Craig Hemke – Post Fed-Induced Short-Covering Rally, Markets Look Ahead To The Jobs Report
Craig Hemke, Founder of TF Metals Report, joins us to recap the bounce in precious metals that was accelerated after the FOMC press conference and GDP numbers were released, and to look ahead to the dynamics within the jobs report data due out tomorrow. We review that the bounce in silver, gold, and many mining stocks were due to short-covering, and that the COT positioning was at very contrarian levels, ripe for a reversal, prior to the news popping things higher.
Next, Craig breaks down how the birth/death adjustment for businesses figures into the 20 year average of jobs created on a given month, but how arbitrary the modeling can be, and when taken in tandem with job surveys, still isn’t necessarily reflective of the true health of the labor markets. With so many other metrics showing cracks under the surface with weekly jobless claims, unemployment claims, and small and large companies either freezing new hiring or firing workers, he feels the jobs numbers estimates will be inflated into a more positive spin, as a way of deflecting the recession concerns.
We wrap up with getting Craigs thoughts on why it is important for short to medium-term investors to still pay attention to these data points and central bank monetary policies, even if they are fatigued from so much focus on the Fed.
‘Prolonged’ And ‘Engineered’ Recession; Brace For Unemployment, Real Estate Decline
Kitco News – Aug 2, 2022
“Lyn Alden, Founder of Lyn Alden Investment Strategy, and Alfonso Peccatiello, Author of The Macro Compass, join Kitco News for a panel. They discuss whether we are in a recession, how to invest during a recession, labor market problems, and central bank digital currencies. They spoke with David Lin, Anchor and Producer at Kitco News.”
0:00 – Recession definition
5:21 – Asset allocation
9:04 – Macroeconomic outlook
13:24 – Labor markets
24:20 – The stock market
33:25 – Reducing and eliminating cash
37:58 – Real estate and inflation
Mark Yusko – The ‘Banksters’ See Gold as a Major Problem
Stansberry Research – July 29, 2022
“Gold is a problem for the banksters, because gold has been a perfect store of value for 5,000 years,” says Mark Yusko, Morgan Creek Capital Management founder and CEO. In part two of this interview, he tells our Daniela Cambone inflated stock prices remain extremely deceitful because, “your wealth is being stolen through this thing called inflation.” The only thing that makes currency valuable, “is belief and custom,” Yusko continues and remains critical of the U.S. dollar. He concludes by claiming that the current price of bitcoin is below its worth…”
Stop Saying the U.S. Dollar Is Strong, ‘It’s a Lie’; China on Track To Become Reserve Currency
Stansberry Research – July 26, 2022
“The renminbi is the ascendent currency, the dollar is in decline,” proclaims Mark Yusko, Morgan Creek Capital Management founder and CEO. The dollar has been the world’s reserve currency for over 70 years, “but that’s rapidly coming to an end,” he tells our Daniela Cambone in part one of this interview. “We’re in a recession right now,” and the Fed has not acknowledged that, Yusko continues. “[The Fed] will start cutting rates in the fall,” he predicts. Yusko concludes that China is the emerging contender to be the world’s next global superpower, “and the next war will be fought with chips, not ships.”
We don’t have newspapers anymore, we have cell phones and most of those chips come from Taiwan. The cell phone is regarded with wonder and esteem. How many people are using their cell phones to trade stocks. One could assume that there are maybe twenty million traders and ten million margin accounts in The US, or it could be considerably larger. Chips of course make this all possible. But chips are no longer produced in The United States in any quantity. The chip manufacturer has replaced the land line, the broker, the newspaper, and the computerized ticker tape, yet Americans don’t realize how foolish their way of life has become. Everything they do these days is in the hands of third party foreign conglomerates that don’t include them. DT
Most of this stuff that I talk about was actually predicted by cheap low grade science fiction films from the 1950’s but most people can’t even understand those simple theories. They have forgotten how to read and think for themselves, they simply text each other because it requires no learning skills. DT
Hi DT. I asked Craig your question there at the end of our interview above, about why it is even important to talk about what the Fed and central banks are doing, and if it is relevant to investors?
I thought he had a good response, and you’re going to appreciate it because it involved computers and AI algorithms trading off the moves in markets that the Fed causes. Let’s go robots! Cheers!
I have been concerned since Wall Street was given a computer that there would no longer be any semblance of equality between insiders and the serfs. What is disappointing is we have no regulators that try to slow down the transfer of wealth. I have often thought about returning the system to traders flinging paper on the floors of the exchanges, but that is gone. The only option is to limit the electronic capability somewhat like Nascar limits the capabilities of the cars.
The vast majority of semi-conductor chips are produced in Taiwan… 80-90% of them. Whoever has a partnership with Taiwan, has the required parts for all their cell phones, laptops, tablets, TVs, automobiles, planes, appliances, you name it.
That is why it would be so bad for China to invade Taiwan, and why it was such foolish optics to have had Peolsi visit on a naval vessel, when China mentioned they considered this provocation. It would be clear to see why China would like to have Taiwan back under total control for multiple historic, political, and economical reasons…. the semi-conductor chips just being another major prize.
Ex, don’t forget that The Chinese government is worried about debt imploding their system, Pelosi visiting Taiwan gives them a huge opportunity to start a war that will see them swallow up Taiwan, and turn their problems away from domestic issues to Foreign problems. How stupid can this get for America. It truly is the end of empire. DT
The crying of the wolf. Time and again The Reserve Board had said we needed more inflation. They said they didn’t fear inflation, they were setting us up. Would inflation bring hard times of course it would but we were led to believe that they were in control. The printing presses were in full mode. Was business in danger, there was no real business. Were factories running at full blast, there were no factories only Facebook, Google, Amazon, Microsoft, and Apple that had offshored production. Was there a threat of overproduction, not from America. Were not commodity prices holding their own. It is all too much to think about. The Ponzi scheme was running full blast for all to see but it only works until the next payment can’t be made. DT
Yep, agreed DT. The way all of it has gone down from manufacturing and the over-reliance of companies on oversee production of goods, to the Fed wanting to inflation to get higher in a ruse when they knew their monetary policies would create stickier higher inflationary has been disappointing to see unfold.
The can was kicked down the road with the printing presses longer than most had expected, but we are appearing that tipping point where it will be difficult to print enough to truly reliquify the markets to get us out of this economic downturn. The Fed and US government will use the cover of the pandemic, war in Ukraine, and whatever the next black swan event is (war in Taiwan, some other viral pandemic lockdown, Europe imploding, etc…) to deflect the blame from their own terrible monetary policies, fiscal policies, and business policies.
Now there is new policy being discussed to raise taxes across the board and increase the IRS audits to go into “beast mode” and so they’ll try and squeeze everyday citizens and small businesses even further than they already have. It’s disgusting incompetence, terrible national and international policies, and squandered so much potential. As many have mentioned previously, it all appears to have been an organized take down of the US as a world superpower, and a looting of the people the system was supposedly here to serve.
Great stuff: concur with content of interview
Thanks Lakedweller2. Yes, some very good thoughts from Craig today on the short-covering rally in the metals and we had mentioned they were set up for this scenario before it played out over the last few weeks.
In addition, Craig’s breakdown of the birth/death adjustment numbers and how they are generated just highlights how much of a convoluted estimate and number modeling it all is, more so than data, and to his point, if it comes out “better than anticipated,” it will simply be used as a deflection tool to try and convince people that we aren’t already in a recession.
That was the government and Fed’s modus operandi last month — to have the media come out and echo their silly comments that “We can’t be in a recession because look how good the jobs report numbers are…”
Even though almost all the other metrics in the labor markets show layoffs are up, hiring freezes are up, the overall number up of jobs has been reduced, labor participation is down, weekly jobless claims are up, and small to large businesses keep announcing reductions in staff, they’ll use the convoluted jobs report estimation to further their narrative that everything is fine. The housing markets have clearly rolled over, the lower to middle class have been struggling with inflation spiking prices from the gas pumps to the supermarket, and now they’ve suddenly changed the definition of a recession to longer be 2 quarters of negative GDP.
Now all of the sudden, a recession is “data dependent,” which means they can select the data they want to highlight, and assign whatever meaning they want to keep it from being a recession on their watch. This being “data dependent” is the same crap they used the last few years, that simply gives them the wiggle room to change policy as they claim they are staying “nimble,” when really they are delaying confronting the inevitable reality that we are already in trouble that they perpetuated.
This is the exact same game they just played by suggesting inflation was “transitory,” when again, it was the government’s reckless spending like a drunken sailor, the Fed’s monetizing of all the debt and aggressive “emergency” buying in the bond markets and other markets via their partner banks, and all the money creation that led to the inflation in the first place. A bunch of suckers fell for that line of reasoning and the pandemic/war cover stories from the Fed and government messaging, and those same sheeple that bought that B.S., will likely fall for this farce of a narrative that we are not already in a recession because of a “strong labor market” and “strong consumer.” It’s all such a charade…
Yes. Transfer wealth. In the old days it was known as Fraud and/or Theft.
At the moment…paper commodities are positive. Does it matter?
Chips or no chips, somebody will make some money shorting MUX when it goes down the gurgler.
I see MUX did get their share roll-back completed, now just over 47 million shares outstanding from the 470 million they had, and this sets them up for more capital raises and further dilution. If they announce a big capital raise again, and get monkey hammered down, then I may get back into McEwen at that point, because either the coming bull market in metals prices will bail them out of the mess they’ve been in and get things turned around, or a larger producer will come in and buy them out to put them out of their misery.
It seems with so much focus lately on their large copper asset at Los Azules, that what they are trying to pull off as a strategy is building more value at that project to then off-load it to another buyer, and then use those funds to buoy the company. It’s a shame they didn’t have that focus on building value for Los Azulesa a couple of years ago moving into a rising copper market pricing environment, because now they’ve waited until Dr Copper has imploded to try and shop their project around… “a day late and a dollar short” as the saying goes… The were aggressive at acquiring other mines at the wrong times, and then failed to execute on getting them ramped up to projected production, projected costs and economics fast enough, and ended up burning through tons of money and diluting existing shareholders time and again as a result. MUX has been underperforming the last few years as a result of this confluence of missteps, but maybe they can still get their ship turned around before this bull cycle in PMs really gets moving. We’ll see how it goes…
It looks like they’ve already sold off a substantial chunk of McEwen Copper in private placements. Anybody thinking they’re getting Los Azules in the deal when they buy MUX shares better double check that.
DraftKings, Jobs Report, Unemployment Rate: 3 Things to Watch
Liz Moyer – Investing.com – Aug 04, 2022
“Stocks paused on Thursday ahead of the July jobs report, due out early Friday morning.”
“Earlier in the day, the Bank of England raised its own interest rates by a half-point, which it hasn’t done for 27 years. The jobs report on Friday in the U.S. is expected to show slower growth than in June, but an unemployment rate that has remained steady since the April report, at 3.6%. Strong employment trends are encouraging signs for central bankers, and something the Federal Reserve is closely watching as it moves into its next meeting in September.”
“Analysts in recent days have been weighing the odds that the Fed will start to ease off the aggressive 0.75-point hikes it has made in June and July, though high-profile officials from the Fed have been making comments in recent days that appeared to try and throw cold water on that notion.”
Brent Johnson’s Dollar Milkshake Theory
“2022 has seen the worst inflation in 4 decades, stubbornly persistent supply chain shortages, a contracting economy that may already be in recession & one of the worst first halves of the year for financial markets. And yet the US dollar is the strongest it has been in 20 years.”
1:38 Market Overview
7:30 Cleanest Shirt in the Laundry
15:35 The Eurodollar System
24:30 Emerging Market & Dollar Tension
30:30 Impact of FOMC Tightening
40:50 How Could the Dollar Weaken?
the biden regime hard at work hacking economic data…makes sense…..pathetic……communists make it al up…glta
https://www.zerohedge.com/markets/july-payrolls-smash-expectations-soaring-528k-wages-come-red-hot
Hello larry………… lmao….. I was listening to PBS,..NPR,….. if, they report it , you know it is a LIE…. …lol
I listen to PBS, …just to keep up with the LIES….
FREAKY FRIDAY AGAIN……………. AND the JOB numbers are fantastic………. up two months in a row,
like who would have known, …only, the the lying dems just before elections…. lol …
Yep, Craig called it up above in the interview, that the positive jobs number would be spun into the narrative that the economy is just fine and there is no threat of a recession… All according to the script… 🙂
It is bad for the miners … no matter the report.. How long before we find out the data was false.
Really sad, …. the govt is so perverted all they know is lying……….. at this point expect anything……
Dollar up … cup of coffee now only $20.
I stopped buying starbucks,………… 7 or 8 yrs. ago………….. lol………
I was talking about McDonald’s… 🙂
Added to SILV-Silvercrest- @ $6.56
24.5% Still in Cash
Dems have to sell out on Hedge Fund taxing and minimum corporate tax to get enough vote commitment to possibly pass the Inflation Bill. Corporations win again… and continue stranglehold on country. Keep in mind that Corporations don’t want you to own anything and want you to be obligated to them through debt.
Note: Miners would find the Inflation Bill positive …. How are we doing so far after the above news. I am down …
CNBS is pumping that Jobs #s proves there is no recession and I have 3 of 36 miners positive. Someone speaks with forked-tongue… (In checking, one of my positives is an error and one is a biotech. That makes one positive at this point.)
FWIW: My worst performer today is Blackrock Silver after they lifted a Halt after announcing a $5mil financing. Down about 10% if interested in Blackrock.
In spite of kitco promoters pumping positve drill results and other BS, the majority of gold producers don’t stay alive from production revenue, but from raising capital and the dilution of their share value.
Nothing new with this pop up from the past except the former floor give or take 1800 is now the ceiling.
Those virtually all in at 95% while their holdings down 70% and more need those multi baggers they forever claim are coming for any hope of breaking even.
Chicken or Egg? Have fundamentals remained constant over the many years while technicals have swung wildly, often in a counter – intuitive fashion? If so, did a fundamental issue of significance alter the technicals … or was it an electronic intervention. If it was an intervention without a valid fundamental cause, why blame the investor. Wouldn’t it be more valid to point a finger towards the Government for not protecting investors and another finger (3rd from left no matter how you count) toward Central Banking and Wall Street for their criminal manipulation of markets. Just look to the Chicago Trial of JP Morgan for substantiation of corruption for many years if there are any non-believers left.
To the contrary, we all could have invested in the General Markets for the previous 12 year bubble, sat on our hands, ignored fundamentals, and be blind to technical counter-intuitive moves (once again), and claim we are the best investors ever and never need a blog like this to discuss things as it wouldn’t matter or make a difference. Being a passive investor could bring admiration and accolades and great wealth.
I’d say there is a disconnect.
Jonsyl, I don’t follow the logic in those comments.
First of all Kitco and companies reporting on drill results have absolutely nothing to do with the health of producers.
Second, your comment that the producers as a group don’t sustain on revenues, and only capital raises is grossly inaccurate, and the vast majority of producers in gold or silver or copper sustain themselves on revenues and some companies are still generating free cash flows here. Now, there are a few distressed producers (like McEwen mentioned above or new producers like Alexco) that needed to raise capital to keep the lights on, but they are in the minority of producers. There are also a few producers that are advancing their other development projects to bring into production as new mines that needed to raise capital for those build outs, but that is not nearly the same things as them raising to sustain their existing operations.
Third, I don’t know what producers you are looking at (maybe other than Newmont) that have struggled recently, but the for the last 3 weeks most producers have surged up 10-20% or more, as have a number of developers, so just not sure what you are talking about in those regards. Maybe you are just in the wrong companies or something.
Sure the mining stocks have been beat up since April, but keep in mind that was after rallying from January through April, so markets go both up and down, and the key is buying the dips and fading the rips.
drill results have nothing to do with health of producers??? Then why the fixation, maybe future growth and revenue, missing something here.
This most recent pop up in gold sector equities into April was one of many of the past two years, ALL of which have been stair stepping their way to lower lows. For those basically fully invested at 95% and adding to each of these sell offs with their surgical precision is not a winning strategy no matter the spin.
A 50% drawdown requires a 100% pop up. Most of the dregs over the period are down much much more. The math is not good. The majors being the holdouts till this last slide.
Hope only springs eternal for those with majority cash.
Not the group think bagholders with their ultra condemnation of Joe yelling sell for past year and as he missed the latest 10 to 20% pop up last couple weeks.
Paper Copper, Platinum and Palladium positive. That’s a start.
SILJ finished down a whopping 3 cents, 4.4% off its morning low…
https://stockcharts.com/h-sc/ui?s=SILJ&p=D&yr=1&mn=3&dy=0&id=p99909480923&a=1149776311
It also remains strong and overbought versus GDX despite silver’s weakness today. A good sign…
https://stockcharts.com/h-sc/ui?s=SILJ%3AGDX&p=D&yr=1&mn=3&dy=0&id=p78925879444&a=1214958403
Robinhood will shrink as its CEO says market assumptions proved wrong.
Plus: The labor market is cooling, crypto hacks continue, and more
Devin Banerjee, CFA – This Week In Finance – August 4, 2022
“Online brokerage Robinhood is laying off 23% of its workforce in its second round of staff reductions this year.”
Robinhood’s crypto division has been fined $30 million by New York regulators, who say they found “significant failures” in anti-money-laundering and cybersecurity compliance.
“U.S. hiring in July fell for a fourth month to its lowest level since the first quarter of 2021, LinkedIn’s Workforce Report shows. Nationally, the pace at which people began new jobs slowed by 1.5% from June and 8.3% from a year earlier. Hiring has dropped 7.2% compared with pre-COVID, as the Federal Reserve lifts borrowing costs to combat the highest inflation in more than 40 years.”
“The Labor Department, set to release its unemployment report for July tomorrow, said that new jobless claims rose slightly last week.”
“Job openings lowest in 9 months: The labor market began to cool in June, with the number of openings falling from historic highs along with the pace at which workers quit.”
https://www.linkedin.com/pulse/robinhood-shrink-its-ceo-says-market-assumptions-plus-banerjee-cfa/