What are they thinking now?

Good Day... And a Marvelous Monday to you! My beloved Cardinals won 2 of 3 from Colorado this past weekend, so technically they're still alive for the play offs, but realistically they won't make it, not the way they are hitting (or not hitting I should say) the ball right now... It was a beautiful weekend here, albeit quite warm... I got to hold the new baby yesterday... Geez its difficult to imagine that little bundle of joy, growing up to be a big man.... But I guess, they all do, eh? The Hooters greet me this morning with their great 80's song: All You Zombies

Well, this week will be interesting, in that it will be interesting to see how the markets react to the Jobs report, after having a weekend to sleep on it... 

On Thursday last week, saw the SPTs attempt to get Gold/Silver back under their thumb... Gold remained positive, but Silver was never allowed a strong bid all day... And then on Friday, after the Jobs Jamboree printed, Gold/Silver went on a rampage... 

Yes, the BLS's version of a labor report that I call the Jobs Jamboree, showed that the U.S. lost 23,000 jobs in July... Whoa there Partner! How could a country that supposedly economically strong lose 23,000 jobs in a month? And get this... The BLS added 235,000 jobs to the surveys... So, in reality, the U.S. lost 258,000 jobs in July...  

The Unemployment Rate fell to 4.1%... How did that happen? the unemployment rate ticked down from 4.2% to 4.1%, largely because fewer people participated in the labor force. The share of those working or looking for work fell to its lowest level since February 2021. 

Yeah, it wasn't all folks retiring and gaining a Gold watch... It was made up of mostly people giving up looking for a job... Employers are keeping what they have and not hiring new for now....

Besides, the Unemployment Rate isn't what's looked at for market direction, it's the number of Jobs added or subtracted in this case, that matter... and one more thought on the Jobs report... Who is the POTUS going to fire now? The new BLS head has yet to be confirmed, so no one is leading the BLS... Hmmm....

I've got a piece for you in the FWIW section today, that was written before the BLS report, but should become clear to you now, that they are on to something here...

The BBDXY lost 4 index points to 1,200 and then settled down at that level... For the BBDXY Bloomberg has a graph of its price on a daily basis by hour... And right when the jobs # was announced the line on the graph goes straight down, no stair stepping, no pauses for a cause... Just straight down... 

Which means all the long options to buy the dollar were sold, causing the BBDXY to drop 4 index points. 

The overall performance of the currencies was muted at best, as the euro, the offset currency to the dollar, only gained within the 1.15 handle, and the rest of the currencies followed the BIG DOG (euro). They all gained VS the dollar, but their moves were nothing to write home about...

 Gold ended the week at $4,343 and Silver ended the week at $63.11 and good a reaction for the metals was out of the ordinary for the summer time... And actually Gold and Silver were higher than their closes intraday, but the SPTs were making it difficult to have a real strong rally... No telling where these two would have ended up the week if the SPTs had gone away, they didn't have to go away mad, just go away!

And Copper? It was on a run that had pushed the metal to an all-time high, and then the STPs came along and sat down beside Copper and it lost $12 on the day... it ended the week at $659.... Time to start over again... 

The 10-year ended the week at 4.65% yield... Right at about ½ hour after the jobs announcement, the bond got bought as the knee jerk reaction was a rate cut was coming... But then calmer heads took over and the bond went right back to the 4.65% level... 

And don't look now, but the price of Oil is starting to rise again, now that 2 straits are closed by the Iranians.... 

In the overnight markets last night...there was some dollar buying as the foreign markets don't agree that the dollar should be sold.... Gold/Silver are up to start the day and week today. Gold is up $12 and Silver is up 41-cents... I think that these two are ready for the next leg upward, but then that's just me... The time to buy at cheaper levels has come and gone, but in my opinion, there's never a time not to buy and diversify your investment portfolio.... 

The price of Oil continues to creep higher and starts the day/week with a $79 handle... And the 10-year Treasury bumped higher in yield overnight and starts today, week at 4.66% yield...

Well, I guess the deadline for Iran to come to bargaining table came and went on Friday last week... And we didn't attack them..

Did we not attack because we're getting low on bombs? Oh well... The markets didn't fall for the threat as they did before... A month ago, I titled a Pfennig... The U.S. Becomes The Boy Who Cried Wolf.... It still applies...

I really don't know for sure which way the markets will go after the Jobs report, but you can bet your bottom dollar that I have my thoughts as to how they will go.... I do know that the stock jockeys love it when a rate cut is discussed.... So, the stock bubble gets more air blown into it... The Bond Boys will play hard to get with yields on long bonds (10-30yr) And the currency traders will have thought they did enough for now with marking the dollar down 4 index points... 

The SPTs will be anxious to establish new lines in the sand, and they'll be ready and waiting for their opportunity...

I read this weekend that I was wrong about the U.S. selling dollars to buy yen in the intervention to support yen that took place... The U.S. sold its reserves of euros... And get this, they didn't even alert the European Central Bank about this beforehand.... Boy, I bet that ticked a lot of ECB members off when the heard the news... And no wonder, the euro has been struggling in the 1.15 handle,,,,

I find this to be very strange in that 1. The U.S. would normally use dollars in such an intervention, and 2. That the ECB wasn't made aware of this sale which goes against all the unwritten rules regarding a long-standing rule of coordination between Central Banks.... 

I think Mr. Bessent and others in this decision make a HUGE mistake here ( not telling the ECB beforehand) and credibility has been thrown out the window with the wash... Oh, and yen.... it was still 157 and change to end the week, and if it weren't for the dollar's recent slide it would be weaker for sure... So, so far, the intervention has helped the yen stop the selling of it, but for how long? 

First, we as a country, whittled down our Special Oil Reserves, and now we are whittling down our euro reserves.... What's next? Land? We've got plenty of that... I shudder with fear that this would be on the minds of the powers that be.... Let's hope and pray it doesn't come to that!

Man, I'm on a roll this morning, don't stop me... This reminds me of that great line from Animal House... "Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor?" LOL!

The Reserve Bank of Australia (RBA) meets tonight (for us) and I expect them to leave rates unchanged after hiking them after their last meeting... The RBA has always proven to be prudent and not rush into things, and so rates will remain unchanged in my humble opinion.... 

If the RBA did raise rates, the A$ would benefit and probably leave kiwi in its dust... I'm just saying... 

Things have really gone astray these days, and it's difficult to try and look under the hood, or scatter the straw, or just make plain sense of everything... I'm at wit's end here... But I carry on despite my shortcomings!

The U.S. Data Cupboard today is empty... And tomorrow's isn't anything to write home about... But Wednesday... Yes, Wednesday will bring us the July STUPID CPI.... And there all the rate cut folks will be wondering what they're thinking about, because the STUPID CPI will show that inflation grew in July and ytd.....

Recap... The Jobs Jamboree showed that businesses axed 23,000 jobs in July... And Chuck says the number is really 258,000.... that pushed the dollar down immediately, with the rate cut folks coming out of the woodwork and running all around as long as the lights are turned on.... 

For What It's Worth... OK, I saw this last Thursday, and it was written BEFORE the Jobs Jamboree, but I wanted to let you see it anyway.

Here's your snippet: "The stock market is moving into Friday’s jobs report, which undoubtedly will play big in the Fed’s next policy decision, with a renewed appetite for risk and a cautious tone on interest rates.

A hike comes to mind. Actually, though, just the opposite. A cut.

A nascent, but growing chorus on Wall Street is suggesting the central bank will pivot toward a rate cut as bond yields extract a little speculative froth from lending markets and job growth slows to a point that supports economic growth but tames inflation.

If that happens, get ready.

That combination could provide a crucial floor of support for stocks, which climbed to fresh all-time highs this week on a revived AI trade, and take the market firmly higher right to the end of the year.

To get there, though, depends on the Fed. And all eyes Friday will be on the July unemployment rate.

Economists are looking for 4.2%, unchanged from June and holding at the lowest levels in more than a year. Job growth, however, is slowing, with Wall Street looking for a hiring gain of 97,000.

That split probably capped wage gains, which spillover into inflation pressures but maintains solid growth into the back half of the year.

Even a tick higher on the unemployment rate could trigger stocks to march higher.

“A 4.2% rate clears the way for investors to focus on strong fundamentals, supporting risk-on factors,” said Dennis DeBusschere, chief market strategist at 22V Research. “A higher rate implies a higher speed limit on growth, while 4.1% and below is more obviously risk-off.”

Chuck Again... strong fundamentals? Are you kidding me? But, I told you when Warsh was first appointed to the Fed/Cabal/Cartel, that he wanted to move the goal posts of the inflation calc, so he could convince the FOMC members that a rate cut was worthy... Well, if this plays out then I would have been bang on with my call on Warsh....  

And then... The Jobs Jamboree printed and showed that we lost 23,000 jobs in July... So, everything that this article talked about is on pace, and accordingly, we should see a rate cut... But I shudder at the thought, I'm just being honest here...

Market Prices 8/10/2006: American Style: A$ 7063, kiwi .5890, C$ .7173, euro 1.1552, sterling 1.3501, Swiss $1.2367, European Style: rand 16.21688, krone 9.5057, SEK 9.4846, forint 314.75, zloty 3.7216, koruna 20.9921,  RUB 82.63, yen 158.82, sing 1.2797, HKD 7.8455, INR 95.29, China 6.7448, peso 17.14, BRL 5.0820, BBDXY 1,202, Dollar Index 99.73, Oil $79.03, 10-year 4.66%, Silver $64.11, Platinum $1,750.00, Palladium $1,334.00, Copper $6.62, and Gold.... $4,331.

That's it for today... I've not been sleeping well, and that starts a bad cycle of things... I get tired during the day, and take a nap, and then I sleep too long and can't go to bed at a decent hour because I'm not tired yet.... Reminds me of when I was working, but then I had all the problems of the job on my mind at night, I don't work any longer so, I have to figure out what's causing my restless nights.... The Moody Blues take us to the finish line today with their song: Ride My Seesaw... I hope you have a Marvelous Monday today, and Please Be Good To Yourself!