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As we note in our review of LAST WEEK in this Trends Journal, July was the best month for the money junky gamblers since November 2020.
Beginning in 2020, to fight their COVID War, the U.S. government was in full money dumping mode, ultimately injecting over $6 trillion of fake dollars to pump up the diving economy. And to keep The Street’s money junkies on their high, Feds juiced the equity markets with zero interest rate cheap money while buying up trillions of dollars of government and corporate bonds.
Not only did Western nations follow the Communist Chinese Way by locking people in their homes and closing down life to fight the COVID War, on the money front, the EU, Japan, and the U.S. added fascism to their “democracies.” Their central banksters buying up corporate bonds to help the “Bigs,” equals the merger of state and corporate powers… which the Fascist King, Benito Mussolini, called “fascism.”
Yes, the new Commie-Fascist way is the way of the Western world that keeps going to war to bring “freedom and democracy” to countries they conquer, while stealing their own citizen’s money to enrich themselves and the crime syndicate they represent.
Rigged
Right in front of the world’s eyes for all to see, but blind to the facts, is how rigged the stock market game is. Having nothing to do with reality, it is nothing more than a corrupt Wall Street gambling casino.
Yes, equities had their big month’s spike in July. Pushing them up was the “happy” news that inflation spiked higher than what was forecast.
In mid-July, while the Dow Jones had estimated inflation in the U.S. would rise by 8.8 percent, the U.S. Bureau of Labor Statistics reported that the consumer price index spiked 9.1 percent from a year ago in June.
Despite that news, which indicated the Fed would have to raise interest rates at least 75 basis points, the markets rose higher. And then, when the Fed did raise interest, equities kept their upward climb.
Then last week, The Street predicted that America’s Gross Domestic Product would increase in the second quarter by 0.3 percent. Adding to the list of other rotten forecasts that were way off, no, the GDP didn’t increase, the Bureau of Economic Analysis reported that the GDP fell 0.9 percent at an annualized rate. But that didn’t stop the equity markets from rising.
And back in the old days, considering there was a 1.6 GDP decline in the first quarter and then down 0.9 percent in the second quarter, the media would call it a recession.
But those days are gone.
Instead, for days they pumped up U.S. Treasury Secretary Janet Yellen’s pitch, that a recession “is not what we’re seeing right now.”
This is the same Janet Yellen, who, as we extensively reported, said for a year-and-a-half that there was no inflation.
Yet, despite her failed forecasts, the Presstitutes promote her bullshit that there is no recession as though she knows what she is talking about, while blackballing the Trends Journal’s accurate forecasts.
TRENDPOST: We had long ago forecast stronger inflation in articles such as our Economic and Markets Overview sections in our 27 October, 2020 and 3 November, 2020 issues and documented it through last year in our Markets Overview sections on 23 February, 2021 and 18 May, 2021, “Inflation Spreads” (12 Oct 2021) and “Inflation on the Rise” (7 Dec 2021), among a host of other articles.
However, Yellen continued to echo Powell’s assertions of “disinflationary pressures around the globe” early last year, then for several months parroted his assertion that high inflation is “temporary,” then “transitory.”
Like the Fed itself, which she once chaired, Yellen has lost all credibility as an economic seer… but she is still championed by the mainstream media.
TRENDPOST: First, inflation was “temporary;” then it became “transitory,” a more effective weasel word that implies an even more vaguely defined period of time.
Now Powell knows what everyone else, especially Trends Journal readers, have known for more than a year: inflation is a serious, long-term threat to the U.S. and global economies.
In an August speech, Powell listed five factors convincing him that high inflation was “temporary.” One of them: the absence of “broad-based” inflation.
At the time he spoke, inflation already had widely permeated commodities and consumer goods (“Commodities Supercycle Underway?” and “Inflation Ripples Through U.S. Economy,” both from our 11 May 2021 issue).
Powell was either deluding himself, deliberately misspeaking—perhaps to keep markets and shoppers calm—or he and the Fed staff are abysmally incompetent at reading numbers available in news reports.
Commie-Fascism
Therefore, at this time in the decline of civilization where only war is promoted and peace is forbidden, and the rich get richer … there is no connection to economic reality and equity market fantasy in the mainstream narrative.
Considering the terrible economic news last week, plus the ongoing Ukraine War, equities should be in a sharp downturn and precious metals should be spiking… yet, it is in reverse: equities up, precious metals down.
Again, as we have clearly stated with facts and data, the COVID War’s financial, mental and spiritual damage inflicted upon We the People by draconian political dictates is incalculable. It has destroyed the lives and livelihoods of billions.
And now, the “We’re #1” warmonger nation of the world that has killed countless millions since the end of WWII and now championing WWIII, the United States of America… has ramped up a confrontation with China.
What does this have to do with economics?
Everything!
There will only be an economy of death and misery if the current socioeconomic and geopolitical trends are not reversed.
Today, U.S. House Speaker Nancy Pelosi—a government crime syndicate stalwart who has been sucking off the political tit her whole life and whose father was in congress and both he and his son were mayors of Baltimore—defying a Chinese warning, took a trip to Taiwan today.
After she landed, the People’s Liberation Army announced that later this week “important military training operations” and live ammunition drills would take place in numerous areas surrounding Taiwan.
Stating that “China firmly opposes and sternly condemns this, and has made serious démarche and strong protest to the United States,” its Ministry of Foreign Affairs said Pelosi’s visit is “a serious violation of the one-China principle and the provisions of the three China-U.S. joint communiqués.”
Playing the same old freedom and democracy bullshit game, despite America’s etched in stone murderous war crime track record, Pelosi said upon her arrival that “Our congressional delegation’s visit to Taiwan honors America’s unwavering commitment to supporting Taiwan’s vibrant Democracy.”
Again, while this is the economic section of the Trends Journal, as per our Globalnomic® trend forecasting methodology, all things are connected. Pelosi’s visit is more than just geopolitical… it is socioeconomic, and as tension escalates so too will economic turmoil.
Accusing the United States of escalating tension with China, its Foreign Ministry said Pelosi was “playing with fire” and her actions may result in “disastrous consequences” and that “The United States should and must take full responsibility for this.”
As Gerald Celente says, “When all else fails, they take you to war.”
Just as the Ukraine War often overshadows the EU and U.S. economic crisis that is escalating, so too has the Pelosi visit overshadowed the weakening Chinese economy.
Thanks to communist China’s dictatorial stringent zero-COVID policy, consumer demand has weakened and so too has its purchasing managers index which went negative in July, pulling back to 49.0 from 50.2 in June.
On the housing front, according to China Real Estate Information Corporation, the country’s top 100 property developers saw their sales plummet by nearly 40 percent in July.
On the key export side of business, according to The Wall Street Journal, China’s PMI subindex tracking export orders remained in contractionary territory for a 15th consecutive month.
And, as we note in the TODAY market analysis in this Trends Journal, as military tensions increase between the U.S./Taiwan vs. China… so too are tensions increasing in Asia’s equity markets.
War and Poor
And while President Biden ramped up the war in Ukraine by sending another half billion dollars of weapons to keep bloodying the killing fields—bringing the total sent to Ukraine to over $60 billion since the Russian invasion—for Americans, it’s another day older and deeper in debt.
Today, the New York Federal Reserve reported that household debt in the U.S. spiked to a new high, hitting above $16 trillion in the second quarter.
Enriching the Bankster Bandit’s credit card scam—whose average credit card interest rate is 19.13 percent for new offers and 15.1 percent for existing accounts, according to WalletHub—American’s credit card balances surged $46 billion in the last quarter… up 13 percent, and the largest spike in more than 20 years.
So, while the Presstitutes in the media applaud Pelosi’s trip to Taiwan, and while comic, clowns and politicians wave the Ukraine flag for America to send more money to the most corrupt country in Europe according to the European Union, 48 percent of America’s slaves fell deeper in debt.
The American Consumer Credit Counseling also reported that nearly 20 percent of Americans had to cut their savings rate, and the number who went into debt was up 11 percent from the last quarter. J.D. Power also reports that 64 percent of Americans classify themselves as “financially unhealthy.
But as for Peace Rallies that object to America’s foreign entanglements and stealing American taxpayer’s money to make them poorer while enriching the military industrial complex rather than repairing the nation’s rotting economic foundation and crumbling infrastructure, they are blackballed by the Western media.
Getting Worse
Four in 10 U.S. adults report they now find it “somewhat difficult” or “very difficult” to pay for normal household expenses, according to a U.S. Census Bureau survey taken in late June and early July.
That figure indicates that 90 million households are losing ground to inflation, 50 percent more than a year ago, the bureau noted, and the highest since it began asking the question in August 2020 as the COVID War intensified.
In Dallas, 45.9 percent of families reported struggling, compared to 27.9 percent a year previous. In Detroit, the proportion of households that have difficulty has risen by 20 percentage points.
One in every eight New York state residents is late in paying utility bills, according to a new report from the state comptroller’s office.
The average arrears is $1,467, almost double the $768 average owed in March 2020, the office noted.
Nationally, more than one in three households cut expenses on, or just did not buy, basic necessities such as food or medicine so they could pay utility bills, the census bureau study discovered.
More than 20 percent of families kept their household temperatures at a level they believed was unsafe or unhealthy for at least a month to cut utility costs, the survey reported, and the same proportion had had trouble keeping current with energy bills.
And as we reported in this and previous Trends Journals, this trend is going global.
LAST WEEK: RALLY MARKED STRONGEST MONTH SINCE NOVEMBER 2020
Last week’s rally in stocks made July the best month for U.S. equities since November 2020.
Investors were cheered by stronger-than-expected earnings results from several major corporations, including Alphabet, Amazon, Apple, and Microsoft.
Of 278 of the S&P’s 500 companies to report earnings as of 30 July, 209 have beaten analysts’ forecasts.
Amazon’s share price jumped 10 percent on Friday after a stellar earnings report; Apple’s stock value leaped up 19 percent in July.
Investors also took heart from news that the U.S. economy contracted for the second consecutive quarter, indicating the economy has slowed and raising hopes that the U.S. Federal Reserve might ease its aggressive pace of interest rate increases, The New York Times said.
“Investors are betting that much of the negative [economic] news has been priced in, that the Federal Reserve could become less aggressive in tightening monetary policy, and there’s enthusiasm in equity markets for slower inflation and fewer [interest] rate hikes,” fund manager Baylee Wakefield at Aviva Investors said to the Financial Times.
The Standard & Poor’s 500 index gained 9.1 percent in July, ending the month 11 percent higher than November 2020. The Dow Jones Industrial Average added 6.1 percent for the month and the NASDAQ shot up 12 percent to book its best month since April 2020.
However, the gains were unable to erase markets’ generally dismal performance during the first half of this year.
The S&P posted its worst first half of a year since 1970 and new data shows that the U.S. economy puckered by 0.9 percent in the second quarter.
The two-year Treasury note’s yield ended Friday at 2.897 percent, still higher than longer-term notes.
When short-term securities show a higher yield than longer-term counterparts, the result is an “inverted yield curve” and often has been a harbinger of a recession.
The junk bond market yielded 5 percent last month, its best one-month return since October 2011, data compiled by Bloomberg showed.
Still, the numbers should not be taken to mean that happy days are here again.
“The [markets’] move higher is a reflection that the current round of updates from corporate America are not as bad as feared,” The Wall Street Journal noted, “which is different than those results being good.”
Gold followed stocks’ rally, rising 3.6 percent on Friday to $1,782 at 5 p.m. U.S. EDT.
Brent crude oil’s price grew by 1.4 percent last week, surrendering most of the larger gains it added over the five days, including briefly reaching above $110 on Friday.
West Texas Intermediate fared better, climbing almost 5 percent for the week to $98.51.
Bitcoin continued its slow recovery, adding 10.4 percent, or more than $2,000, during the week to reach $23,784.
Abroad, Europe’s Stoxx 600 tracked U.S. markets and rose 3.0 percent for the week. The Nikkei 225 also gained, rising 0.4 percent.
South Korea’s KOSPI index lost 0.3 percent as its export-dependent economy faced growing fears that a global recession is approaching. In Hong Kong, the Hang Seng index slid 1.9 percent. Mainland China’s SSE Composite dropped 0.6 percent and the CSI Composite gave up 1.6 percent.
YESTERDAY: BREATHER BEFORE JOBS REPORT
The Dow Jones Industrial Average shed 46.73 points, or 0.14 percent, to close the trading day at 32798.40. The S&P 500 dropped 11.66 points, or 0.3 percent to 4118.63, and the Nasdaq Composite Index fell 21.71 points, or 0.18 percent, to end the day 12368.98.
Stocks were down on Monday in another bumpy day of trading where stocks were slightly higher and then fell lower during the morning trading session. Some traders expressed a sense of optimism that the Federal Reserve may be approaching the end of its monetary tightening to combat record inflation rates. The S&P 500 began the week at its seven-week high.
Some traders say the market is taking a breather before the jobs report due out at the end of the week. Economists told The Wall Street Journal that they expect to see the U.S. economy add about 250,000 jobs in July, which is lower than the 372,000 from June.
The Trends Journal has noted that President Joe Biden has insisted that the country is not in a recession based on the strength of the job market. This is despite two consecutive quarters of a shrinking economy due in large part to soaring inflation.
The yield of a 10-year U.S. Treasury traded at 2.605 percent, which was down from Friday when it traded at 2.642 percent.
TREND FORECAST: Despite some of the optimism felt on The Street, the market shows signs that it will continue to face some headwind and the gains in July could be lost, in the words of Frank Sinatra, to the summer wind.
Weary investors raised concerns about the drop in the real yield in the 10-year Treasury from its high in June when it hit 3.482 percent. (A real yield adjusts for inflation.)
“Real yields have dropped a stunning 82 bps in just a few weeks,” Jurrien Timmer, the director of Global Macro at Fidelity, tweeted. “It’s as if the Fed is easing policy, when in fact it is not even done tightening. Maybe the Fed needs to walk back a bit from the dovish interpretations of its ‘data dependent’ comments to the press?”
Elsewhere, Europe’s Stoxx 600 fell slightly by 0.82, or 0.19 percent to close at 437.46. Britain’s FTSE 100 dropped 10.01 points, or 0.13 percent to 7413.42.
South Korea’s Kospi also jumped points, or 2.4 percent and the Shanghai Composite increased by 0.21percent and closed at 3259.96, and the Shenzhen Component rose 1.2 percent to close at 12413.87. Hong Kong’s Hang Seng index rose slightly to close at 20165.84.
The European market is anticipating the Bank of England’s expected move this week to raise its interest rates by 50 basis points with inflation hitting 9.4 percent in June—a 40-year high.
There is lingering worry in Europe as Russia continues to cut off countries from its gas supplies. Bank of America said in a research note on Monday that the gas situation in Europe is “quickly moving from our ‘bad’ to our ‘ugly’ scenario in the past month.
We point out in this week’s issue that analysts do not believe Europe will be able to stockpile a sufficient amount of gas before the winter.
GOLD/SILVER: Gold prices approached $1,772—a four-week high—late Monday due to the weakening U.S. dollar index and anticipation of the jobs report due out on Friday for the month of July. The U.S. dollar has seen an almost 10 percent jump in value since January but has hit two-month lows. The dollar index hit 105.22 on Monday. Foreign investors tend to shy away from gold when the dollar is more expensive.
Silver saw its four-week high and was trading at about $20.30 as of midday Monday.
TRENDPOST: Once again, we see the price of gold benefit when the U.S. dollar comes down and the yields on Treasuries become less attractive to investors. Gold and silver prices are not expected to move dramatically. The value of the U.S. dollar is expected to remain high given other world currencies are so weak. Gold is an attractive investment when there are fears of an economic slowdown, and Biden has been trying his best to convince the country that it is not in a recession.
And now, with war drums beating louder around Europe and Asia, gold will shine as a safe-haven investment.
BITCOIN: Bitcoin, the cryptocurrency many see as a benchmark crypto, started the month down about three percent as it continues to flirt around the $24,000 mark.
The weakening of the crypto that once traded at nearly $70,000 per coin has allowed other cryptocurrencies to challenge it for market supremacy. Fortune magazine reported that the price of Ethereum has soared recently and “fans of the No. 2 token by market value are reviving predictions that it is destined to one day take over the throne,” which is called “flippening.”
The report said Ether’s market value has increased about 50 percent in July to about $210 billion, which is less than half Bitcoin’s value.
Joe DiPasquale, CEO of BitBull Capital, told the magazine that he believes Ether is a “major differentiator.”
“Bitcoin has been the hundred-pound gorilla, but Ether is really the other hundred-pound gorilla. Everything else trails behind,” he said.
Ether was trading at about $1,695 per coin on Monday.
TREND FORECAST: September will be a big month for Ether enthusiasts because the crypto is expecting a software upgrade that will move the system from miners—like Bitcoin—to staked coins. The new system is believed to be more energy efficient and could offer new security for coin holders.
Ben Edgington, a developer, told The Defiant: “There are very real costs associated with not doing the merge: 130,000 tons of carbon dioxide every day. It’s nearly a million tons a week. Every week we twiddle our thumbs, that’s a megaton of carbon dioxide we´re emitting.”
One of the top criticisms that cryptos have faced are the amount of energy they use. If Ether creates a system that can dramatically cut the energy output, the coin will become a lot more attractive to companies and people who want to be seen as “green,” thus sending the value rocketing. Bitcoin will likely not be far behind to match the new technology.
TODAY: MARKET HIT TURBULENCE AFTER PELOSI VISIT TO TAIWAN, FED TALK
The Stock Market declined today on news of House Speaker Nancy Pelosi’s landing in Taiwan, plus indicators that say the Fed is not done raising interest rates to fight inflation, and concerns about energy prices.
The Dow Jones Industrial Average was down 402.23 points, or 1.23 percent to 32396.17, and the S&P was also down 27.44, or 0.67 percent to 4091.19. The NASDAQ Composite was down 20.22, or 0.16 percent to 12348.76.
Stocks fell in the afternoon after Federal Reserve leaders said the central bank was not done raising interest rates to combat inflation and the turbulence caused by Pelosi’s trip to Taiwan.
Stocks have been recovering some early summer losses after strong corporate profit reports, but this week promises to be exciting with a key job report expected on Friday, a key OPEC meeting on Wednesday, and the aftermath of Pelosi’s visit to Taipei…not to discount the raging war in Ukraine that shows no end in sight.
The Job Openings and Labor Turnover report that was released today showed the number of job openings decreased to 10.7 million on the last business day of June, according to the U.S. Bureau of Labor Statistics.
“Hires and total separations were little changed at 6.4 million and 5.9 million, respectively. Within separations, quits (4.2 million) and layoffs and discharges (1.3 million) were little changed,” the report said.
Mary Daly, the San Francisco Fed president, told CNBC that the Fed was “nowhere near” done increasing interest rates.
Some of the key stock movements on The Street today were Caterpillar, which saw shares fall 5.8 percent to $183.51 after missing forecasts, and JetBlue, which was down 6.4 percent to $8.04 after reporting a loss in the quarter.
TRENDPOST: Between sanctions against Russia that have backfired, complacency for months on inflation, draconian COVID-19 lockdowns, continued provoking of world powers, and injecting trillions into the economy, it is only because the game is rigged that there has not already been a dramatic crash in the markets.
We have long noted that the Bankster Bandits will do all they can behind the scenes to delay the market crash, but these rate hikes will do little to bring down inflation and more to bring down the economy, which equals: Dragflation.
Europe’s Stoxx 600 was down 1.39 points, or 0.32 percent, to 436.07, and Britain’s FTSE 100 was down 4.31 points, or 0.06 percent to 7409.11. South Korea’s Kospi was down 12.63, or 0.52 percent to 2439.62. Japan’s Nikkei was down 398.62. points, or 1.42 percent to end at 27594.73. The Shanghai Composite was down 73.69, or 2.26 percent to close at 3186.27. The Shenzhen Component was also down 293.85 points, or 2.37 percent to close at 12120.02. Hong Kong’s Hang Seng sank 476.63 points, or 2.36 percent, to close at 19689.21.
Asian stocks took a beating after tensions between China and the U.S. jumped after House Speaker Nancy Pelosi visited Taiwan despite Beijing threats. Zhao Lijian, the foreign ministry said at an earlier press conference that China would “never sit idly by” and will uphold its “territorial integrity.”
Pelosi said the visit was important because it reaffirmed U.S. support for democracy. Hours before her trip, Washington, once again, said it does not support Taiwan’s independence.
Stocks in Asia were also hit after South Korea announced its inflation rose by 6.3 percent in July compared to 2021. Hong Kong’s second-quarter GDP was down by 1.4 percent, meaning the city is in a recession.
OIL: Oil prices were in the green today based on the continuing weaker dollar and were trading up 0.80 to 94.72 per barrel. Brent crude was up 0.88 points to 100.93 per barrel and West Texas Intermediate Crude was trading up 0.73 points to 94.59 as of 2:26 p.m. ET.
Oil was trading higher before Wednesday’s Organization for Petroleum Exporting Countries [OPEC] meeting. President Joe Biden has been urging OPEC members to start producing more barrels to bring down costs at the pump that has been contributing to inflationary pressures.
OPEC has shown that it will not be pressured by the U.S. to ramp up production. Countries that have the capacity to produce a higher output are extended. The BBC reported that Riyadh is producing 11 million barrels of oil each day.
Analysts believe that there are several factors at play that have brought down prices since hitting their 13-year high of $130 in March. Demand is lower due to soaring inflation, the Ukraine War, China zero COVID policy and recessions.
And to keep the oil flowing, European governments are backing away from efforts to ban the insurance on tankers carrying Russian oil.
TRENDPOST: The Bigs Continue to Get BIGGER. Despite economies struggling to pay for soaring energy costs, BP announced Tuesday that it pulled in better-than-expected numbers last quarter, which sent share prices up three percent. The New York Times said BP, Chevron, Exxon Mobil, Shell, and TotalEnergies pulled in $60 billion in profit while small businesses run on steam.
These profits are why it is laughable when President Joe Biden tells the average American schmuck that they need to pay record prices at the pump for the good of “democracy.”
Oil prices will remain volatile due to uncertainties from the Ukraine War and the potential of further COVID-19 lockdowns in China. Brent has met resistance between $105 and $109 and could surge above $150 per barrel later this year should the Ukraine War persist and tensions increase between Israel and Iran.
GOLD/SILVER: Gold was trading down today at 3:30 p.m. ET at about 1781.30, and silver was trading at 19.97.
Gold prices tend to rise in response to a weakened dollar, recessionary fears, and rising yields on Treasuries, and, on paper at least, it seems that all the right ingredients are in place, which is why gold hit its four-week high earlier today.
The dollar has come down to 105.5 after hitting a high last month at above 108.5. The Federal Reserve announced last week that it will raise interest rates by 75 basis points, but there are indications that it will not continue the pace of 75 basis point hikes.
Charles Evans, the head of the Chicago Federal Reserve, told reporters at a briefing today that the central bank may opt for a 50 basis point raise at next month’s meeting.
TREND FORECAST: There have been many variables at play when it comes to the prices of precious metals. Considering the state of geopolitical and socio economic affairs, as we see it, gold prices should be well above $2,000 per ounce mark. And as we have greatly detailed in previous Trends Journals, Banksters like JPMorgan Chase have been convicted for rigging the precious metals markets.
We maintain our forecast that for gold to maintain strength, prices must stay in the high $1,900 per ounce range and when they solidify above $2,200 per ounce, gold will spike to new highs.
BITCOIN: Bitcoin was trading down about 211 points at about 3:30 p.m. today and valued at 23,062.
The crypto has seen recent gains, but is still far from its November high at above $64,000 a coin. We have reported on some recent upheaval in the crypto industry, and on Tuesday, The Wall Street Journal reported that Michael Saylor, the CEO of MicroStrategy Inc., would be leaving the post.
Saylor, a founder of the company, has been one of the most vocal advocates for bitcoin but MicroStrategy said it lost $1.06 billion in the second quarter. The paper said he turned the company into a “buy-and-hold vehicle” for the crypto. He will move to take on the role of executive chairman where he aims to focus on bitcoin acquisition strategy.
TREND FORECAST: MicroStrategy seems to be long on the cryptocurrency, even when other big investors, like Tesla, seem to be hedging their positions. CoinDesk reported that MicroStrategy has not sold its holdings and, instead, bought 480 more bitcoins for an average of $20,817 per coin.
The report, citing an earnings report, said MicroStrategy took a non-cash digital asset impairment charge of $917.8 million on its bitcoin holdings last quarter, which is up from $170.1 million from the previous quarter.
Now trading in the $23,000 per coin range, we maintain our forecast that bitcoin prices will rise when the coin solidly passes the $25,000 range. In the meantime, there is still a downward risk.