Gold and Silver Industry & Investing News
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Trade Deficit in Goods Jumps 17 Percent as Imports Surge and Exports Plunge
The Bloomberg Econoday consensus was for a small increase in the deficit to $-85.6 billion. In isolation, this is bad for GDP, but there are other reports out today with stronger data. I will comment shortly.
READ MOREWages Going Up for Good: Catch-Up and Blowback
One of the most durable expectations in the financial sphere is that inflation will drop sharply in a recession and the Federal Reserve will lower interest rates back to near-zero. There is a good reason to doubt this: rising wages. Yes, we all hear about the millions of human workers who will shortly be replaced by AI--wonderful for corporate profits!--but few pundits bother looking at long...
READ MOREFree-Money Party for Corporate Profits Turns into Hangover amid Rising Costs and Pressured Revenues
Inflation was supposed to be good for corporate profits, according to Wall Street lore, and it was until it wasn’t – until the rising costs and falling revenues caught up with them.
READ MOREWhat to Expect When Politicians Try to Pick Technology Winners Part 1
Note The Inflation Reduction Act Price Jumps From $385 Billion to Over $1 Trillion. Expect more of the same when Biden tries to impose a "just transition" to EVs. And if you missed it, please see Hoot of the Day: The UAW Demands a "Just Transition" to Electric Vehicles Setting goals too high while simultaneously picking winners is a road to ruin. But that is the current inflationary path.
READ MOREUMich Inflation Expectations Remain At 12 Year Highs
The most important segment of the UMich sentiment survey continues to be inflation expectations, and after the preliminary data showed medium-term expectations rising significantly, the final print for May was expected to drop modestly from 3.2% to 3.1% (while the rebound in short-term inflation expectations was expected to hold). Both inflation expectations dropped from the flash print, from 4.5% to 4.2% for 1Y and from 3.2% to 3.1% for 5-10Y. However, 5-10Y inflation expectations remain at their highs of the last 12 years...
READ MOREGold Prices Bounce as Markets Keep Tabs on US Debt Talks
Gold prices edged up from two-month lows on Friday, helped by a dip in the U.S. dollar as traders assessed the progress of U.S. debt ceiling negotiations and the Federal Reserve's rate hike path.
READ MOREUS Credit Squeeze Triggers Rise in Corporate Bankruptcies: FT
Twenty-seven large debtors have filed for bankruptcy so far in 2023 compared to 40 for all of 2022, according to figures compiled by bankruptcydata.com.
READ MOREFed's Favorite Inflation Indicator Re-Accelerated In April
One of The Fed's favorite inflation indicators - Core PCE Deflator - disappointed the doves, printing hotter than expected (headline and core both +0.4% MoM vs +0.3% MoM exp), pushing the YoY inflation signals higher...
READ MORECore US Durable Goods Orders See Annual Decline; Investment Proxy Soared
US Durable Goods Orders were expected to decline 1.0% in preliminary April data, but instead it rose 1.0% MoM (after March was revised down from 3.2% MoM to 2.8% MoM)...
READ MOREInflation Is Going to Stick Around for Longer: Economist Nouriel Roubini
"There's still a lot of inflation around the world," Roubini said. "The big surprise this year is going to be [that] inflation is not going to fall as much as central banks expect."
READ MOREFade The Rally, The Dollar's Destiny Is Lower
The chart also shows that it is short-term real yields that have been rising more than longer-term real yields, flattening the real-yield curve, a process that started last summer ahead of the dollar’s peak in October. The flattening trend is intact, strongly suggesting the dollar will continue its decline once the debt ceiling is out of the way.
READ MOREBond Markets Thrown Into Chaos as New Mortgage Shock Looms
Bond markets were thrown into chaos on Thursday, threatening a new mortgage shock for homeowners amid fears that the Bank of England has lost control of inflation.
READ MOREBiden and Republicans Are $70 Billion Away From Settling Their Debt Ceiling Squabbles
Biden’s proposal included more than $1 trillion of spending cuts, freezing spending for the next two years. The two parties are just $70 billion apart on discretionary spending plans, according to a Reuters report citing a person familiar with the talks—a relatively minor gap.
READ MORETreasury’s Cash Plunges Below $50 Billion As Debt-Limit Fight Drags On
The amount of money the US government has to pay its bills tumbled to the lowest since 2021, posing a risk the administration will run out of funds by early next month if the statutory debt limit isn’t raised or suspended before then.
READ MOREUS Must Make Its Mid-June Interest Payment to Avoid Downgrade, Moody’s Says
With investor attention on the US sovereign credit rating rising as the federal government gets ever closer to running out of cash, Moody’s Investors Service says that a mid-June payment of interest on Treasuries will be critical for maintaining the top, AAA grade.
READ MORESouth Africa Jumbo Rate Hike Fails to Stop Rand Slumping to Record Low
(Bloomberg) -- South Africa’s rand plunged to a record low as another jumbo rate hike by the country’s central bank raised concerns about the outlook for economic growth.
READ MOREFed Traders Fully Price In an Interest-Rate Hike Once Again
Traders fully priced in another quarter-point interest-rate increase by the Federal Reserve within the next two policy meetings and a more than one-in-two chance that hike could arrive as soon as next month.
READ MOREChina Easing Bets Climb to Highest This Year as Growth Sputters
Traders have ratcheted up bets on Chinese monetary easing to the most since November on signs the economy’s post-Covid recovery is running out of steam.
READ MOREEconomists Trim China Growth Forecasts, Expect Reserve Requirement Ratio Cut Sooner
China’s central bank will likely cut the reserve requirement ratio for major banks earlier than expected as the economic recovery loses steam, according to the latest Bloomberg survey of economists.
READ MOREMarket Optimism Over Debt Deal May Pave Way for Monday Selloff
Markets are largely in the green Friday but strategists warn there’s still a prospect US debt-ceiling negotiations break down over the weekend or result in draconian spending cuts that crimp global economic growth.
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