SD Friday Market Wrap: This Week’s MVP Is…

(Hint: Its not jaundice its luster!)

 

 

 

 

Fundamentally Speaking:

What a week this has turned out to be.  The Fed came out as a hawkish-dove, and seen later at the Post-Fed VIP Party:

FED Meme

The Fed held rates at 100 – 125 basis points on Wednesday.  The picture is clear.  Fed is going to do whatever they want, which is all they have ever done. They are going to act in their interests, and the interest of their banks, they are going to continue their Fedspeak to keep the markets salivating like Pavlov’s dog at their every word, and in the end, for the odd ten years it’s been, we have gone all the way up to a whopping 1% (ok, up to 1.25%, but I’m sure they dwell in the low end of their “range”) interest rate.

If hesitation on the part of the Fed has succeeded in anything, it has succeeded in buying them some time.  They have increased rates three times since Trump became President-Elect Trump, and just when everybody thought it was rate hikes as far as the eye could see, bam! The most non-action packed action movie ending ever!  And now the MSM will be patiently waiting for the Fed to whisper to the markets why they paused, but behind closed doors, the big money already knows.

The other key piece of economic news was released just this morning when the Bureau of Economic Analysis released its First Guess Estimate of 2nd Quarter GDP.  2.6% growth for the 2nd quarter is the latest breakdown of lies statistics from the government, and this number is very close to where the GDPNow model has been more recently than the lofty optimism (or need for statistical largess) at the start of the quarter:

Real GDP Chart

The BEA comes in very close to the Atlanta Fed GDPNow forecast, which, while starting from a lofty perch of 4.25%:

GDP Now Chart
Of Course, the closer estimate that is not only grounded in reality but practicing sound statistical best practices in his formulas and calculations is John Williams of ShadowStats, and for many years, including 2017, John has demonstrated that government numbers do not jive with the real deal:

GDP Annual Growth

Technically Speaking:

Post FOMC, gold has popped and fought hard to maintain, silver has been fading the gains, and the dollar has been downright ugly with a significant drop off of the announcement, to a steady recovery followed by the fade we are watching unfold into the close of this week:

 

FOMC Statement Chart

 

A closer look at the dollar shows just how ugly it has been:

DXY Chart

On Monday we talked about the divergence between gold and silver.  This has been the case for some time.  In fact, the gold-to-silver ratio (GSR) has been above 75 for the entire month of July:

 

Gold Silver Price Chart

 

A closer look at gold shows the price action coming into Friday.  Notice the slight gap up going into Thursday, and while having faded somewhat coming into today’s open, gold is still holding onto gains on the week:

 

Gold Chart

The price of Silver has not done so well.  Pressure has been put on silver with a heavy hand all year, and this week has been no different.  Silver has traded in a $.60 range on the week, and today a close above the 50 day moving average should be what we are all rooting for, but at this point any gain on the week is welcome:

Silver Chart

 

Oil has been on a slow climb on the week.  On Monday we noted that WTI has traded in a $45 to $50 range most of the year, and this week we are looking to close near the high end of that range:

WTI Chart

 

Which leaves us with the broader stock markets.  What can be said to wrap up this week’s FOMC/GDP one-two punch other than is it no surprise that the Fed’s baby is at all time highs, yet again, and again, and again, and again?

 

Dow Jones Chart

 

Bonus Chart:

First Majestic Chart

(First Majestic popped nicely post-FOMC, and while having faded somewhat since, earnings release comes next week)

Silver Bullion Selection