After ending last week at new record highs, the Dow Jones Industrial Average and S&P 500 Index edged back down yesterday. The NASDAQ lost 2.5 percent on the day.
The Dow and S&P 500 closed 7 May at their 24th and 26th record highs this year as the report of April’s feeble jobs market set off a rally in tech and other growth stocks.
The NASDAQ registered a higher percentage growth for the day than the other two indicators and ended 2.7 percent below its record high set two weeks earlier.
The weak jobs report reassured investors that the Federal Reserve would not raise interest rates or curtail its massive bond purchases, giving markets confidence that their bull run would continue.
There is a growing concern, however, that Washington’s spending binge, which has allocated over $5 trillion in stimulus and contemplating trillions more in, will jolt inflation and devalue the dollar.
Yet, given the weak jobs number and the downward revision of March’s new jobs to 770,000, the trend is for more monetary methadone to be injected into equities and the economy.
Today, fearing higher inflation and the reality of overvaluations, the NASDAQ was down some 2 percent before rebounding as gamblers placed big bets on Amazon and Netflix… but keeping most of the equities still in the red.
The Dow racked up its worst day since 26 February, dropping 473.66 points as inflation concerns worsen and gamblers worry that the Federal Reserve’s COVID War cheap money-pumping scheme is coming to an end. Illustrating the fear levels, the CBOE Volatility Index jumped to its highest level in two months.
TREND FORECAST: We maintain our forecast that spiking inflation – as we have thoroughly detailed in the Trends Journal – will force the Fed to raise interest rates much sooner than promised. The higher interest rates rise, the deeper equity, real estate, and the GDP will fall.
TREND FORECAST: Now here this! The COVID War is winding down.
Bill Gates, the World Vaccination Champ and one of the richest men on the planet, has been knocked down by his wife’s divorcing him and damning comments about his sexual proclivity and ties to Jeffery Epstein. Thus, his constant COVID War commentary and appearances on the mainstream media, where he continually pushed for the COVID vax and COVID fear-mongering, will be silenced.
As we analyze the news coverage and comments across the U.S. media spectrum from politicians, inflated “health experts,” and Presstitutes, the trend lines indicate an easing of draconian COVID dictates that have decimated millions of businesses, lives, and livelihoods. Indeed, the terrible job numbers reveal the reality of destruction.
Is this the end of the COVID War? Only time will tell. With the drug dealers calling the “shots,” it will calm down this summer and fall. But we forecast it will ramp up again as winter arrives and they start selling the need for more jabs to kill the COVID variant, which will be hyped as much deadlier than the current strain… which, as we detail, has a low fatality rate.
In the meantime, the artificially-pumped-up U.S. economy will enjoy several months of a “Biden Bounce.” In the longer term, however, President Biden will be remembered in history books as the Herbert Hoover 2.0. When the money-pumping schemes end, America, and much of the world, will descend into the “Greatest Depression.”
Gold/Silver: Trading at three-month highs, while flat today, both precious metals continue to move up as the U.S. dollar continues its downward slide. Today, the big news on CNBC was “Stanley Druckenmiller says the Fed is endangering the dollar’s global reserve status.”
No kidding! We have only been warning about this for several months, but now that the Chairman and CEO of Duquesne Family Office said the Fed’s keeping interest rates at record lows and buying trillions in bonds has created a long-term risk… it must be true.
“I can’t find any period in history where monetary and fiscal policy were this out of step with the economic circumstances, not one,” Druckenmiller said during a “Squawk Box” interview.
Thus, the Fed is in a Catch-22. Raise rates and the economy and equity markets tank. Keep them low and the dollar gets weaker and inflation rises. We forecast the Fed will do what it can to keep rates low for as long as they can, but they will be forced to raise them as inflation continues to spike.
Today, for example, copper prices hit a record high at $10,724.50 a metric ton. As we have previously noted, copper is often referred to as “Dr. Copper” because it is reputed to have a Ph.D. in economics due to its ability to predict global-economy strength and weakness since it is used in most sectors of industry. Thus, as its price rises, it indicates stronger economic growth… and rising inflation.
Bad Buck
For the fourth consecutive week, the dollar’s value declined against a representative group of foreign currencies, marking the buck’s longest stretch without a gain in almost nine months, the Financial Times reported.
Over the last month, the dollar has given up 2.7 percent against the group of other countries’ currencies and was trading at $90.3 on 10 May. The euro was up more than 3 percent to $1.21.
Currencies of countries with economies tied to commodities bounced, with Brazil’s real gaining the most for the period.
Confirming investors’ dark view of the dollar’s future, fund managers are putting money into derivatives that will pay off if the dollar continues to slide or, at least, fails to rise significantly.
In a popular tactic known as a strangle, investors are buying both bullish and bearish options and can then sell the contracts at a profit as long as the dollar’s value twitches up or down but does not move enough to trigger the options.
TREND FORECAST: Overall, whatever actions the Fed and Washington take to stabilize the dollar and boost economic growth, it will only be temporary. Thus, we maintain our forecast for gold to hit $2,100 per ounce this year and silver to break above $50 per ounce.
Oil: In his new article for the Trends Journal, “CRUDE OIL: THE LIFEBLOOD OF THE MILITARY-INDUSTRIAL COMPLEX,” Gregory Mannarino makes it perfectly clear that single most important asset to the global markets is crude oil. PERIOD.
Last Friday, Colonial Pipeline announced it suffered a ransomware attack and moved “proactively” to halt pipeline operations, which transports about 100 million gallons of fuel from Houston to the Port of New York and New Jersey.
An FBI spokesman on Monday said the group, DarkSide, was responsible for the compromise. The Wall Street Journal reported the group posted on the dark web that its objective was to make money, and it was not acting on behalf or in coordination with any government. As with other “attacks,” however, the mainstream media and politicians blamed it on the Russians.
“We are apolitical, we do not participate in geopolitics,” the statement read, according to the report. The group said its goal is to “make money, and not creating problems for society.”
The Journal reported that the group is known to engage in extortion and threaten its victims with publishing private data if its demands are not met.
Eric Goldstein, the executive assistant director of the cybersecurity division at the federal Cybersecurity Infrastructure and Security Agency, told the AP that the attack “underscores the threat that ransomware poses to organizations regardless of size or sector.”
Yes, indeed, Mr. Goldstein, we have only been forecasting the weaponry of “New Millennium Warfare” for over 20 years. We note this because the next wars will be fought with cyber-weaponry, hypersonic missiles, mega-drone attacks, biological warfare, etc.
Indeed, when they asked Albert Einstein what weapons will be used to fight World War III he said, “I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.”
On the oil front, despite the attack, oil is trading in the same range as it was last week. Have prices been held back by a plunge protection team fearing a sharp price hike would freak out the gas-consuming public and ratchet up inflation… or is it the disappointing jobs report that indicates an economic slowdown?
Time will tell.
Bitcoin: Today, the software company Palantir, which sells analytics tools to the defense industry and large corporations, said it was considering adding Bitcoin or any other type of cryptocurrency on its balance sheet.
And while Palantir was co-founded by Peter Thiel, a self-proclaimed “pro-crypto, pro-bitcoin maximalist,” Palantir joins a growing list of companies joining the crypto craze.
As we go to press, Bitcoin is still strong as are other major traded cryptocurrencies. We maintain our forecast that while there will be a sharp correction, the trend line is up… until, or if, governments ban them when they turn their dirty cash into DIGITAL TRASH.
