MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING DECEMBER 18, 2023 ©
December 15, 2023
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This week, it (the Fed) pivoted. “You’re getting now back to the point where both mandates (Inflation and employment) are important,” Fed Chair Jerome Powell told reporters Wednesday after the central bank’s meeting. This pivot means the Fed is ready to backstop the economic recovery. It doesn’t rule out a recession, but makes one much less likely. Greg Ip, “Pivot Shows Central Bank’s New Focus,” Wall Street Journal, December 14, 2023.
Mercury turns retrograde, and everyone pivots, even the Fed. But this pivot to a more accommodative tone is just setting up the conditions for 1) a better housing market, with lower rates, going into the election, and 2) another round of inflation afterwards, just as discussed in last week’s column.
MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING DECEMBER 11, 2023 ©
December 08, 2023
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Employers added a seasonally adjusted 199,000 jobs last month, the Labor Department reported Friday, slower than earlier in the year but consistent with gains before the pandemic. November’s job gain was roughly 169,000, slightly cooler than 180,000 in October. The unemployment rate fell to 3.7%. It had climbed to 3.9% in October from 3.4% in April, fanning fears on Wall Street of a more rapid slowdown ahead. Often, a rise in the unemployment rate of that magnitude has coincided with the start of a recession. Amara Omeokwe and Nick Timiraos, “Economy’s Soft Landing Comes Into View as Job Growth Slowly Descends,” Wall Street Journal Online, December 8, 2023.
Neptune, in its ruling sign of Pisces, turned direct in the middle of last week (and not retrograde, as noted in last week’s column). And the week ended with Venus in opposition to Jupiter, with the Sun still transiting the middle of Sagittarius (the sign of Jupiter’s rulership). What happens when Jupiter and Neptune and their ruling signs are highlighted in the same week? Irrational euphoria or hysteria. For many of the world’s stock markets and cryptocurrencies, it was euphoria. For other global indices and Crude Oil, it was more like hysteria. With Mercury about to turn retrograde this week, it is not surprising to see one part of the world exhibiting strong rallies and another part teetering on breakdowns. Continue reading…
MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING DECEMBER 4, 2023 ©
December 01, 2023
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A week’s long rally in stocks and government bonds has shown no signs of slowing down. The Dow rose for the fifth consecutive week, its longest winning streak since 2021. The S&P 500 jumped to its highest closing level since March 2022 after setting a new yearly high on Thursday. Je Wallace and Gunjan Bonerji, “Dow Finishes Above 36,000 After Notching 2023 High,” Wall Street Journal Online, December 1, 2023.
Mortgage rates have fallen more than half a percentage point over the past month, the largest four-week decline since late 2022. Home prices, meanwhile, have continued to rise to record levels. Gina Heeb, “Mortgage Rates Fall Five Weeks in Row,” Wall Street Journal, December 2023.
MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING NOVEMBER 27, 2023 ©
November 24, 2023
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The Dow Jones Industrial Average rose on Friday, as the major averages notched a four-week winning streak. The moves come as Treasury yields this week hit multi-month lows on hope inflation is cooling and the Federal Reserve may be done raising rates. The benchmark rate was up 6 basis points at around 4.476% on Friday. – Hakyung Kim, Fred Imbert, “Dow Closes 100 Points Higher Friday as Major Averages Rise for a 4th Straight Week,” www.cnbc.com, November 24, 2023.
In the shortened holiday week, U.S. stock indices continued an impressive rally that began from their 50-week cycle low on October 27. Multi-week or multi-month highs were also notched in other world stock indices, except in Australia, the UK, and Hong Kong. Perhaps the most impressive stock market was Japan, where the Nikkei soared to its highest level since its all-time high in late 1989 and early 1990.
MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING NOVEMBER 20, 2023 ©
November 17, 2023
NOTE: U.S. markets will be closed Thursday, November 23, in observance of the Thanksgiving holiday.
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The U.S. economy is approaching what most economists had thought either unlikely or impossible: inflation returning to its prepandemic norm without a recession or even much economic weakness, a so-called soft landing. Six months ago, the consensus among economists surveyed by The Wall Street Journal was that the economy would enter a recession over the next 12 months. In October’s survey, the average forecast of economists was for no recession. After Tuesday, the probability appears to have dropped further. If they are right, it would be highly unusual. In the past 80 years, the Federal Reserve has never managed to bring inflation down substantially without sparking a recession. – David Harrison and Jeffrey Sparshott, “Economy Closes In On a Soft Landing,” Wall Street Journal, November 16, 2023.
Add falling supplier prices to the good inflation news of the week. The producer-price index fell 0.5% in October from the previous month, the largest single month decline since early in the pandemic. That follows a cooler-than-expected consumer inflation report for October released on Tuesday, which showed that consumer price growth was flat from the prior month. The encouraging readings likely confirm that the Federal Reserve is done raising rates in its current cycle. – Gabriel Rubin, “More Good News on the Inflation Front.” Wall Street Journal, November 15, 2023.
MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING NOVEMBER 13, 2023 ©
November 10, 2023
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Fed Chair Jerome Powell said he and his colleagues remain steadfast in getting policy in line with their 2% inflation goal, but “we are not confident that we have achieved such a stance.” – Jeff Cox, “Powell Says Fed is ‘Not Confident’ It Has Done Enough to Bring Inflation Down,” www.cnbc.com, November 9, 2023.
Global stock indices continued their impressive rallies following their multi-month lows of October 23-30 in most cases. It may be related to the Sun/Mars conjunction of November 18. As discussed in several reports, global stock markets tend to fall at least 8% from their previous high when this aspect is within 8 degrees. That orb began about the time the Sun entered Scorpio on October 23.
MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING NOVEMBER 6, 2023 ©
November 03, 2023
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Bad news about the labor market is good news for stocks today. All three major U.S. indexes climbed Friday, helping them to their best weeks of the year. One reason: The latest jobs report showed hiring slowed. The U.S. added 150,000 jobs in October, below economists’ projections, while the unemployment rate was slightly higher than expected. That’s a sign that the economy is cooling. For investors, that suggests the Fed might stop raising interest rates. Bond yields tumbled after the report. – Anna Hirtenstein and Hannah Miao, ”U.S. Indexes Log Best Week of 2023 After Jobs Report,” Wall Street Journal Online, November 3, 2023.
The Federal Reserve kept interest rates unchanged on Wednesday. The decision marked the second consecutive meeting at which the Fed left rates unchanged after a long campaign of increases. – David Marino-Nachison, “Fed Keeps Rates Unchanged,” Wall Street Journal November 1, 2023.
MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING OCTOBER 30, 2023 ©
October 27, 2023
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Dollars to defeat Russian and Iranian aggression are necessary. Yet with $33 trillion in debt, there is no room for both guns and butter. – Kimberly Strassel, “Biden’s Supplemental War Games,” Wall Street Journal, October 27, 2024.
If you are a subscriber to MMA’s daily, weekly, or monthly reports, you probably have only one market on your mind right now, and that’s Gold. This splendid yellow metal has now appreciated 10-fold and more in the options strategies provided in MMA’s special Gold report issued on October 4. Gold itself has now rallied from a low of 1823.50 on October 6 to a high of 2019.70 as of Friday, October 27, a gain of nearly $200 in just three weeks.
MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING OCTOBER 23, 2023 ©
October 20, 2023
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Federal Reserve Chair Jerome Powell suggested the run-up in long-term Treasury yields could allow the central bank to suspend a historic run of interest-rate increases so long as recent progress on inflation continues. That is in part because the swift rise in long-term rates over the past month could slow the economy, effectively substituting for another Fed hike if higher borrowing costs are sustained. – Nick Timiraos, “Jerome Powell Signals Fed Will Extend Interest-Rate Pause,” Wall Street Journal, October 19, 2023.
The most-actively traded gold futures contract jumped 1.2% Friday to cross $2,000 a troy ounce for the first time since late July. The war between Hamas and Israel has made haven-asset gold, which is prized for its stability during times of market turmoil, more popular. The yellow metal has rallied about 8% since the conflict began. – Hardika Singh, “Gold Prices Top $2,000 For the First Time Since July,” Wall Street Journal Online, October 20, 2023.
MMA FREE WEEKLY COLUMN FOR THE WEEK BEGINNING OCTOBER 16, 2023 ©
October 13, 2023
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“Oil, U.S. Treasuries, and gold prices rose on Friday, with crude soaring nearly 6%, on safe-haven buying driven by the escalating Middle East conflict as Israel urged civilians to leave the northern Gaza Strip. – Caroline Valetkevitch, “Oil, Treasuries, Gold Prices Jump Amid Mideast Fears,” Reuters, October 13, 2023.
The war in Ukraine, along with the unprecedented attacks in Israel by Palestinian militant group Hamas last weekend, may have “far-reaching impacts on energy and food markets, global trade and geopolitical relationships,” Dimon said in a statement accompanying the bank’s third-quarter earnings release. “This may be the most dangerous time the world has seen in decades,” Jamie Dimon said. – Megan Henney, “JPMorgan CEO Jamie Dimon warns: ‘This May be the Most Dangerous Time the World has seen in Decades’: Sounds Alarm over Economic Outlook Amid Israel-Hamas War,” www.foxbusiness.com, October 13, 2023.