NEWS
Powell’s Poker Face: Persistent And Patience
Someone didn’t tell Powell that stocks only go up. New all-time highs, again, for the NASDAQ and S&P 500. That’s an insane six consecutive days of new ATHs in a row. Hell, even Tesla’s on a ten day winning streak. Let’s see what you missed. 👀
Today's issue covers: Powell’s comments today and silver’s shocking performance. 📰
Here's today's heat map:
7 of 11 sectors closed green. Financials (+0.65%) led, & materials (-1.01%) lagged. 💚
The EIA's latest outlook is bullish on oil demand. They predict global demand will rise by 1.10 million BPD in 2024 and 1.80 million BPD in 2025. U.S. oil production is also expected to grow, but crude prices still face downward pressure. 📈
Japanese stocks are on a roll, with the Nikkei 225 hitting an all-time high. Blackrock says there's more upside to come, especially in healthcare stocks. But watch out for yen weakness, which could put a damper on this rally. 📊
Small business optimism in the US ticked up to 91.5 in June, the highest since December. Despite the improvement, the index has been below its long-term average for 30 months, with upcoming elections adding to the uncertainty. 🚀
Gold tried to break out but got smacked back down. It’s stuck between $2,280 and $2,400, with the 100-day moving average looming as a key level. A clear breakout might be what's needed for a sustained rally. 🪙
Bitstamp says it will release Bitcoin to Mt. Gox’s creditors as soon as possible, not 60 days. That has some in the crypto space a little on edge and fearful of increased selling pressure. ⏬
Other active symbols: $TSLA (+3.71%), $MAXN (-8.15%), $NVDA ($2.48%), $SNGX (+271.01%), $GME (+0.61%), and $BTC (+5.33%) 🔥
Here are the closing prices:
S&P 500 | 5,576 | +0.07% |
Nasdaq | 18,429 | +0.14% |
Russell 2000 | 2,029 | -0.45% |
Dow Jones | 39,291 | -0.13% |
NEWS
Powell Plays it Cool 🧊
Fed Chair Jerome Powell is juggling inflation and the labor market like a pro. He claims the labor market is back in balance, but it’s not that simple. The nuances are what make this interesting. Let's dig in. 🏋️♂️
Labor Market: Back in the Groove?
Powell says the labor market has cooled, but it’s still strong. Job creation is slowing down, hinting at a return to pre-pandemic vibes. "We need to see more good inflation data," Powell remarked, casually mentioning they've had one solid inflation reading and one that’s “pretty good.” Good enough? We’ll see.
Getting inflation down is Powell's top game. “The best thing we can do for housing is getting inflation down,” he noted. The Fed’s moving cautiously with rates, needing more positive data to boost their confidence. "More good data would strengthen our confidence on inflation," he added. Translation: Hurry up and wait. ⏲
If you were hoping for clues on when the Fed might cut rates, Powell's not your guy. "Today, I'm not going to be sending any signals on the timing of future actions," he said.
Economic Outlook: US vs. The World
Powell's proud of the US economy, noting it’s doing better than its global peers, expanding at a solid pace. But don’t get too comfortable. Reducing restraint too late or too little could mess things up. "Elevated inflation is not the only risk we face," he stated, stressing the balance they need to strike in hitting their employment and inflation goals. 🇺🇸
Quotes Of Interest
"The most recent inflation readings, however, have shown some modest further progress, and more good data would strengthen our confidence that inflation is moving sustainably toward 2 percent."
"At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face."
With the next CPI report looming and the September FOMC decision not far off, everyone’s watching the Fed. Rate cuts or cautious steps? We’ll know on Thursday. 📆
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COMMODITIES
The Other Precious Metal 🥈
While everyone’s eyes have been on $TSLA’s crazy run, new all-time highs in the indices, and $NVDA’s insane moves, silver is creeping into some interesting territory. 👟
Silver Futures Daily Chart - Click to enlarge.
How interesting is silver right now? This damn interesting:
It’s trading at 12-year highs.
+36.20% YTD.
+42.42% YoY.
The price action alone, while impressive, doesn’t tell the full story. Check out what’s happening in the futures market:
Source: Tradingster Silver COT Report
The Committment Of Traders report above shows 77% of big money is long, along with retail about the same.
The number of long contracts held by the pros is still sitting at 2 and 3-year highs:
Silver Futures Longs
Additionally, the net positions (longs and shorts) are sitting at three-year highs:
Silver Futures Net Positions
The Silver Institute’s research says we’re in a silver drought – a shortfall of 663 million ounces from 2021 to 2023, which is almost 80% of the annual global silver mining output. Another 215 million ounces deficit is forecasted for 2024.
Yeah, you read that right. This shortage is cranking up the pressure for higher prices. 🗜
India’s Reliance Industries ($RELIANCE.NSE) can’t get their hands on enough physical silver for solar panels and other shiny gadgets, so they’ve been hitting up COMEX futures for physical delivery of at least 25 million ounces.
Meanwhile, in China, the private sector’s gold obsession is off the charts. Demand for gold investment soared 26.9% in Q1 2024 compared to Q1 2023. Gold imports can't keep up, so they're snatching up gold contracts on the Shanghai Futures Exchange. Gold trading volume on the Shanghai exchanges now tops COMEX. 😱
To ease the gold crunch, China’s government told the media to push silver on the public instead. And guess what? Physical silver prices in China have shot up $4 - $7 above the global spot price and gold deliveries to China are down. And that’s probably why, for two months, China’s skipped gold purchases for the last two months in a row.
To ease the gold crunch, China’s government told the media to push silver on the public instead. And guess what? Physical silver prices in China have shot up $4 above the global spot price and gold deliveries to China are down . With India's and China’s insatiable demand, silver prices are on a rocket ride. 🚀
Bullets From The Day
💰 Billionaire Bill Ackman has launched a fundraising campaign for his new U.S.-listed closed-end fund, Pershing Square USA Ltd, aiming to raise up to $20 billion. This fund will offer lower fees and quicker access to capital compared to traditional hedge funds, and it won't charge management or performance fees in the first year. Ackman recently sold 10% of his firm and has posted strong returns since 2019. The new fund will be available to a broad range of investors, including retail investors who can buy shares for $50 each. More from Reuters.
📉 Short sellers raked in $10 billion in the second quarter of 2024, even as the S&P 500 and Nasdaq 100 indices climbed. Successful bets in sectors like healthcare and industrials offset losses from megacap tech stocks, highlighting the traders' adept stock-picking skills. The S&P 500 rose 3.9% in the quarter, led by a 37% jump in Nvidia shares, while short sellers adjusted their strategies amid market momentum shifts. This performance underscores the market's narrow rally and hints at potential volatility with upcoming tech earnings and Fed rate decisions. From Bloomberg.
✋ Target ($TGT) announced it will stop accepting personal checks starting July 15 due to low volumes and rising check fraud concerns. This move reflects the broader decline in check usage, with only 40% of Americans having used a check in the past 30 days, down from 50% in 2020. Despite the digital age, checks still play a role in certain payment scenarios, especially among older consumers. Other major retailers like $WMT, $CVS, and $KSS continue to accept checks, though fraud remains a significant issue. MarketWatch has more.
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