As the gold and silver markets continue to weaken in early trading, today’s note from Art Cashin includes Jeff Gundlach’s bullish call on gold…
Today’s note from legend Art Cashin: On this day in 1654, Richard Thurlow was granted a Massachusetts charter for a toll bridge he had financed which spanned the Newbury River (near Rowley). The question of taxes or tolls was controversial even at that stage in America.
So, when the General Court of Mass. granted Thurlow his franchise, they agreed that the tolls should be based on commerce. After all, business was business. And in those days business clearly meant animals. Horses and oxen to pull wagons. Cattle for meat or milk. And sheep and chickens and hogs, etc., were there for meat.
Thus, people could cross for free. Horses, oxen and cows paid one shilling apiece. The lesser stock was charged 1/2 shilling per passage. The toll bridge only survived until 1680 when a competitor came up with a frequent mooing plan.
To celebrate join a few friends in some place that doesn’t look like a pig sty for a business drink and try not to burn your bridges behind you.
It wasn’t oxen and horses that seemed to symbolize Wall Street on Tuesday. Instead, like a hen hatching an egg, traders continued to sit on their gains of the last couple of weeks and moved with only minor changes.
As FOMC Convenes, Stocks Continue To Consolidate Near Rally Highs – Foreign markets generally showed minor gains as they reopened after the May Day holiday. Having no clear reason to do otherwise, U.S. stocks opted to follow suit.
The tech stocks managed to inch higher despite Advanced Micro Devices going into virtual freefall. The airline sector was firm, thanks in no small part to good news from Delta.
Stocks waffled a bit through the morning but by and large, the action was range bound. Traders felt no one wanted to make a big or risky move in front of a potentially volatile Apple report due after the close. I noted that in an email to some friends:
“FOMC Drift” (mild upward bias for market while FOMC is in session) may be helping mildly but the vigil of Apple earnings tonight is also a key factor.
Traders talk that Washington seems to become more dysfunctional every day.
Stocks remained range-bound through the afternoon.
In the closing minutes, the bulls got bailed out by over $600 million to buy on the bell. Yawn!
Don’t Count Your Chickens – My friend and fellow market veteran, Jim Brown, over at Option Investor, very cautiously notes that the recent budget compromise has not actually been voted by either House nor has it been signed by President Trump. Cross your fingers and watch the clock.
Will The Next Technological Breakthrough Come In The Old Technology And Will It Bring The Most Disruption Yet? – Technology has led to some dramatic and disruptive changes over the last decade and a half.
A little over ten years ago, in January 2007, when Steve Jobs stepped onto the stage at the MacWorld Conference in San Francisco none of us knew what was about to happen.
Steve wanted to induce us to carry a small, powerful computer in our pocket or purse. Since that was such an outlandish idea, Mr. Jobs was forced to disguise the computer as a telephone. He called it the iPhone.
He used the computer power to outdo everything done on the competing “flip-phones”. The pictures it took would be far sharper, crisper and clearer. (Kodak would file for bankruptcy in January in 2012.)
The computer power made the phone far more interactive, loaded with tons and tons of memory. It was a revolution and nothing has been the same since.
It allowed for apps like Uber, which has revolutionized the taxi and transportation business. Or Airbnb, which provides more rooms than Marriott could ever dream of.
There’s even more to come. Folks are said to be working on a fitness/medical app. It will analyze your breath and your perspiration, monitor your heart and your pressure and even read the iris of your eye. The hope is that it can provide an instant and accurate diagnosis in minutes.
But there may be even bigger things afoot. One of them could be a battery.
Many of our devices are currently powered by a version of the lithium-ion battery. But, it may have reached its potential limits. (Recall Samsung’s “fire” problems last year.)
We need a battery that stores more energy and can be recharged in a relatively short period of time. There are hundreds of companies racing to produce such a battery. (Wouldn’t you love to have a battery for your phone that lasted three days and recharged in six minutes.)
But, far more consequential than a phone battery would be a more highly efficient battery for automobiles.
Current electric vehicles (EVs) have a daily range of about 150 to 200 miles and need a couple of hours to recharge.
Suppose we could develop a battery that could range 400 to 500 miles and recharge in thirty minutes or less.
The effect might be dramatic and almost instantaneous. Every major car producer already has some form of electric drive train. They can already travel far if only they had the power.
What if suddenly 70% of cars were electric? What would happen to the price of crude oil?
Already the globe is producing more energy from renewables (primarily solar and wind) than it does from fossil fuels. What if we had an efficient battery to store the energy where it’s produced and then transport it to where it is consumed?
The next big breakthrough may be in battery technology – and, if it is, it may change our world dramatically. Stay tuned.
Not Quite “Sell In May” But A Call For A Somewhat Bumpy Summer – Bond Guru, Jeff Gundlach, at Doubleline Capital told interviewers that he anticipates that the yield on the ten year will move higher over the summer and that should “go along with a correction in the stock market”. He also expects the dollar to weaken a bit and gold to move somewhat higher. He did not seem to indicate that any of those moves might be major.
Overnight And Overseas – In Asia, Tokyo and Hong Kong are closed along with a few other markets (Buddha’s Birthday?). Shanghai and India were down slightly.
European markets are giving up most of yesterday’s gains. In other assets, crude bounced back to just under $48 on a surprisingly large drop in inventories in the API report. That makes today’s 10:30 IEA data even more important. The euro is down a touch as is gold.
Consensus – No surprise expected from the Fed, so consolidation may continue as we await payroll data. French debate late in our session may be a factor. Stick with the drill – stay wary, alert and very, very nimble.
***KWN has just released the powerful audio interview with Dr. Stephen Leeb and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: An Important Update On The War In The Gold & Silver Markets CLICK HERE.
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