There were three primary economic releases this week:
- New Home Sales Price: -38k [-8.91%] m/m, Home Supply 7.9 [-0.8 m/m]. Bearish.
- Personal Income: +0.6% m/m [prior 0.3%, expected 1.0%], PCE +1.8% m/m, expected +1.2%.
- PMI Flash: Manufacturing +47.8, Services +50.5. Better than expected (rating of 50 = flat).
Home prices appear to have peaked, and are now falling, as is the supply of new homes. Personal Consumption Expenditures (spending) shot higher (annualized rate: 21.6%!!), while Personal Income grew about a third as fast. The PMI (manufacturing) suggests a slowdown, but the PMI (services) moved sideways – i.e. it didn’t decline.
Another market-moving event this week was the FOMC minutes release on Wednesday, where it was revealed (not-so-shockingly) that participants thought the labor market remained tight and that more rate increases were probably going to be required. (Source – Pfizer/Reuters): “…while there were signs that the cumulative effect of the Committee’s tightening of the stance of monetary policy had begun to moderate inflationary pressures, inflation remained well above the Committee’s longer-run goal of 2% and the labor market remained very tight.” This showed up – to some degree – in rates, wich edged higher, mostly in the 6 month/1 year/10 year durations.
The buck moved up 4 days out of 4 this week, ending up 1.38 [+1.33%] to 105.16. The buck’s uptrend continues to strengthen. In spite of insane spending, the dollar is not turning into confetti, nor is the much-talked-about BRICS currency taking over. Perhaps we are still in the “nicest horse in the glue factory” place.
Gold moved lower on the week, falling 33.10 [-1.79%] to 1817.10. Most of this drop was driven by the dollar rally; gold/Euros fell just 0.57%. Most of gold’s decline happened on Thursday and Friday. Gold remains in a moderate downtrend.
Silver did worse than gold, losing 0.82 [-3.80%] to 20.89, marking a new 3-month low. Most of silver’s losses came on Thursday and especially Friday. Silver ended the week below the 200 MA, which is a bearish sign. So much for my “new model” that suggested good things were in the offing. Work-in-progress, as I said. Friday was “contract-roll” day (volume switched from the March contract to the May contract) – I think the upcoming delivery deadline may be encouraging the banksters to push prices lower, to dissuade the little people from getting the 1000 oz silver bars delivered to them for each SI-mini contract they own.
by sand_puppy