pebblewriter

Tag: gold

  • Small Business Recession Warning

    If small businesses are the backbone of the economy, we’re in deep trouble. So says the NFIB’s Small Business Optimism Index, which reached an all-time low last month. From the report:

    The NFIB Small Business Optimism Index dropped 3.6 points in June to 89.5, marking the sixth consecutive month below the 48-year average of 98. Small business owners expecting better business conditions over the next six months decreased seven points to a net negative 61%, the lowest level recorded in the 48-year survey. Expectations for better conditions have worsened every month this year.

    Key findings:

    • The net percent of owners who expect real sales to be higher decreased 13 points from May to a net negative 28%, a severe decline.
    • Fifty percent of owners reported job openings that could not be filled, down one point from May, but historically very high.
    • The net percent of owners raising average selling prices decreased three points to a net 69% seasonally adjusted, following May’s record high reading.

    Meanwhile, the market is pinning its hopes on a CPI number (due out tomorrow) that isn’t so bad that interest rates must be raised my more or so good that they signal a recession.

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  • Charts I’m Watching: Jul 11, 2022

    Futures are off moderately, with moves in currencies supporting our analog’s continuing bearish stance.

    All eyes are on Wednesday’s CPI print, with initial claims and PPI on Thursday and retail sales and Michigan sentiment on Friday.

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  • Abe Dead, Abenomics on Life Support

    The universe has no trouble surprising us at times – things that make you stop and say “hmmm.” It is perhaps ironic that Shinzo Abe, architect of the greatest experiment in central bank monetary expansion and market manipulation in our lifetimes, has been shot dead as that experiment is being unwound. Naturally, the Nikkei futures are higher – which is what Abe would have wanted.Meanwhile, US markets are experiencing a little indigestion after learning that jobs growth is still strong, prompting Fed president Bostick to affirm his desire to raise rates another 75 bps this month.

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  • Charts I’m Watching: Jul 7, 2022

    Futures ramped higher overnight on yet another drubbing of VIX.

    It has all the hallmarks of a headfake, however, so caution is warranted for those following along – particularly if VIX holds 26.  Our analog continues to suggest much lower prices in the weeks ahead.

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  • Update on Currencies: Jul 6, 2022

    EURUSD and DXY have officially tagged the targets we set for them several months ago.  Recall that in the Mar 7 Update on Currencies, we noted that the Ukraine invasion could accelerate DXY’s next leg up.

    The yellow .707 at 106.276 and white 1.272 at 106.741 both intersect the white channel top in late 2022 – but it seems unlikely that DXY would wait that long to make its move given the fluidity of the Ukraine invasion.

    We noted in April that DXY had broken out of its rising red channel and, based on our analog, was likely to reach the target in July – which is exactly what it did.

    The move was made possible, of course, by EURUSD crashing as we expected. From that same post:

    There are many potential targets between here and the H&S target of .785. The first is the 1.06 lows from 2020, followed by the 1.03 lows from 2016. Once those break down, of course, the euro will face the 1.000 support, also the yellow .618, possibly as early as mid-March.

    The ECB fought the breakdown as long as it could. With inflation and fragmentation both surging, the current plunge has caught many off guard.Then there’s the hapless BoJ, sitting quietly in the corner hoping that no one notices just how fundamentally broken it is. We’ll update all the big picture charts today, focusing on their connection to the plunge in equities over the next two weeks.

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  • That Sinking Feeling

    As anyone on a budget could tell you, the headline of this post is hardly news. Income isn’t keeping up with expenses, and isn’t likely to any time soon.

    The Fed might prefer PCE over CPI because it ignores food and gas prices. But, it’s those very categories which are making it difficult for the average family to make ends meet.

    Futures were already off by 1.25% before the data hit the wires. Our analog, still on track, suggests the decline is going to accelerate in the coming weeks.

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  • Q1 GDP Slumps Further

    Stocks are essentially flat following a slight downward revision in Q1 GDP from -1.5% to -1.6% and export numbers which are truly circling the drain.

    The disappointing data came on the heels of the worst consumer confidence reading since Feb 2021 and three (so far) Fed presidents advocating a 75 bps rate hike in July.

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  • Charts I’m Watching: Jun 28, 2022

    Futures are up modestly, backtesting the 20-day moving average for a second day. Time to buckle up.

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  • But It Looks Like a Rally…

    Following a series of intraday ramps, futures shot up above the 10-day moving average as soon as the market closed. Bogus? Of course. But, the record will reflect (and the algos have responded to) a seemingly bullish move. Chase it at your own peril.

    Today’s tricks will include trying to get past the 10am New Home Sales and Michigan Consumer Sentiment data.

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  • Charts I’m Watching: Jun 23, 2022

    Futures just backtested the 10-day moving average and our analog trendline, leaving the door open for a pullback – as long as VIX doesn’t get clobbered again.

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