Gold has all the potential to go unprecedentedly high. But silver will be gold on
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Wall Street investors are retreating from the residential housing market as institutional firms bought significantly fewer homes in the first two months of this year compared to 2022. The financial return on additional homes is unimpressive due to interest rates, house prices, and rents. There are concerns that national house prices will decline further.
Tech giants like Google and Meta Platforms are rapidly shedding office space and reevaluating their workplace strategies, resulting in reduced corporate footprints in Northern California towns. Layoffs and the adoption of hybrid work patterns have contributed to this trend, as companies reconsider their commitments to traditional office spaces.
Jun 21, 2023 - 07:29:22 PDT
The good news? Mortgage purchase demand fell only -0.05% from last week. The bad news? Mortgage purchase demand is down -35% since Resident Biden was sworn in. And mortgage refinancing demand is do…
This analysis focuses on gold and silver within the Comex/CME futures exchange. See the article What is the Comex? for more detail. The charts and tables below specifically analyze the physical stock/inventory data at the Comex to show the physical movement of metal into and out of Comex vaults.
Another state has taken action hoping to hinder the implementation of a central bank digital currency (CBDC) in the United States.Last week, Alabama Governor Kay Ivey signed a bill into law that pushes back against CBDC in a small way that could place some roadblocks in the path toward implementing a digital dollar.
Powell's gloomy prepared remarks highlight the ongoing struggle to curb inflation, with interest rates expected to rise further. Slower economic growth and potential labor market softening will be necessary to reduce inflation, while tighter credit conditions pose significant headwinds to economic activity, hiring, and inflation. The road ahead remains uncertain and challenging.
Gold prices were slightly lower as the dollar strengthened, but cautious remarks from Federal Reserve Chair Jerome Powell could provide support and push prices higher towards the resistance level of $1,985. The focus is on reducing inflation, and expectations of a rate hike in July are boosting the opportunity cost of holding non-yielding assets like gold. A breakout from the consolidation zone will determine the short-term direction of gold.
Money-market funds are reducing their cash holdings in a Federal Reserve borrowing program, indicating that market disruptions have been avoided despite efforts to replenish government coffers after the debt-ceiling fight. This comes as the central bank's reverse repo falls below $2 trillion for the first time in over a year. Despite the recent collapse of Silicon Valley Bank, bonds are still seen as a viable investment, as explained by the Wall Street Journal.
The US money-market industry is thriving with assets growing by approximately $1 trillion in the past year to reach a record of almost $5.5 trillion. It benefits from increased tools to attract investors and expand its cash reserves. With access to higher-yielding assets and improved clarity on the Fed's trajectory, money funds can pursue longer-maturity investments and achieve higher returns.
Last week, the national debt pushed above $32 trillion. This is a ticking time bomb that will eventually explode.
Bitcoin Hits a Six-Week High as Financial Titans Step Up Crypto InitiativesJun 21, 2023 - 06:00:27 PDT
Bitcoin surged to its highest level since early May, driven by increased institutional demand and positive developments in the traditional financial sector. The largest cryptocurrency climbed as much as 3.6% and was trading at $28,988 as of 7:48 a.m. in New York on Wednesday, marking a 74% rebound since the beginning of the year. Other cryptocurrencies like Ether, Cardano, and Solana also experienced gains.
Goldman Sachs suggests hedging S&P 500 rally amid recession risks. Narrow rally, high valuations, and overly optimistic growth expectations prompt caution. Options market can hedge potential 23% downside in recession scenario. Chance of recession over next 12 months estimated at one in four. Despite warnings, Goldman's base case is for S&P 500 to reach 4,500 by year-end.
Stock Rally Threatened by Falling Inflation and Declining Liquidity, Warns Morgan StanleyJun 21, 2023 - 05:51:11 PDT
Morgan Stanley warns of bearish forces as stock rally faces challenges. Lower inflation, potential earnings recession, government spending cuts, and liquidity tightening pose risks to stocks. Wall Street divided on rally's sustainability with recession risk looming.
FedEx's 2024 profit outlook fell short of expectations due to a decline in package demand, despite cost-cutting efforts. The company projected adjusted earnings of $16.50 to $18.50 per share, below analysts' average estimate of $18.31. Shares dropped 3.1% in premarket trading, and European courier companies also saw declines. FedEx aims to improve profitability in a challenging demand environment and reported lower sales and earnings for the fourth quarter.
Big investors like T. Rowe Price and AllianceBernstein are defying the Fed's view by betting on longer-term corporate bonds. They believe interest rates have peaked and that a potential US recession would lead to rate cuts. These longer bonds have outperformed shorter ones, with a 4.8% gain this year. Investors anticipate rate cuts in response to an economic slowdown.
Investors are favoring bonds in countries like Australia, Sweden, South Korea, Norway, New Zealand, and Canada, expecting faster and earlier interest rate cuts than anticipated. These nations have high household debt and their markets have not priced in rate relief as quickly as investors believe. In contrast, the US is viewed as having a stronger economy capable of enduring higher rates for a longer duration.
Britain ‘Requires Recession’ to Control Inflation, Bank of England WarnedJun 21, 2023 - 05:37:30 PDT
Economists warn that the Bank of England might have to trigger a recession to control rising inflation. With underlying inflation at a 31-year high and the consumer prices index remaining steady at 8.7%, creating uncertainty and fragility in the economy could be necessary to discourage price hikes and demands for higher wages.
Brazil's central bank is facing pressure to cut interest rates from President Lula's administration and senators. Concerns have grown about the bank's reluctance to ease rates, with remarks from board members causing alarm. The finance ministry is also cautious about the appropriate interest rate level. While some senators threaten action, the majority are unlikely to support removing the bank president. Lula has called for the senate to decide on the interest rate issue.
The European Central Bank (ECB) is close to the end of its interest rate increases, according to Bank of France Governor Francois Villeroy de Galhau. He believes the duration of tight monetary policy is more important than further rate hikes in combating inflation. Villeroy expects inflation to reach 2% by 2025. The Bank of France's June forecasts predict a slowdown in inflation and cautious economic growth.
Powell to Face Capitol Hill Hearing at a Time of Rising Uncertainty Over Fed’s Interest-Rate PlansJun 21, 2023 - 05:23:17 PDT
Fed Chair Jerome Powell is set to testify before Congress for two days, addressing the key question of how the central bank will proceed with interest rate hikes. Last week's Fed meeting yielded mixed signals, with policymakers predicting two more rate increases this year to combat inflation. However, they also revised their inflation forecast higher for next year. Surprisingly, they decided to hold off on a rate hike for the first time in 11 meetings, despite the gloomy outlook.