U.S. MARKETS: UP AND DOWN


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Yesterday, the Dow Jones Industrial Average fell 329 points to close at 23,390. The NASDAQ rose 39 points to 8,192.
The Dow’s loss can be attributed to investors taking profits from last week’s gains and waiting out first-quarter earnings reports due from big banks, which are expected to be negative.
Last week, the S&P index logged its best week since 1974, adding 12 percent to its value.
In making it 100 percent clear that capitalism is dead and socialism for the Wall Street Gang and Big Corp Mobsters is alive and well, the gain is due to the U.S. Federal Reserve’s unprecedented pumping of untold trillions in monetary methadone to purchase treasuries, corporate bonds, and junk bonds.
Juiced by the money junkies injection, on word from the high and mighty from Washington and New York State that the worst of the virus has peaked (which has killed some 23,000 people in a nation of 33,000,000 or 0.00716 percent)… the Dow spiked 560 points, while the Nasdaq Composite shot up 3.95 percent.
European stock markets were closed Monday as part of the Easter observance but traded higher today as gamblers were buoyed by expectations of an exit strategy to the region’s coronavirus lockdowns.
Stocks in Asia rose on the news that Chinese exports for March fell less-than-expected.
TREND FORECAST: In last week’s stock rally, travel and leisure stocks made strong gains, but those were sighs of relief, not signs of strength.
Airlines, cruise lines, hotels, and restaurants have a long, slow, and painful future ahead of them even as the Fed suckles them on more cheap money. Any rally in those sectors now will be short-lived, as these industries and their investors confront the long-term realities, and ultimate uncertainty, of recovery.
Golden Glow

In response to the central banks cheap money injections and government’s fiscal spending spree, gold prices rose to their highest in more than seven years.
TREND FORECAST: Gerald Celente was the first to forecast the Gold Bull Run on 6 June 2019, when gold was selling at $1,332 per ounce. Celente maintains his forecast that once gold breaks solidly over $1,740 per ounce, it will spike to above $2,000 per ounce. Today gold closed $1,729. Should it trade above that range for the remainder of this month, the next breakout point will be $2,500 per ounce.
Oil Blues

On the oil front, despite an agreement over the weekend by OPEC+ that includes Russia and other producing countries to cut output by 9.7 million barrels per day in May and June, or some 10 percent of global supply, oil prices continue to slide.
Down some 50 percent this year, today Brent Crude fell 5.45 percent to $30.01 per barrel and West Texas Intermediate crude was down $1.80, or 8.08 percent to trade at $20.61 per barrel.
OPEC will meet again on 10 June to see if other actions are needed.
President Trump had encouraged the two nations to agree but has refused to attempt to force U.S. producers to cut back.
There are signs that the Saudi-Russian price war has had the desired effect of correcting the market, at least in the U.S.
During the week ending 3 April, U.S. oil production dropped to 12.4 million barrels a day, compared to 2020’s average of 13 million. The number of oil and gas drilling rigs working in the U.S. during the same week pulled back from 790 to 602 and in Canada from 240 to 35.
Those numbers are likely to fall further.
The U.S. Energy Information Administration estimates that U.S. oil production will cut back more than a million barrels a day, thanks to the effects of the virus pandemic. Americans will burn 9 percent less gasoline and 10 percent less jet fuel this year than last, the agency predicts.
TREND FORECAST: Considering the depth of the global economic lockdown, we forecast that any oil-cutback deal won’t raise prices significantly, in part because global oil demand is forecast to fall by 30 to 35 million barrels a day this month.
Also, millions of barrels of unsold oil are still weighing down spot markets and demand will remain dormant indefinitely as the “Greatest Depression” worsens.
Unmentioned in the mainstream media are the deleterious effects crashing oil prices have on oil rich nations, states and cities, their labor force, and all those indirectly impacted.
 

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