A Choppy Day Ahead Today

  • Hopes for Global Growth have been smashed!

  • Palladium sees profit taking...

Good Day... And a Tub Thumpin' Thursday to you! Well, my beloved Cardinals traded for a much needed middle of the order bat yesterday... So, we got a model citizen, gold glove 1st baseman, Paul Goldschmidt, and solidified our infield defense at 1st Base... But in doing this trade, we basically told our current 1st Baseman that he's going to have to move to 3rd base, and in doing that, we've weakened our infield defense at 3rd base... I'm just asking... Did the Cardinals really think this one out? Welcome to St. Louis Mr. Goldschmidt... I so hope you enjoy being a Cardinal! I sure hope the Cardinals don't ask him to come here for a press conference... It's 20 degrees and snowing here, and the sun is probably shining and much warmer in Houston, Texas where he lives... Well, enough of that, eh? Jimmy Dean greets me this morning with his version of the song: Have Yourself A Merry Little Christmas...

Well... The stock market didn't fall yesterday... Oh, that's right, the stock market was closed for the funeral of our former President. So, that was a good thing for the stock jockeys, who got a day to catch their collective breaths... But today's open should be interesting as stock futures are down big at the moment... The currencies and metals traded though... And the dollar fought back a little bit on the day. I can tell you that with the markets finally figuring out what I had told you was the case with the Trump / Xi agreement at the G-20 meeting, that has put the kyboshes on the Global Growth trade, and negatively affects the Aussie dollar (A$) and its kissin cousin across the Tasman,

kiwi... You see, I've told you all this before but for new readers or those of you who missed class those days that I talked about it... The A$ and kiwi are proxies for Global Growth... And that leads me to a question that a dear reader posed to me yesterday, Asking me to reconcile how I could say one day that a deep recession is coming and the next day say that commodities will rally in 2019? Well, it's a two staged process... first we're going to have Stagflation, with high inflation and little growth, and that will be the ladder rungs the commodities step on to climb higher in 2019... And then the Deep Recession begins to build... And well, I've told you my feelings on how that all ends up before so I won't go into it again... I'm trying to be optimistic but... You can only be successful with the tools you are given to succeed with... I'm just saying...

There's some news from last night that are spooking the markets this morning... Meng Wanzhou, a top executive at China's Huawei Technologies Co Ltd and daughter of the founder and CEO, was arrested, in Canada, and is going to be sent to the U.S. And this news jolted the global business community on Thursday and raised fears that a truce in the U.S.-China trade war could come to a swift end.

Huawei is the world's largest supplier of telecommunications network equipment and second-biggest maker of smartphones, with revenue of about $92 billion last year. And quite frankly the stealing of intellectual property has been the real reason for these tariffs, so this all plays into this story... It will be interesting to see how this shakes out...

There were some data prints in Australia last night... First their Trade Balance showed a narrowing Trade Surplus... from A$2.940 Million in Sept. to $2.316 Million in Rocktober, and that overshadowed the rise in Aussie Retail Sales in Rocktober by .3% VS .1% in September... So, the narrowing surplus weighed on the A$ as we moved through the overnight markets.

The euro slipped further on Wednesday... The ECB's Financial Stability Report late last week, has done no favors for the euro since printing... But, the euro's moves this week have been muted, and I put down to as drifting, as if traders are waiting for something to get them off their duffs... We'll see...

So, all the euphoria that was in the currencies late last week, has taken a step back, and we're back to watching the dollar pound its chest... But for how long will that continue? These currency moves in 2018 have been so sketchy, and full of bumps and bruises, and then days of seashells and balloons... And the latest series of bumps and bruises gives an investor an opportunity to buy at cheaper prices... I'm just saying...

The Yield on the 10-year Treasury continues to ratchet downward, and this morning is trading with a 2.89% rate... WOW! It wasn't that long ago that the 10-year's yield was as high as 4.25%... And the Fed, supposedly, isn't buying Treasuries any longer, so the stock market selling, is going straight to Treasuries, is how this looks to me... A classic, "Flight to Safety"...

I do believe that today will be quite choppy, what with all the economic data that will print, so let's go head to the Big Finish and find out what's on the docket today...

Well, Palladium traders/ investors, etc. saw an opportunity to take profits what with all the huge gains the metal has booked recently, and they did just that... Palladium lost $17 of its recent gains and back to being 2nd dog to Gold's price...

Speaking of Gold... It lost a whopping $1 and change yesterday, and is flat in the early morning trading today... It's waiting for you to back up your truck... I'm just saying...

And finally, the goosing of the price of Oil recently, as I told you, was all about the proposed production cuts between OPEC and Russia, but as things turn out, Russia hasn't necessarily put down that they agree to production cuts in writing yet... And that has the Oil traders spooked, and when that happens the asset gets sold... I do think that Russia will eventually go along with our friends at OPEC (NOT!)...

The U.S. Data Cupboard gets a workout today, with yesterday and today's data lumped together... But with all the reports that will print the only one that really makes a difference to me is a piece of real economic data, and that's Factory Orders for Rocktober, and a report that I said on Monday this week would probably print negative, and if it does, it will be added to the roster of data reports that are on the "weak" side of the ledger...

The ADP Employment Report for November will print today, not that it has anything to do with the hedonically adjusted BLS report that will print tomorrow, but it's always good to look at, in my mind anyway, because if anyone should know about who's employed in this country its ADP. And so just to check on the so-called experts, the forecast is for 195,000 jobs created in November...

One of my economics mentors through the years, was the great Hyman Minsky... And he once told me that the phenomenon called "full employment" was something that should be feared, because, once you've reached "full employment" it can't get any better from there, it can only get worse... And last month I'm positive I heard a Fed Head talk about full employment being reached here in the U.S. Hmmm...

To Recap... The funeral of former President George H.W. Bush, closed the government offices yesterday, and that meant the stock market was closed, so at least it didn't get beaten down again yesterday! The stock futures this morning are down big, so that doesn't look good for that asset class today... The dollar is back on top this morning after looking like it was ready to circle the bowl late last week, this week it's back on top... Hmmm... And the 10-year's yield has dropped to 2.89% this morning, looks like a classic case of a "flight to safety" to Chuck...

Or, here's your snippet: " France, which has faced countrywide protests in recent days sparked by a tax-hike proposal, emerged as the most heavily taxed of the 36 countries in the Organization for Economic Cooperation and Development, according to the group's annual review published on Wed.

The "yellow jacket" riots, which have quieted since three people reportedly died and more than 100 were injured over the weekend, initially erupted in response to a fuel-tax increase that President Emmanuel Macron has decided to scrap. Critics say such a tax would disproportionately hurt the lower rungs on the economic scale. Clearly, the report will do little to ease tensions.

France's tax revenues equaled 46.2% of economic output, up from 45.5% in 2016 and 43.4% in 2000. Denmark, which had held the top spot since 2002, slipped to 46% of GDP from 46.2% in the previous year and 46.9% in 2000."

Chuck Again... Well, I held my breath when I read the title of the article, thinking that given my tax status, that it might be the U.S.... But not so! Whew! But given the right mix we could be looking at higher taxes to help offset the deficit spending... Think about that one...

Currencies today 12/6/18: American Style: A$.7207, kiwi .6870, C$ .7450, euro 1.1345, sterling 1.2753, Swiss $1.0034, European Style: rand 14.0625, krone 8.5425, SEK 9.0185, forint 285.46, zloty 3.7755, koruna 22.8311, RUB 66.71, yen 112.80, sing 1.3713, HKD 7.8117, INR 70.81, China 6.8554, peso 20.59, BRL 3.8570, Dollar Index 97.06, Oil $51.63, 10-year 2.89%, Silver $14.38, Platinum $791.90, Palladium $1,232.22, and Gold ... $1,236.58

That's it for today... Man I was busy yesterday, and I have no recollection of what kept me so busy yesterday! But not today... It's a Tub Thumpin' Thursday! Our Blues lost another game last night, but at least this time they lost in Over Time. This is one of the worst years I can recall for our Blues who were supposed to be much better than this... UGH! Alex is taking me to the Billikens Basketball game this Sunday afternoon. When, oldest son, Andrew was a young man, I used to take him to Billiken basketball afternoon games... Now my youngest son is taking me! Where'd all those years go in between? UGH! I switched iPods while writing today, and Head East takes us to the finish line today with their song: Never Been Any Reason... And with that, I hope you have a Tub Thumpin' Thursday, and remember to Be Good To Yourself!