The consolidation in the gold market continues but look at this prediction. Also, the Dow is rolling over as trouble brews.
May 10 (King World News) – James Turk suggested a V bottom would take place in the gold market on December 4. Here is what Turk had to say along with a look at the gold chart at that time:
We can’t predict the future but trends & patterns often repeat. A “V” is a repeating pattern. Let’s see if gold rises as fast as it fell, taking gold to $2000 in Feb 2023 & then new record highs as it resumes its long-term uptrend. Silver too.
James Turk Suggested V bottom In Gold On December 4
This Is What The Chart Looked Like At The Time
James Turk today: Good progress in gold since sharing the chart above on 4 Dec 2022.
Turk Was Correct: Here Is The Updated Chart Showing The V Bottom In Gold
History did repeat, but which way now? Odds suggest a powerful upside breakout sometime this year. Still plenty of time to continue accumulating physical gold & physical silver…
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Dow Rolling Over
Art Cashin, Head of Floor Operations at UBS: This morning’s reaction to the CPI was positively celebratory, particularly in the bond area. The fact that arguably we are virtually below the Fed Funds rate, sparked a lot of excitement with yields plunging down and the Fed Fund futures predicting a rate cut in September. That sharp drop, obviously, brought short covering and regular buying into the high cap techs, which sent Nasdaq skyrocketing and the other indices followed behind them. Since then, the Dow has rolled over, and they need to begin to circle the wagons in the Dow.
We will be watching how the S&P follows through and again, should they go negative, we will be looking at the area between 4120 and 4100 and see where they go.
The overall feeling is that the bond future guys are calling the tune for the day. So, we will step back and watch how that develops.
The VIX is below 17 again, which is a concern to us old fogeys and as it may indicate growing complacency once again.
So, the game is back on the table. Keep your eyes on those yields. They are inching back up from the down spike in yields from the news.
That seems to be the general focus and so far, the debt ceiling is bringing a yawn and more people are finding ways they might extend “X-Day” a little further, perhaps June 15th when they will pick up lots of business taxes and even out to June 30th when they can postpone donations to retirement funds and the like. That appears to be a work in progress.
Anyway, keep your eye on the yields and stay safe.
Trouble Brewing In The Jobs Market
Peter Boockvar: ZipRecruiter ended up being a pretty good gauge of the slowing we’ve seen in job openings this year. If you remember back in January they warned about the slowing in listings they were seeing. In a delayed fashion in its reporting, we’ve seen US Job Openings from the BLS fall from 11.2mm in December 2022 to 9.59mm in March 2023. We’ve also seen 5 out of the last 6 months declines in temp jobs in the monthly payroll data. So what did Zip say last night in its Q1 shareholder letter and earnings call?
In their Q1 quarterly shareholder letter CEO Ian Siegel said “The macroeconomic environment is highly uncertain. Our prior guidance assumed that softness in demand observed in January created a lower starting point from which a more normal seasonal pattern would reassert itself. Contrary to that assumption, in Q2 ’23, we have seen demand for recruiting services continue to decline. Job postings have decreased across the majority of industries and across companies of all sizes. Both SMBs (small and medium sized businesses) and enterprises are spending less to make hires in spite of heading into what is historically the hiring season. This means we are no longer following the standard seasonal job market pattern ZipRecruiter has tracked over the company’s 13 yr history, excluding the Covid pandemic period.”
In the earnings call:
“On conversations with our customers, we see employers paring back their hiring in response to the uncertain economic backdrop we now face. Because of these trends which are unlike anything we’ve seen in our 13 years of doing business, we are not providing full year revenue guidance.”
And to harp on my continued point that I’ve heard many companies talk about particular softness in April, post SVB’s failure, ZIP said this, “While Q1 ’23 revenue was down 19% y/o/y, revenue in April was down 27% y/o/y. This is reflective of a contraction in demand with both SMBs and enterprises continuing to reduce the number of jobs they post and the amount they spent for job advertising.” To this point, Siegel said “there has been an acceleration of the deceleration in the demand for recruiting services.”
I’ll finish with these comments from Siegel, “This is very clearly a macroeconomic phenomenon. This downturn is affecting a multitude of players in our industry. And just last week we had an enterprise summit where I spoke to 30 of the largest hires in America. These are companies that hire between thousands and 10s of thousands of employees per year. Across the board, all of them have reduced their hiring plans in the face of the economic uncertainty their businesses face.”
Vegas continues to still be hot. The CEO of WYNN in their earnings call said “Despite the confluence of high inflation, high interest rates, bank failures, and increasingly difficult y/o/y comps, Wynn Las Vegas delivered an all time record in Q1…We also subsequently delivered the best April in the history of the property.” In Macau, amazingly on the non gaming side, “our retail business was incredibly strong, with tenant retail sales increasing 60% compared to Q1 of 2019.” Golden Week “was particularly strong, outperforming Golden Week 2019 in several key areas.” I remain positive on the Chinese consumer and the beneficiaries of their spending.
Mortgage apps bounced by 6.3% w/o/w with little change in the average 30 yr mortgage rate of 6.48%. Purchases were up 4.8% w/o/w after falling by 2% last week. They remain down 32% y/o/y. Refi’s (now could be cash out refi’s) jumped 10% w/o/w though are lower by 32% y/o/y. We know the pace of overall housing transactions is muted both because of the lack of inventory of existing homes and also price. Home builders are trying to fill the void with new product but that only works in certain markets where there is plenty of land to build on.
***To listen to James Turk discuss why the bank crisis is set to accelerate and how it will impact major markets including gold and silver CLICK HERE OR ON THE IMAGE BELOW.
***To listen to Alasdair Macleod discuss the accelerating bank crisis and how this will impact the gold and silver markets CLICK HERE OR ON THE IMAGE BELOW.
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