Good day… And a Tom Terrific Tuesday to you! Well, I was wrong… (Mark that down!) I thought we would be up and running with the email version of the Pfennig yesterday… But there’s more “tweaking” that has to be completed first, so… This remains the only way to view the Pfennig each day… Pink Floyd greets me this morning with their song, and my fave Pink Floyd song at that: Comfortably Numb…
I’ve used that song title as a phrase to describe the majority of the people in the U.S., saying that they had become comfortably numb about debt. I recall when I first began using the phrase in my writings, and it’s been quite some time ago!
Well, the currencies woke up yesterday, and through the night they partied on Wayne… Party on Garth! I told you yesterday, that I thought the Aussie dollar (A$ ) was heading for 76-cents, and that’s where it sits this morning… And kiwi, WOW! up to 73-cents this morning. So, I guess there’s no more sneaking around in a dark room so nobody notices for these two. The lights have been turned on, for everyone to see them on the rally tracks!
And someone finally got up to answer the door, and the euro stepped through 1.12, on its way to 1.1250 this morning. Last week, when I made the call for a return to the euro, I titled it. “A Kiss of Death, or a Good Call?” I’m glad to say that we’ve seen no “kiss of death” here… In my Thursday article for the Dow Theory Letters, I really get into how “sentiment” rules these days, and the sentiment toward the dollar is wearing very thin these days… I’m just saying…
I read a report this morning that Lola, aka Goldman Sachs was talking down the dollar, saying that “sentiment” toward the dollar was fading. They even talked about how the dollar gets sold by large sums on small negative data and can’t seem to mount a strong rally on any positive data prints… Well, when I read that, it just confirmed my thought that the strong dollar trend is ending… It will take a while for it to work its way out of portfolios, but it’s ending, folks… I can feel it in my bones!
Yesterday morning, I told you that Gold was down $ 14 in the early morning trading… Have you heard what caused that move? When I heard what caused it, I said, “Yeah, I believe that one.. NO! and if you do, I’ve got a bridge I would like to sell you!” So, here’s how the story goes… Apparently, someone with “fat fingers” caused 1.8 Million ounces of Gold to trade in one minute, taking out the whole bid side stack… Really? That’s what you want to go with to explain this move? I shake my head in disbelief, for this was an “engineered” move if I ever saw one!
So, did you back up the truck and load some Gold onto it at the cheaper prices yesterday? I hope you did, because Gold is up $ 5 in the early morning trading today… Oh! And this is BIG folks! Lola, aka Goldman Sachs came out with a call yesterday saying that their bullish on Gold! And you know what I always say… What Lola wants, Lola gets! I’m just saying…
Did you hear the news from India about what is being proposed by the Gov’t regarding Gold? First the Gov’t took some high denomination rupee notes out of circulation last year, and now they want to monitor all Gold held by the citizens. If the Indian citizen holds unreported Gold, the Gov’t wants them to come clean… So, if it were me… I would tell the Gov’t to go whistle Dixie somewhere, because if I held unreported Gold, it would remain that way!
The Big 3 Central Bankers are on the docket today to speak… First up was European Central Bank (ECB) President, Mario Draghi, who I hear is continuing to tout persistence in his monetary policy, which is all about stimulus… Next will be Bank of England (BOE) Gov. Mark Carney, who will do his best to keep investors “interested” in the U.K. markets… And then finally, Fed Chair, Janet Yellen, takes the microphone, to do a little Karaoke, no wait! That’s not what she’s taking the microphone for, Chuck! Oh, sorry… No, karaoke? Oh darn it! No, instead, Yellen will be in London, talking about global economic issues…
Of these 3, I would think that Yellen has the best chance to really move the markets today, and that “best chances” is like one in 10! But, you never know, right? Stranger things have happened with Central Bankers talk, that’s for sure!
Remember about a month or so ago, I told you how the Chinese were allowing the renminbi to appreciate, almost daily? Well, that ended a couple of weeks ago, and since then, the renminbi has been getting marked down with each fixing… You know, I thought we would know more by now about how China was going to change the way they price the renminbi VS a basket of currencies. I guess I’ll have to just take the route of good things come to those who wait!
The price of Oil gained about 25-cents in the past 24 hours… Hey! 25-cents doesn’t sound like a lot, but when you’re talking about the number of barrels of Oil that’s traded each day, 25-cents is BIG! And any positive move gets the Petrol Currencies all lathered up. The Russian ruble at one point this year, was the best performing currency, but not any longer, as the drop in the price of Oil has taken a HUGE bite out of the ruble…
When I wake up my laptop each day, I look at the currencies to see what’s happened while I slept, and I look for the Russian ruble, because I can usually tell what the price of Oil is doing, by the performance of the ruble… An unabashed Oil Play if I’ve ever seen one! By that I’ll repeat what I’ve said for a few years now, and that is… If you believe that the price of Oil is going to rally, then look to buy rubles, if you don’t believe the price of Oil is going to rally, then don’t look to buy rubles! that’s right, move along… for these are not the droids you’re looking for!
Speaking of waking up… Man, I did NOT want to wake up this morning! I even had to resort to eating something crunchy this morning while my fat fingers worked the keyboard… Eating something crunchy gets your inner system going, and from there, you’re ready for the day!
The U.S. Data Cupboard yesterday saw May Durable Goods Orders fall -1.1%! I told you it would be negative, but even I didn’t think that it would be THAT negative! And Capital Goods Orders also printed negative, posting a -0.2% decline for May… So, chalk up another “real economic data” print as negative, thus proving my point over and over again that the economy is heading to recessionville, but, yet, the Fed keeps hiking rates into the weakening…
Before I head to the Big Finish today, I wanted to just mention that the President of the NY Fed, Bill Dudley, was talking about the markets the other day, and he said something that just about made me fall out of my chair! He mumbled something about “not paying attention to the bond market”… Wait! What? Are you kidding me? The bond market just keeps telling everyone that will pay attention that things aren’t great, and that rates shouldn’t go higher right now, but the man that is on the Fed’s Open Market Committee, which sets the Fed Funds rate, and dishes out monetary policy, says he isn’t paying attention to the bond market… Well, shut my mouth! OK, Chuck, stop right there! You don’t want to carry this out any further, or the men in black suits, white shirts, black ties, and sunglasses will be showing up at the door, “requesting” that I go for a ride…
I’ll just tell them the great Mogambo Guru had me say those thing! HAHAHAHAHA!
To recap… The currencies got of the porch to chase the dollar down the street yesterday, and that carried through overnight and into this morning… U.S. data printed very weak yesterday, with Durable Goods Orders at -1.1%! That got the dollar on the selling blocks, and then sour sentiment toward the dollar took over from there!
For What It’s Worth… I thought since we had a very negative print of economic data yesterday, that I would feature this article that talks about why Americans accept mediocre performance in the economy… You can find the article here:https://www.bloomberg.com/view/articles/2017-06-26/why-americans-feel-so-good-about-a-mediocre-economy?utm_medium=email&utm_source=newsletter&utm_term=170626&utm_campaign=sharetheview
Or, here’s your snippet: “Why the divergence between the “soft” numbers of the confidence surveys, and the “hard” numbers of the real economy? One possibility is that this is just a momentary spot of economic weakness, and the numbers that measure sentiment point to better days ahead? But survey numbers have been rosy for one-half year now, so if they were doing their job of forecasting the real economy, it seems that the good times that they forecast would be showing up in the numbers by now.”
Chuck again… Yes, Retail Sales, Durables, Capital Goods, car sales, etc. just seem to be falling month after month…
Currencies today 6/27/17… American Style: A$ .7604, kiwi .7301, C$ .7560, euro 1.1250, sterling 1.2749, Swiss $ .9673, … European Style: rand 12.8847, krone 8.4680, SEK 8.6936, forint 274.88, zloty 3.7463, koruna 23.3555, RUB 59.09, yen 111.77, sing 1.3865, HKD 7.8006, INR 64.48, China 6.8315, peso 17.89, BRL 3.3232, Dollar Index 96.99, Oil $ 48.83, 10-year 2.16%, Silver $ 16.72, Platinum $ 921.95, Palladium $ 871.00, and Gold… $ 1,252.00
That’s it for today… A little later than usual today, but no biggie… I had a great time at the ballgame yesterday. The rain stopped, and even though the sun never appeared during the game, the temps were great! And the Cardinals won! Old colleague, and friend, Ty Keough, was at the game and came over to where I was sitting to say hi… I need some coffee, so I’m going to tie this up and get it out, and head for a cup o’ Joe! Billy Joel takes us the finish line today with his song: Scenes From an Italian Restaurant… I hope you have a Tom Terrific Tuesday… And Be Good To Yourself!
Chuck Butler
source http://capitalisthq.com/more-negative-data-for-the-u-s/
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