thank you Matthew and Ex.
Cheers! There were good moves in a number of the Silver Stocks today.
LOOKING GOOOOOOOOOOOD………………..
GREAT HEADS UP………..thanks …………….J
The intersection of a modified Schiff fork and Fibonacci fan should provide support for copper at the 2.11 area tomorrow.
Do or die time for the dollar:
Not a pretty picture for stocks…
There’s nothing good about the daily chart either:
Off topic but a thoughtful idea politically: http://www.zerohedge.com/news/2016-05-05/open-letter-those-disappointed-both-us-presidential-candidates
$TNX:$UST2Y monthly:
DIA:GLD is likely to go much lower soon:
Australian dollar dropping another penny so far this morning. That’s a 4.5 cent decline now in less than two weeks and we can probably expect the Canadian dollar won’t be far behind.
Crude oil is toast. This is game time for energy and energy stocks. And it comes just as precious metals and much of the commodity sector has peaked and is rolling over into a decline.
If the CAD really has peaked on this cycle then crude will have a long slide ahead of it. Possibly taking us all the way back to the February lows eventually. But what is maybe more interesting is what this might say about the odds of a stock market sell off if the US Equities / Crude correlation remains valid.
Stay on your toes people. We may have some action on the horizon!
What I am saying above is that if we take away the top performing sectors of 2016 which are driven by the price rises in precious metal, energy and a variety of commodities then those FANGS had better be able to step up to the plate to keep this market afloat or its going to hit a speed bump soon. I think this is the reason we are seeing markets look soft this past week especially given the poor earnings season. So what might take the place of the winners as they turn down and keep indices propped up? That will be a question on a few peoples minds. Financials, Services, Tech and Healthcare maybe?
We are going to find out soon enough if they can carry the day.
Biotech is being beaten down at the moment, and a market sell-off will take things lower, but I suspect that if oil and the copper/iron miners go lower that Mr. Market will look around for another sector to pump and I think that will be biotech.
I have my finger ready on some biotech stocks but I want to see a drop in the markets first. The current levels of the market feel, to me, lacking in energy to go up. NFP might change that today. But, generally, I feel that we need to see another January or August type drop to build the energy to go up.
Aussie dollar dropping is continued fantastic news for Aussie gold producers.
Gold isn’t in a bear market in all currencies !
Cheers.
Its a case of “horses for courses”
If gold stock investor’s don’t have an international trading account then they are their own worse enemy.
…..its all there in the current & historical gold/currency charts if you can be bothered.
But I guess most don’t……many are too $US focussed only?
That’s OK…..you snooze….you lose.
Cheers.
Great point about how the dropping Aussie dollar is good for Aussie gold producers.
Thanks Skeeta!
Today will be the day. I think the conventionals need to drop considerably. S&P to 1900 or lower.
Would love to see signs that the USD is about to go on a few months of getting stronger – could short oil and PMs then.
Sell in May and go away looks to be the theme this year all right. Check this article on equity fund flows and buying of bonds. There seems to be some insecurity out there…. so I guess that means that markets will rise!
Everyone Is Selling: Largest Outflow From Stock Funds Since September 2015 –ZH
http://www.zerohedge.com/news/2016-05-06/everyone-selling-largest-outflow-stock-funds-september-2015
There is nothing wrong with this picture:
…Or this one:
I just sold some dollars at 1.29385 Canadian.
Not a top call, btw. The Loonie could easily go substantially lower. I will fade the whole move.
To be clear, should have said “not a top call on the USD.”
Funny, because I bought USD…..sold CAD.
Makes sense.
Unloaded MUX and TXG at the double top today. Praying for a pullback next week.
Confused, there is no double top for either of companies.
Here’s one, though.
Note the broken neckline (red).
Typo: either of THOSE companies
At least you chose an appropriate nom de plume.
Matt,
I see that, maybe I’m crazy or “confused” but wanted to get out in case the dollar bounces next week. I am betting it will. Not substantially, but enough to get a %8-10 pull back in both those stocks. Now I feel like a turd as I see MUX break past the double top I thought would hold. TXG is stuck where I sold it. Thanks for the chart Matt. Got itchy feet:(
Well you sold strength like a pro. I hope you were in at much lower levels. I bet your feet are ok now. 😉
Matt,
If it wasn’t for my day job, I’d be a lot better at this. Having said that, I really need to do some homework! I made a quick %20 on both of them and will try to re-enter if and when the time is right. New Gold, Centarra also look good. GPR was a screening buy earlier in the week. Missed its amazing retracement. Again thanks for that chart man!
I got in on that Great Panther dip earlier in the week and trimmed a bit back today.
Are you still holding Scorpio Gold? (If you don’t mind sharing.)
Matt,
yes now I can enjoy my weekend without worry.
That can be considered a form of wealth all by itself!
Great point.
true indeed!
It now looks to me that silver is lateral to down until mid June, so it is on sale until physical runs out!
I’m buying last piles, after which I’m 100% in.