News / Silver Channel Sunday News Letter
October 13, 2024 Silver Channel Sunday Newsletter
October 13, 2024 Silver Channel Sunday Newsletter
October 13, 2024
Economic Indicators:
- Consumer Price Index (CPI): September’s core inflation was hotter than expected at 3.3% year-over-year, with headline CPI up 2.4% year-over-year.
- Producer Price Index (PPI): September’s headline PPI was unchanged month-over-month but up 1.8% year-over-year. Core PPI rose to 2.8% year-over-year, higher than expected.
- Job Market: The U.S. economy unexpectedly added the most jobs in six months in September. Initial jobless claims rose to 258,000 for the week ending October 5th, the highest level in 14 months.
- Small Business Optimism: The NFIB Small Business Optimism Index increased slightly to 91.5 in September, but remained below the 50-year average for the 33rd consecutive month.
Financial Markets:
- Stock Market: The S&P 500 and Dow Jones reached record closing highs on Wednesday, October 10th.
- Treasury Yields: The 10-year Treasury yield rose above 4%, reaching its highest level in two months.
- Commodities: WTI crude oil futures fluctuated around $73-$76 per barrel. Gold prices ranged between $2,610 and $2,650 per ounce.
- Cryptocurrency: Bitcoin traded around $61,000-$63,000 throughout the week.
Federal Reserve and Monetary Policy:
- The Fed’s September meeting minutes revealed a “substantial majority” of policymakers favored the 50-basis-point rate cut.
- Market expectations for future rate cuts were adjusted following strong job data and higher-than-expected inflation figures.
Corporate News:
- Earnings season began, with major banks set to report results on Friday, October 11th.
- Boeing faced ongoing strikes affecting about 33,000 U.S. West Coast factory workers.
- Tesla unveiled its robotaxi but faced a stock drop due to lack of production and regulatory details.
- 7-Eleven announced plans to close 444 underperforming stores in North America.
Other Notable Events:
- Hurricane Milton intensified to a Category 5 storm, threatening Florida’s western Gulf Coast.
- New York City sought 14,000 hotel rooms to shelter migrants through 2025, with housing costs expected to surpass $2.3 billion.
- The U.S. federal deficit for fiscal 2024 was estimated at $1.834 trillion, the highest in the post-COVID era.
- Hedge funds increased their bullish bets on Brent crude following the Iranian missile attack on Israel.
This week was characterized by mixed economic signals, with strong job growth contrasting with persistent inflation concerns, while financial markets reached new highs amidst ongoing geopolitical tensions and corporate challenges.
This Week’s Major U.S. Economic Reports
MONDAY, OCT. 14
Columbus Day holiday. Bond market closed
TUESDAY, OCT. 15
Empire State manufacturing survey
WEDNESDAY, OCT. 16
Import price index
THURSDAY, OCT. 17
Initial jobless claims
U.S. retail sales
Philadelphia Fed manufacturing index
Industrial production
Capacity utilization
Business inventories
Home builder confidence index
FRIDAY, OCT. 18
Housing starts / Building permits
Index (ETF): S&P 500 (SPY)
Time Frame: Weekly Chart
Stock Price Above / Below:
- 33 Week Simple Moving Average: Above
- 60 Week Simple Moving Average: Above
- 200 Week Simple Moving Average: Above
RSI above 50: Yes, 67.86
MACD Positive | Neutral | Negative: Neutral
Comments: S&P 500 (SPY) All time highs, yet with weakening RSI over last week and a neutral MACD. As the Price of SPY moves further away from the 33 Week SMA, keep an eye on the RSI and MACD. If these two continue to weaken as the price of SPY moves higher, this is an indication that the strength of this move higher is loosing strength. Make sure to your risk management process in times like these.
Index (ETF): Gold (GLD)
Time Frame: Weekly Chart
Stock Price Above / Below:
- 33 Week Simple Moving Average: Above
- 60 Week Simple Moving Average: Above
- 200 Week Simple Moving Average: Above
RSI above 50: Yes, 78.18
MACD Positive | Neutral | Negative: Positive
Comments: Gold stagnated this week. Both the RSI and MACD have begun to turn towards neutral. I would not be surprised to see a move towards support at $234.17
Index (ETF): 7-10 year US Treasury’s (IEF)
Time Frame: Weekly Chart
Stock Price Above / Below:
- 33 Week Simple Moving Average: Above
- 60 Week Simple Moving Average: Above
- 200 Week Simple Moving Average: Below
RSI above 50: No, 49.85
MACD Positive | Neutral | Negative: Neutral
Comments: The 7-10 year US Treasury’s (IEF) may have found a Pivot Point this week. IEF closed the week within a tight range giving some signs the price action finding support.
Index (ETF): 20 year + US Treasury (TLT)
Time Frame: Weekly Chart
Stock Price Above / Below:
- 33 Week Simple Moving Average: Below
- 60 Week Simple Moving Average: Above
- 200 Week Simple Moving Average: Below
RSI above 50: No, 46.09
MACD Positive | Neutral | Negative: Negative
Comments: Similar to 7-10 year US Treasury (IEF), the 20+ year US Treasury (TLT) traded within a tight range as well. Just sitting above the 33 and 60 week SMA, TLT could have found its support. A turn up in the RSI and MACD would confirm a move higher in these bond values and a turn south in bond yields.
Index (ETF): iShares Core US Aggregate Bond ETF (AGG)
Time Frame: Weekly Chart
Stock Price Above / Below:
- 33 Week Simple Moving Average: Above
- 60 Week Simple Moving Average: Above
- 200 Week Simple Moving Average: Below
RSI above 50: Yes, 52.41
MACD Positive | Neutral | Negative: Neutral
Comments: iShares Core US Aggregate Bond ETF (AGG), behaving the same as US Treasuries. Tight trading range this week, yet declining strength in RSI and MACD, AGG is above the 33 & 60 week SMA but still below the 200 week SMA. Short – term moves higher are possible, but long-term still downward.
Index (ETF): Developed Countries (EFA)
Time Frame: Weekly Chart
Stock Price Above / Below:
- 33 Week Simple Moving Average: Above
- 60 Week Simple Moving Average: Above
- 200 Week Simple Moving Average: Above
RSI above 50: Yes, 56.59
MACD Positive | Neutral | Negative: Neutral
Comments: EFA ETF closed at the top of the price action this week right at resistance at $82.21. RSI and MACD point towards weakness. Caution.
Index (ETF): Emerging Markets (EEM)
Time Frame: Weekly Chart
Stock Price Above / Below:
- 33 Week Simple Moving Average: Above
- 60 Week Simple Moving Average: Above
- 200 Week Simple Moving Average: Above
RSI above 50: Yes, 64.31
MACD Positive | Neutral | Negative: Positive
Comments: Emerging Markets closed the week down by 1.30%. EEM could be headed to support at $43.04. Keep in mind that EEM is up over the last three weeks and is due for a pull back to establish support.
Conclusion
My take on this past week and the coming week are the following:
- Equity’s are weakening. Due for a pull back.
- Bonds are finding support and could see a run hirer, resulting in lower yields / higher bond values.
- Emerging Markets are in a pull back cycle. The US dollar is up just shy of 2.50% in the last two weeks. If the dollar weakens, Emerging Markets will possibly move higher.
In these types of markets, focus on risk management is vital. Make sure to review or implement a proper risk management process. Every so often ask yourself this question…would you rather be right or make money?
Live Loud!
Trent
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