Perhaps in a mini-tantrum reaction to Japan’s ‘taper’ overnight, which steepened the JGB curve notably… US Treasury yields are breaking out higher today with 10Y Yields solidly above the 2.50% ‘Maginot Line’ for the first time since March 2017. The 2s30s yield curve is spiking today – the most since the Nov 2016 election (+6bps to 91bps) The long-end is leading the way higher in yields and steeper in the curve in 2018… The selling pressure is notable, especially considering just how net short Treasuries everyone already is…...
I told subscribers to expect $1320 to function as a headwind for gold on this rally, and that’s happening right on schedule. To understand the nature of this headwind… Double-click to enlarge this important weekly gold chart. Note that the two biggest volume bars both occurred as key events in India occurred. It could be said that when America catches a general stock market cold, world markets get the flu. Horrifically, when India catches the gold demand sniffles, Western gold and silver stocks can look like they have financial Ebola. It’s clear that $1320 has functioned as a significant headwind to all the major rallies of th...
Oil prices have been on a gradual path of rises for quite some time. And now, WTI crude oil tops the 2015 high of $62.60 and reaches new highs $62.69. It currently trades at the highest levels since December 2014. The breakout awaits confirmation. The move higher in oil prices should give a boost to the Canadian dollar. The loonie enjoyed the superb jobs report on Friday with USD/CAD falling under 1.24. It then took some profits but dropped once again on the upbeat quarterly report from the BOC. Dollar/CAD is on the rise again, mostly due to the renewed strength of the US dollar. more coming...
Nine days into 2018, I’ve read 793 economic and market forecasts. Okay, that’s an exaggeration… but it certainly feels like it. In any case, I’ve read enough to know opinions are all over the place. Whatever your desired scenario, some expert says it’s a sure thing. A forecaster’s greatest challenge is separating what you want to happen from what you think will happen. There’s nothing wrong with wishing events will turn out favorably. But that desire shouldn’t keep you from accepting the facts and their likely consequences. I think John Mauldin got the right balance in his 2018 forecast, Economy on a Roll. After helping J...
The latest JOLTS report (Job Openings and Labor Turnover Summary), with data through November, is now available. The first chart below shows four of the headline components of the overall series, which the BLS began tracking in December 2000. The time frame is quite limited compared to the main BLS data series in the monthly employment report, many of which go back to 1948, and the enormously popular Nonfarm Employment (PAYEMS) series goes back to 1939. Nevertheless, there are some clear JOLTS correlations with the most recent business cycle trends. The chart below shows the monthly data points four of the JOLTS series. They are quite volat...
USD/JPY struggles to preserve the advance from the beginning of the year as the Bank of Japan (BoJ) reduced its purchases of long-term bonds under its Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control, and the pair stands at risk of threatening the range-bound price action from December should a growing number of Fed officials adopt a cautious outlook for the U.S. economy. With little details accompanying the BoJ announcement, the adjustment in the asset-purchase program may be a one-off event as inflation runs well below the 2% target, and fresh comments coming out of the Federal Reserve may ultimately sway the dollar-y...
Photo Credit: Ian Lamont/Flickr.com According to a Marketsand Markets report, the cloud storage market size is estimated to grow from $23.76 billion in 2016 to $74.94 billion by 2021, at a CAGR of 25.8%. Growth is driven by factors such as high demand for hybrid cloud storage, growing need for enterprise mobility, and the need for easy implementation of cloud storage solutions. Cloud-based storage services provider and Billion Dollar Unicorn Dropbox is one of the main IPO prospects for 2018. Dropbox’s Journey California-based Dropbox was founded in 2007 by university graduates Drew Houston and Arash Ferdowsi. Dropbox was started to addr...
The U.S. economy added only 148,000 jobs in December. Gold prices reacted in a choppy way, confusing some analysts. Why? December Payrolls Disappoint Total nonfarm payroll employment increased only 148,000 in December, the slowest pace in three months. The employment gains were generally widespread, but the biggest employers were construction (+30,000), leisure and hospitality (+29,000), education and health services (+28,000), and manufacturing (+25,000). The latter rise is a particularly bright spot, given the not-so-distant problems of the sector. On the other hand, retail trade cut 20,000 jobs, which confirms that some traditional bric...
2018 will be the year the commodity bull gets running… When a man makes his play in a commodity market he must not permit himself set opinions. He must have an open mind and flexibility. It is not wise to disregard the message of the tape, no matter what your opinion of crop conditions or of the probable demand may be. ~ Jesse Livermore The stock market has far more short-term countertrends. After the market has gone up, it always wants to come down. The commodity markets are driven by supply and demand for physical goods; if there is a true shortage, prices will tend to keep trending higher. ~ Bruce Kovner In late August we turned outri...