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BLS Revises 2Q 2022 Jobs Figures to -287,000; 2.9% 4Q GDP Not Impressing Economists; AXP, Visa Up; Intel, Chevron Down

Friday, January 27, 2023, 8:55 am ET

Wouldn't it be nice to have the ability to revise events from six months past? That nasty car accident? Just a swerve, no harm. The $400 you lost at the race track? No, you actually won $750. Insulted your boss and got fired? Nope. Schmoozed him and got a raise. And so on...

Most (probably all) people don't have that ability. What happened, happened, and it probably didn't stay in Vegas. However, if you happen to be one of the lucky economists or statisticians employed by the Bureau of Labor Statistics (BLS), you may have free reign to adjust and revise numbers from months or quarters long past.

That's exactly what the BLS did just two days ago.

In the Quarterly Data Series on Business Employment Dynamics News Release, the BLS revised second quarter private sector jobs data, admitting that US companies were shedding jobs to the tune of a 287,000 net job loss.

During the period in question - April, May and June, 2022 - the very same BLS was reporting in their Establishment Survey job gains of 368,000 in April, 386,000 in May, and 293,000 in June, a total for the quarter of 1,047,000 net job gains. These numbers are only off by 1,334,000. After all, these are government figures, so, that's probably close enough.

Here it is, in their own words:

From March 2022 to June 2022, gross job gains from opening and expanding private-sector establishments were 8.3 million, a decrease of 185,000 jobs from the previous quarter, the U.S. Bureau of Labor Statistics reported today. Over this period, gross job losses from closing and contracting private-sector establishments were 8.5 million, an increase of 1.6 million jobs from the previous quarter. The difference between the number of gross job gains and the number of gross job losses yielded a net employment loss of 287,000 jobs in the private sector during the second quarter of 2022.

The melon head (or Head Melon) on the Nobody Special Finance youtube channel reported on Thursday:

OK, so this is just more proof they (government, media, big business, deep state, etc.) lie and obfuscate reality all the time, so that's really nothing new. Whether they were making estimates based on bad data or smudging results for political purposes (Biden and others in government and media touting the job "gains" to the public) remains a matter of considerable conjecture, but, either way, since these numbers were radically revised just Wednesday, the media should have been all over this blockbuster story.

Nah! Crickets.

Kudos to independent journalists, bloggers, youtubers, and webmasters for doing the jobs mainstream media finds so distasteful or beneath their journalistic integrity (hovering near all-time lows). Without them, the public may never know that the US has been in a recession since January of last year or even November, 2021, or that Russia is winning in Ukraine, or that the US economy grew by 2.9% in the fourth quarter of 2022. Wait, what?

A different government agency - the Bureau of Economic Analysis (BEA) - is responsible for GDP, reported just yesterday, so, it's easy to assume that their figures are off by some exceedingly large magnitude.

The federal government is not to be trusted. If they were, then why are they hiring 87,000 new IRS agents to ensure the American people don't cheat on their taxes? Isn't complete, unquestioning compliance automatic in a free society?

Even if the 2.9% growth figure is close to the truth (you never know, even a blind squirrel sometimes finds a nut), Fox News is warning that the numbers may be masking some disturbing trends:

The most troubling information in the GDP report is the precipitous drop in real disposable income, which fell over $1 trillion in 2022. For context, this is the second-largest percentage drop in real disposable income ever, behind only 1932, the worst year of the Great Depression.

According to the experts and trusted sources, on Wall Street, in Washington, DC, and in the media, the US economy is just chugging right along. Recent earnings reports, growing numbers of layoffs, crime and homelessness in the cities, a huge slump in home-buying, runaway inflation, and growing discontent with government sending more and more money and arms to Ukraine speak otherwise.

Intel (INTC), Visa (V) reported results after the close Thursday. Intel's results weren't very promising: Revenue: $14 billion versus $14.4 billion expected; adjusted EPS: $0.10 versus $0.19 expected. Shares are trading down 10% in the pre-market.

Visa did better, delivering quarterly earnings of $2.18 per share, ahead of estimates of $2.01 per share, and a solid comparison to earnings of $1.81 per share a year ago. People are spending those inflated dollars at a pretty rapid clip. Good for Visa. Not so good for tapped out credit card users.

Chevron (CVX) and American Express (AXP) reported Friday morning. Chevron (CVX) reported earnings of $6.4 billion or $3.33 per share, diluted, for the fourth quarter 2022, compared with $5.1 billion ($2.63 per share, diluted) in the fourth quarter of 2021. Despite those good-looking numbers, shares of the oil giant are down a little more than one percent in pre-market trading.

American Express (AXP) is soaring pre-market, up more than five percent on a boost to its quarter dividend of 15%, to 60 cents per share, staring in the first quarter. American Express added it expects group revenues to rise by between 15% and 17%, with earnings in the region of $11 to $11.40 per share, compared to the Refinitiv forecast of around $10.55 per share.

Earnings for the three months ending in December came in at $2.09 per share, down 4.1% from the same period last year and 13 cents shy of the Street consensus forecast of $2.22 per share. Miss earnings? No problem. Issue fresh outlook, raise dividend, stock price goes up. Never fails.

Elsewhere, stocks are on track for another solid week of gains. Through Thursday, the Dow is up 573.92 (+1.72%) on the week, the NASDAQ is ahead 371.98 (+3.34%), and the S&P is up 87.82 (2.21%). Thrilling.

As the US open approaches, Dow futures are down 28 points, NASDAQ futures off 66, and S&P futures down 15. Unless there's a pretty strong downdraft, stocks should finish the week as a whole well into the green, even if Friday trends lower.

At the Close, Thursday, January 26, 2023:
Dow: 33,949.41, +205.57 (+0.61%)
NASDAQ: 11,512.41, +199.06 (+1.76%)
S&P 500: 4,060.43, +44.21 (+1.10%)
NYSE Composite: 15,985.87, +96.59 (+0.61%)


Fun and Games at the Wall Street Casino

Thursday, January 26, 2023, 9:10 am ET

After Wednesday's day-long slog to the upside, stocks once again appear to be headed higher, counting in solid earnings reports by Tesla (TSLA) and Mastercard (MA) and a sobering report from Southwest Airlines (LUV), which lost $800 million, due largely to their holiday fiasco of cancelled flights, service disruptions and general mayhem. The company returned EPS of -0.38 on expectations of +0.07.

What is becoming evident from fourth quarter and full year 2022 corporate results is that there are winners and losers. Winners like Tesla, Mastercard, Lockheed Martin and others are subsumed by losers 3M, Microsoft, Goldman Sachs, Johnson & Johnson, Southwest, and Raytheon. It's a stock pickers market, but only for brief moments, as the systemic gaming was on full display Wednesday as Microsoft (MSFT) closed Tuesday at 242, opened lower Wednesday, falling as low as 231 in the first half-hour of trading, then miraculously turned on a dime and finished the day with a flesh wound of a loss, at 240.61.

The unusual trading patterns of many stocks suggest insider wheelings and dealings, which can more accurately be described as fraud and corruption. Large investors, usually with aid from others in their camps, control everything. If they so please, a stock can be traded down to insolvency levels, then lifted to new highs at the drop of a hat.

Free markets are a wonderful concept. It's too bad the trading markets in developed economies are anything but free. Yesterday's thinly-traded six-hour rally is merely one example of market rigging done by heavy-handed investors with time and patience to distort and rearrange individual stock prices and entire indices to their liking.

What's occurring in markets these days is entirely fake and contrived. The small investor, people with 401ks, IRAs, or other retirement and trading accounts will get whatever crumbs the elite traders leave behind, after which, of course, the government takes its cut. It's a dangerous environment, and that's putting it nicely.

The main US exports are war, fraud, and inflation. That isn't a sustainable business model, yet everybody goes along to get along. The national normalcy bias allows for great latitude in corporate accounting and reporting and for the government to look the other way. Should the general public object or resist, an army of 87,000 IRS agents are standing ready to quell any attempts to mitigate the fraud.

Yes, it's disgusting and tiring in a very big way.

At the Close, Wednesday, January 25, 2023:
Dow: 33,743.84, +9.88 (+0.03%)
NASDAQ: 11,313.36, -20.91 (-0.18%)
S&P 500: 4,016.22, -0.73 (-0.02%)
NYSE Composite: 15,889.27, +21.05 (+0.13%)


Microsoft, Boeing Send Futures Tumbling a Second Straight Day; Stocks Significantly Overpriced; Will Fall

Wednesday, January 25, 2023, 9:12 am ET

US companies reporting fourth quarter and full year 2022 earnings and rvenues reports are trying their best to hide the ugly truths about business slowing to a crawl in many places and costs overrunning production and profits. The latest casualties are Microsoft (MSFT) and Boeing (BA), two Dow components which follow sorry-looking quarters from Johnson & Johnson (JNJ) and 3M (MMM) on Tuesday.

Boeing (BA) stock is trading lower in the pre-market as the defense company reported a fourth-quarter revenue miss and surprise earnings per share (EPS) loss, sending shares tumbling by more than two percent.

For the fourth quarter, 2022, Boeing reported revenue of $19.80 billion against expectations of $20.02 billion and adjusted EPS of -$1.75 against analyst estimates of 17 cents per share. That's not an earnings miss, that's an earnings disaster. It's also the second straight quarter that Boeing has issued an EPS loss.

Microsoft (MSFT), reporting after Tuesday's closing bell, showed fourth quarter results of $52.7 billion vs. $52.9 billion revenue expected and adjusted EPS of $2.32 per share, beating expectations of $2.30.

Investors were initially enthralled with the results, pushing the stock up more than four percent in post-market trading, but moods quickly shifted from joy to despair as the company commenced its earnings call, dashing expectations for 2023, focused on slowing clowd growth and reiterating recently announced layoffs of 10,000 personnel.

The computing and software giant's stock peaked at 343.11 on November 15, 2021 and has been in a steady decline all through 2022 and into the new year. Currently hovering around a range of 234-236, Microsoft is likely to open trading on Wednesday down more than three percent from Tuesday's close of 242.04.

With less than a half-hour to the US open, earnings results from Boeing and Microsoft are contributing to a serious decline in stock futures, with NASDAQ futures down 195 points, Dow futures off 290 and S&P futures sliding 43 points. As the opening bell approaches, losses are extending, portending a severe drop at 9:30 am ET.

The question on everybody's mind is how long inside money and boosts from the PPT or NY Fed's trading desk can keep markets afloat. Recent trends have shown stocks opening to the downside, only to gain strength through the sessions along with suspicious tape-painting into the final fifteen minutes of trading. Every now and then, entire indices will be allowed to plumb new depths, though even two to three percent single-day losses haven't been able to overcome prior pump-priming and insider gaming.

The major indices remain above water for the year to date, especially the NASDAQ, which is up more than nine percent over its December 30 close (10,466.48). Stocks like Microsoft, Apple, Google, Amazon, and Meta Platforms have experienced steady gains in January after being beaten down through most, if not all, of 2022.

It appears the tech sector is about to experience another unhealthy dose of reality and the bad news is spreading rapidly into other sectors.

Common themes early in this earnings season are revenue misses, layoff announcements, and shaky 2023 forecasts. Sooner or later, even large stakeholder investors are going to get the message. Most companies in the S&P 500 are not growing on a revenue or profit basis and should be revalued, lower.

These things take time, especially when the common narrative is one that cannot accept reality.

At the Close, Tuesday, Janaury 24, 2023:
Dow: 33,733.96, +104.40 (+0.31%)
NASDAQ: 11,334.27, -30.14 (-0.27%)
S&P 500: 4,016.95, -2.86 (-0.07%)
NYSE Composite: 15,868.22, -11.87 (-0.07%)


Poor Earnings Reports from 3M, Johnson & Johnson May Send Dow Lower; Raytheon Down, Lockheed Martin Up

Tuesday, January 24, 2023, 9:15 am ET

Earnings season kicks into high gear this week with 4th quarter and full year 2022 results are announced by a bevy of high profile companies.

Johnson and Johnson (JNJ) got the ball rolling Tuesday morning with results that weren't exactly what one would call solid, though the company did manage to advance its 2023 forecast.

Here's the quick take...

The company reported a fourth quarter sales decline of 4.4% to $23.7 Billion primarily driven by unfavorable foreign exchange and reduced COVID-19 vaccine sales vs. 2021.

On a GAAP basis, 2022 fourth-quarter earnings per share (EPS) of $1.33 was down 24.9% from the same period in 2021. JNJ executives decided it would be a good idea to release non-GAAP results (adjusted, we love those) which were much better, pleasing the investor class.

Full year 2022 reported sales growth of 1.3% to $94.9.

Full year 2022 earnings per share (EPS) of $6.73 were down 13.8% from 2021. The fourth quarter marked the third straight quarter of declining EPS.

Financial news headlines are touting Johnson & Johnson's 2023 guidance, adjusting "operational sales growth excluding COVID-19 Vaccine of 4.0% and adjusted operational EPS of $10.50, reflecting growth of 3.5"

Pretty much, the company's fourth quarter and full year results were toilet material, which explains the need for a slew of asterisks and words such as "operational" and "adjusted."

This kind of shielding has become standard Wall Street practice. There's three words for JNJ's results: Stink, stank, stunk. Not everybody was fooled. Shares are trending lower, though only by about one percent, in the pre-market.

Be aware that any company needing excuses for 2022 is probably not telling the whole story and may be a good candidate to short.

Dow component 3M couldn't sufficiently shade the truth over their full year and fourth quarter 2022 results and investors are taking it to task in the pre-market, sending shares sliding by five percent.

Here's a laughable line of reasoning: 3M expects adjusted sales growth to drop 6% to 2% this year due to declining disposable respirator sales and its exit from Russia.

"We expect macroeconomic challenges to persist in 2023," Chief Executive Mike Roman said.

For the inflation hawks, the company reported that it was able to offset higher raw material and logistics costs by raising prices which helped it beat profit in the previous quarter.

Sales in the quarter fell six percent to $8.1 billion. Excluding one-time items, the company reported a profit of $2.28 per share compared to $2.45 per share a year earlier. 3M also took the opportunity to announce 2,500 layoffs, becoming one of the first big-name, non-tech companies to start the furloughs.

On the other side of the coin, arms-maker Lockheed Martin (LMT) announced outstanding results driven by sales of materiel going to Ukraine (Yes, they said that).

The company had net sales of $19.0 billion in the fourth quarter and $66.0 billion in 2022. Net earnings for the quarter were $1.9 billion, or $7.40 per share. Full year 2022 net earnings were $5.7 billion, or $21.66 per share. Cash from operations were $1.9 billion in the fourth quarter and $7.8 billion in 2022; free cash flow was $1.2 billion in the fourth quarter and $6.1 billion in 2022

The company returned $5.0 billion of cash to shareholders through share repurchases and dividends in the fourth quarter, and $10.9 billion in 2022.

Yes, sir, war is good... for some people.

Shares of the war-profiteering dealer are up one to two percent in pre-market trading. The company's shares rose sharply in 2022 as the Ukraine situation worsened. With congress continuing to approve more and more arms to Ukraine, expect this company to profit enormously.

Another defense contractor, Raytheon (RTX) didn't fare as well as Lockheed.

The company reported GAAP EPS from continuing operations of $0.96 for fourth quarter 2022 while repurchasing $408 million of its own shares

For the full year 2022, Raytheon reported sales of $67.1 billion, GAAP EPS of $3.51 and repurchasing of $2.8 billion of RTX shares. Outlook for full year 2023 sees sales of $72.0 - $73.0 billion, adjusted EPS (bogus) of $4.90 - $5.05 and share repurchases of $3.0 billion.

Even with their big numbers and continuing war operations, Raytheon has underperformed lately, reaching a high of about 105 in April, 2022, but failing to achieve that level since. Shares are lower on this announcement, but only slightly, at around 95.70. According to the cheerleaders at Marketwatch, Raytheon (RTX) reported net income of $1.422 billion, or 96 cents a share, in the fourth quarter, more than double the $686 million, or 46 cents a share, posted in the year-earlier period. Adjusted per-share earnings came to $1.27, ahead of the $1.24 FactSet consensus.

Well, there you have it. They're doing just fine thank you.

More bombs, please.

Futures are sliding rapidly as the opening bell approaches. There may be more attention being paid to Dow components, JNJ and MMM than to the war-mongering stocks of Raytheon and Lockheed Martin. There's certainly plenty of opposition to the Ukraine situation, despite what mainstream media outlets report. Most people understandably don't like war and most investors are interested in big companies that actually make products that last as opposed to things that blow up.

The current war posture of the idiots in Washington, DC is unsustainable and it appears to be having some effect on domestic companies saddled with declining slaes and inflating prices. Monday's little short-squeeze rally (note how much higher NASDAQ was compared to other indices) is likely to be reversed, if not today, then this week, as earnings and layoff reports begin to disappoint and proliferate.

At the Close, Monday, January 23, 2023:
Dow: 33,629.56, +254.07 (+0.76%)
NASDAQ: 11,364.41, +223.98 (+2.01%)
S&P 500: 4,019.81, +47.20 (+1.19%
NYSE: 15,880.09, +102.54 (+0.65%)


WEEKEND WRAP: The World Turns on Brandon; Stocks Seem Stuck; Gold Shines Bright

Sunday, January 22, 2023, 2:32 pm ET

Prior to Friday's reflex rally, the week wasn't very encouraging for the bulls. Stocks traded lower Tuesday through Thursday, guided by poor earnings reports and economic data that was distressed, to say the least.

Even though Tuesday's December PPI reading came in on the short side of expectations at 6.2% year over year, declining 0.5% on a monthly basis, traders were neither encouraged by the suggestion that the Federal Reserve would slow or even pause the rate hiking regime soon enough nor assuaged by ideas that the US could somehow skirt a recession.

Unease and uncertainty were palpable circumstances within the trading community, most evident in quick selling decisions made upon earnings announcements and dour data releases. Politics and money seemed to hang over Wall Street like a veritable Sword of Damocles, Biden's sloppy handling of classified documents and a pending breach of the debt ceiling were concerns undermining and contorting business and economic confidence.


Stocks

Led lower by the Dow Jones Industrial Average, gains from the first two weeks of the new year were under assault by non-believers roaming the bearish landscape. Year-to-date, the Dow ended Friday +228.24 (+0.68%). For the week, the Dow lost a somewhat stunning 927.12 (-2.70%). Friday's gains brought the Dow back from being negative for the year as of Thursday's close (33,044.56), down 102.69 points from December 30, 2022 close* (see note below).

Editor's Note: Most of the year-to-date figures cited by Money Daily over the past 18 months - for anything from the major averages to prices for gold, silver, and individual stocks - have been found to be in error. This is due to use of and reliance upon Google Finance as the standard. Analysis hs proven that the googlers employ an improper metric for measuring year-to-date calculations, using closing prices from the first trading day of the year as their starting point. True year-to-date measurement empoys the closing figure of the last trading session of the prior year as the initial figure.

A case in point is the current year-to-date figure for the Dow Jones Industrial Average, which Google Finance pegs at +239.12 (+0.72), using the January 3, 2023 closing quote as the initial reading (33,136.37). The correct initiator is the closing price on December 30, 2022 (33,147.25), which produces a year-to-date reading of +228.24 (+0.68%). Though the errors may be minor, they are, nevertheless, erroneous and Money Daily has reached out to Google Finance to correct their calculations, though there is considerable doubt whether Google will rectify the condition. Money Daily apologizes to readers for the errors and will endeavor to continue to distrust anything and everything that emanates from the supposed ministry of truth in Mountain View, California.

While there is some debate over the correct way to calculate year-to-date, Money Daily argues that ours is the correct method when it comes to comparative values of stocks, indices, and prices that roll forward with the calendar. The Google method would be like using Monday's close to calculate gains for the week, which would produce error upon error ad infinitum. Math is hard for some people.

For the week, this is how the major averages performed:
Dow: -927.12 (-2.70%)
NASDAQ: +61.28 (+0.55%)
S&P 500: -26.48 (-0.66%)
NYSE Composite: -140.82 (-0.88%)

What is of particular concern here is the gain on the NASDAQ and the failure to launch on Friday of the NYSE Composite, which usually ramps along with or better than the NAZ and S&P on a percentage basis. Along with the Dow and S&P, the Composite took such a severe beating on Wednesday - thanks largely to Goldman Sachs - that it was unable to recover into positive territory for the week off of Friday's rally. That leaves the NASDAQ as the only survivor unblemished by a losing week in 2023. It's been up all three weeks while the others suffered their first loser of the year.

A little discussion about the January Barometer, the hypothesis that stock market performance in January (particularly in the U.S.) predicts its performance for the rest of the year, and January Effect, which posits that stocks generally do better in January than any other month of the year, due likely to positive vibes of the new year, fresh positioning and tax implications, is in order.

The Barometer has been proven to be reliably predictive as to returns the remainder of the year.

Quoting from this Forbes article:

Over 62 years studied, January was negative about a third of the time. In those situations, the market's mean return (using equal-weighted NYSE stock returns) was 7.2% for the next 12 months compared to 18.9% for the next 12 months when January was positive.

The author advises some degree of caution...

2020 had an (sic) down January as did 2021. Both were strong up years for the markets. So even though a negative January may flash a warning, looking more recently going from 1950 to 2021 in 14 out of 28 years with a down January, the stock market actually rose for the year.

The Barometer certainly held sway last year. All major indices were down in January and ended lower for the year. 2022 ended with a bit of a dip at the end, but that came on the heels of a strong uptrend, a typical bear market rally. January may very well finish on a positive note, though one would be hard-pressed to believe that big gains would be straight ahead.

As for the January Effect, it's already working, with the dogs - mostly tech stocks - putting on solid gains so far this year. As noted, only the NASDAQ shows weekly wins all three weeks this year. Putting money to work in beaten down Googles, Amazons and Facebooks does require some degree of hope and faith in everything digital while ignoring fundamentals like the p/e ratio of Amazon (AMZN). On a TTM basis, the worldwide retail giant had earnings of 1.09 and last traded at 97.25, giving it a p/e ratio of 89.22. To put Amazon into a portfolio, one either believes that earnings will increase (layoffs will likely help that), investors exude confidence, pigs will fly or a combination of all three. That one looks more akin to gambling than realistic expectations. A share price closer to 50 might be more on point.

The week ahead is a huge one for companies reporting 2022 full year and fourth quarter results. Among the more visible are Verizon (VZ), General Electric (GE), Johnson & Johnson (JNJ), Intel (INTC), Raytheon (RTX), Microsoft (MSFT), 3M (MMM), AT&T (T), IBM (IBM), Tesla (TSLA), Visa (V), Southwest Airlines (LUV), Mastercard (MA), D.R. Horton (DHI), American Express (AXP), Chevron (CVX), and Advanced Micro Devices (ADM).

This week will mark a high or low point for earnings, which have been somewhat disappointing thus far in the current season.


Treasury Yield Curve Rates

Date 1 Mo 2 Mo 3 Mo 4 Mo 6 Mo 1 Yr
12/23/2022 3.80 4.20 4.34 4.59 4.67 4.66
12/30/2022 4.12 4.41 4.42 4.69 4.76 4.73
01/06/2023 4.32 4.55 4.67 4.74 4.79 4.71
01/13/2023 4.58 4.59 4.67 4.73 4.77 4.69
01/20/2023 4.69 4.64 4.72 4.75 4.80 4.68

Date 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
12/23/2022 4.31 4.09 3.86 3.83 3.75 3.99 3.82
12/30/2022 4.41 4.22 3.99 3.96 3.88 4.14 3.97
01/06/2023 4.24 3.96 3.69 3.63 3.55 3.84 3.67
01/13/2023 4.22 3.88 3.60 3.55 3.49 3.79 3.61
01/20/2023 4.14 3.83 3.56 3.51 3.48 3.77 3.66

Other than the one-month bill, which ramped 11 basis points, there was little movement in the short maturities, the one-year note actually down 0.01% for the week.

Two-year notes fell the most, shedding eight basis points, but everything else appeared copacetic, with the 10-year note a fortress of stability, with a rock solid return of 3.48%, down a single basis point from last Friday. All other notes and bonds made lower yields except for the 30-year, which sold off, gaining five basis points, to 3.66%.

Anyone of the belief that the US government will still be around in 2053 and able to service its obligations got a jolt of reality this week (and many jolts prior to that) as two main Houses in DC (White House, House of Representatives) prepared to square off over the debt ceiling. The Republican-led House has the initiative and certainly the incentive to force down some choking budget restraints over runaway deficits, but intransigence from "official" Washington could make this iteration of the usual budgetary drama just a touch more interesting and possibly devastating to the status quo.

There's going to be a standoff and moments of shock and awe in coming months. Treasury (led by the clueless and dovish foreign agent Janet Yellen) is already employing "extraordinary measures" to keep the federal government operational, by not funding retirement accounts of government employees, in particular the Postal Service. This may seem shocking to some, but the benefits promised to federal employees are rather generous and may eventually take haircuts. It's not out of the realm of possibility that congress would rather take away from the future before funding the present. While it may not happen this year, pension funds of all stripes, including (heavens to Betsy) Social Security are headed for the chopping block.

Any kind of unveiled threat from congress over pension sacred cows could produce unforeseen consequences and rioting in the bond markets. While the focus will first manifest itself in stocks, investors will demand higher rates of returns on government bonds. Interest rates, not withstanding actions by the Federal Reserve, would explode higher. Keep in mind, that's not a prediction, only a possibility. When and if it becomes a probability, run for the hills.


Oil/Gas

WTI crude oil futures reached a two-month high of $81.69 as of Friday's close, up marginally from last Friday's close of $80.07, but a significant bump over two weeks from $73.73, a move of 10.8%. Any pretense of keeping a lid on energy prices is being quickly eviscerated as winter drags on and heating fuels take precedence over gas at the pump. How high oil is going will depend largely on geo-politics, particularly the situation in Ukraine and growing concerns on the Syrian front.

Both are places the US should not be involved, but the MIC intent is to continue to warring, bombing, and killing without pause. War fuels higher energy prices, so it should be expected that the price of oil in Europe and North America should increase. One potential silver lining is that US shale producers could begin ramping up production, one possible brake on higher prices.

Prices at the pump continue to rise, with the national average this week an unfriendly $3.41/gallon. That's up 13 cents from a week ago and 34 cents from December 22, according to gasbuddy.com.

All of the Southeastern states are back up over $3.00/gallon, with Texas just nudging upwards at $3.00, and Oklahoma at $3.02. California remains the most expensive, averaging $4.41, with Washington about to hit $4.00. No other states are approaching the dreaded $4.00 level, except Nevada, at $3.91.

As weather warms and refineries switch over to the more-expensive summer blends, prices should rise, but fuel mileage will be better, a tradeoff most drivers would rather not have to make.


Bitcoin

Take your pick: Bitcoin's recent rise from $16,000 to the current level of $22,852.90 is a) a sure sign of a flight from the US dollar, or, b) just another Wall Street pump and dump scheme.

Both could be correct, but the crypto casino remains the most volatile and unpredictable place to be.

No further comment.


Precious Metals

Gold/Silver Ratio: 80.82; last week: 78.74

Gold price 12/23: $1,806.00
Gold price 12/30: $1,830.10
Gold price 01/06: $1,870.50
Gold price 01/13: $1,923.00
Gold price 01/20: $1,944.50

Silver price 12/23: $23.92
Silver price 12/30: $24.18
Silver price 01/06: $23.98
Silver price 01/13: $24.42
Silver price 01/20: $24.06

Gold. Gold. Gold.

The most precious of precious metal has been a star performer so far in 2023, up 6.25% in just over three weeks this year. Further out, from a low of $1630.90 on November 3rd of last year, the gain is a powerful 19.23%.

While silver holders may be moaing about the relative performance of silver - down 12 cents since December 30, 2022 - it bears noting that silver bottomed out at $17.67 last September 1. From there, the current price represents a gain of 36.16%, and, while the price gains are noble in both metals, that seems hardly the point. Current thinking is more a matter of stockpiling troy ounces and tonnes rather than measuring in fiat currencies before, as Mike Maloney likes to say, they become Unaffordium and Unobtainum, as it was March through June of 2020.

Buying has reached a manic stage, with the next stage panic, as supply dries up and demand multiplies. Premiums are still high, with gold bars around $70 per ounce and coins upwards of $100. Silver premiums are already at extremes, with the average price of a one ounce silver coin about $16-17 over spot and bars about $14-16.

Premiums may represent more than just buying demand. They may be signaling complete retail detachment from the LMBA and COMEX standard suppression pricing. Both gold and silver could be magnitudes higher than current prices indicate. Consider that the US dollar has lost 98% of its purchasing power since 2013, when the Federal Reserve first sprang into existence issuing debt notes.

Gold was pegged at $20.67 cents in 1913; silver went for about 57.5 cents at the time. Simple quick and dirty calculation (1913 price of gold or silver X 98) gives us a modernized valuation in dollars of gold at $2025.66 and silver at $56.35 and a gold:silver ratio of 35.95, which might be closer to true value.

Of course, price being a relative construct, it could be anything imaginable, or even unimaginable, but it seems pretty clear that people calling for prices of precious metals to reach ridiculous valuations of $5000 or higher for gold and triple digits for silver may be just whistling Dixie. In any case, silver remains the undervalued proposition and both gold and silver should be regarded as the absolute best stores of value in times of economic stress or uncertainty.

There is certainly enough gold and silver in circulation and in central bank vaults (gold only) to revalue all the fiat currencies in the world to at least partial backing in either gold, or gold and silver, which is where current trends seem to indicate the world is headed. A radical revaluation of currencies is a near certainty within less than three years, possibly even this year, so holding precious metals would be a prudent measure. They will retain value better than most other assets, unless you own a 1940s era Massey Ferguson tractor, the value of which cannot be overestimated.

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping included):

Item/Price Low High Average Median
1 oz silver coin: 33.00 55.00 41.51 39.50
1 oz silver bar: 32.95 45.95 38.38 37.75
1 oz gold coin: 1,999.99 2,131.06 2,058.83 2,057.90
1 oz gold bar: 1,979.00 2,056.40 2,016.23 2,011.28

The Single Ounce Silver Market Price Benchmark (SOSMPB) absolutely exploded this week, rising to $39.29, a gain of $2.51 from the January 15 level of $36.78.


WEEKEND WRAP

Keeping one's wits about oneself can be a tall order these days. There are more than enough distractions and confusing narratives, but the one to watch is surely the one playing out in Washington, DC, where an upstart slim-majority Republican House attempts to issue marching orders to the current White House resident, a person who, by many accounts, was not duly elected and may indeed have committed treasonous acts, pedaling influence to the highest bidders. While all of that is purely speculation, it seems fairly obvious to all but those living in the plausible deniability not-parallel (un)metaverse.

Keep note that the Vice President, Kamala Harris, is kept well clear of the fracas and will be a clean replacement should Brandon get on his bike and ride off into the sunset. Meanwhile, House members will pick and peck away at grossly-inflated US government spending. Whether their ambitions are honest or just for show will come to light in due time.

All the hoopla in DC may keep bright lights off of Wall Street for a while, but eventually they too will have a reckoning. It would pay one well to be on the right side of history this year.

At the Close, Friday, January 20, 2023:
Dow: 33,375.49, +330.93 (+1.00%)
NASDAQ: 11,140.43, +288.17 (+2.66%)
S&P 500: 3,972.61, +73.76 (+1.89%)
NYSE Composite: 15,777.55, +207.92 (+1.34%)

For the Week:
Dow: -927.12 (-2.70%)
NASDAQ: +61.28 (+0.55%)
S&P 500: -26.48 (-0.66%)
NYSE Composite: -140.82 (-0.88%)


Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2023, Downtown Magazine Inc., all rights reserved.

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