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Despite recovering some lost ground on Friday, stocks finished last week with a deficit.
For the week, the Dow Jones Industrial Average gave up 1.1 percent, the Standard & Poor’s 500 index 0.6 percent, and NASDAQ 0.7 percent.
Figures showing a slowdown in China’s growth, weakening consumer confidence, softer retail sales, and rising numbers of COVID infections frightened investors out of stocks and into treasury securities and similar safer venues. (See related story.)
Also, the U.S. Federal Reserve is reportedly ready to begin cutting back its $120-billion monthly purchases of government and mortgage-backed bonds, according to minutes released last week of the Fed’s 27 and 28 July Open Market Committee meeting. (See related story.)
When the bond purchases end, an interest rate hike is likely to follow. (See “When Will the Fed End Cheap Money Policy?” Trends Journal, 27 July 2021.)
Losses were particularly sharp among companies that rise and fall with the economy, such as financial businesses and energy producers, The Wall Street Journal said, highlighting investors’ worries about the economy’s future.
TREND FORECAST: Now that the Delta variant has spread fear across the globe, the economic road ahead will be rocky for months to come. And should politicians, Presstitutes and “officials” ramp up the COVID War to fight the “variant” when autumn and winter hits their nation, there will be a steep economic decline.
Between those who are afraid to go out in public and those who do not, and will not get a vaccine passport, many business sectors from hospitality, tourism, business travel, conventions/trade shows, restaurants, theaters, malls, etc., will be hit hard.
In fact, that trend is already underway, but it is being downplayed and ignored by the media and politicians.
From urban centers to rural outskirts, from college towns to high-tech cities, the streets at night are virtually empty. Restaurants and bars stop serving early and social distancing and mask wearing mandates have dramatically shrunk the crowds.
The Bottom Line: From kindergarten to graduate school, from fast food to fine dining, from travel to the Olympics… a masked up society has lost its energy and spark of life.
Again, if the COVID War is escalated in the months ahead, we forecast an equity market crash before year’s end.
GOLD/SILVER: Today, gold was up .10 percent at $1,806 per ounce, and silver was $23.87 per ounce, up 28 cents as we went to press.
Considering the economic perils which lie ahead, regardless of inflation rising, the Federal Reserve will not raise interest rates and will continue its bond-buying scheme… and Washington will pump in more cheap money to artificially prop up failing equity markets and attempt to stop the economy from crashing.
As we analyze the trends, we forecast that gold and silver hit their bottom two weeks ago when they traded in the $1,720 and $23per ounce range respectively. Thus, the prospects for precious metals to spike much higher are on the near horizon.
Global
China’s Shanghai Composite Index and Hong Kong’s Hang Seng also weathered bad weeks as the government continued tightening supervision and control of tech companies. (See related story) while Europe’s benchmark Stoxx 600 index notched its worst week since February.
This week is a new story.
Boosted by the plan for more booster shots and the FDA rushed approval of the Operation Warp Speed gene therapy COVID Jab, stocks across the globe spiked higher yesterday.
Today was another “Happy the FDA Approved the Jab” day, with equities rising across much of the globe.
In the U.S., the Dow closed up 30 points and both the S&P 500 and Nasdaq hit new highs, inching up 0.1 percent and 0.5 percent, respectively.
So, where are the stock markets heading? Read Gregory Mannarino’s article: “THE ODDS OF A NEAR TERM STOCK MARKET CRASH JUST WENT UP.”
TREND FORECAST: As we are living in two separate worlds – since artificially pumped up equities and economies have no relation to life on earth and what the masses are living through—totally absent from Wall Street are the facts of the miserably low 39 percent efficacy rate of the COVID Jab which we have detailed extensively in this and previous Trends Journals.
Thus, those who will not take the vax, those who will live in fear and mask up as “cases” keep spiking, those who don’t want to commute and/or are afraid to go to work and will work remotely… will crush commercial real estate sectors, tourism, conventions/trade show, retail, restaurants, hospitality etc.
Thus, we forecast the news of an approved vax will do little or next to nothing to boost economic growth. And in fact, as mandates increase to force the vax on workers and consumers, there will be growing social disorder among the “my body, my choice” resistors that will disrupt business and commerce.
OIL: Oil prices slid through last week as data from various sources showed global economic growth slowing. Brent crude for October delivery closed the week at $65.18, West Texas Intermediate at $62.14, the lowest prices since May.
Economic data from China’s government showed economic activity slowing more than analysts had expected; in July, the country’s oil refineries produced their smallest volume of products in 14 months.
Also, the U.S. Energy Information Administration announced an unexpected build-up of gasoline supplies, which likely will weaken prices and demand for crude.
In addition, minutes from the U.S. Federal Reserve’s July meeting were released, showing that the Fed is ready to scale back its $120-billion monthly bond-buying program.
This array of bad news arrived as OPEC was adding back 400,000 barrels of daily oil production to bring output back to its pre-crisis volume. (See “IEA Slashes Oil Outlook for Rest of 2021,” Trends Journal, 17 August, 2021.)
Another 180
That was last week. Again, as we keep noting, in the gambling world of equities and commodities, facts don’t matter, how to play the game is what counts. After racking up their biggest losses in more than nine months last week, Brent Crude and West Texas Intermediate kicked off the week by spiking some 5 percent yesterday. Today, Brent was up 3.53 percent, closing at $71.14 per barrel, and WTI gained 3 percent, closing at close to $67.61 per barrel.
Why? The FDA approval of the vax, word from China that they beat the Delta variant and a fire on an oil platform off Mexico on Sunday that killed five workers and took out 421,000 barrels per day of production.
TREND FORECAST: We maintain our forecast that if oil prices remain below $65, the likelihood grows that OPEC will cut back production to raise prices, a move that would spur inflation and cast additional doubt over the world’s economic recovery.
Again, we forecast that with the exception of China, most of the world’s economy will decline.
BITCOIN: Despite briefly breaking over $50,000, bitcoin is essentially flat, still trading in the $46,000-$48,000 per coin range as it has been for two weeks. The coin had sunk below $30K one month ago.
TREND FORECAST: We maintain our forecast for Bitcoin to dive deeply if it goes below $25,500 per coin and rise sharply if it breaks above $50K per coin and steadily maintains the above mid-$50K range.
We also maintain our forecast that a major factor in forecasting the future price of bitcoin and other crypto currencies will depend on government regulations.
Thus, the more regulation, the lower the value of the coins, the less regulation, the higher the prices rise, especially as more small time traders keep jumping into the crypto market. And what is also of concern in the U.S. now, is if Washington enforces proposed cryptocurrency tax regulation.
However, in the long term we still forecast growing strength as more businesses accept cryptocurrencies, especially bitcoin, and more equity market firms invest in the crypto sector.
For more on bitcoin and other cryptocurrencies, please see our “TRENDS IN CRYPTOS” section.