The Peter Schiff Show Podcast

Better Luck Next Fall

I just got back yesterday from the New Orleans Investment Conference, and I actually came to Connecticut for a few days; I really wanted to experience some of the fall foliage.  It's normally at its peak in the beginning of November. But, unfortunately we had a big storm here - a lot of rain, a lot of wind, and it knocked most of the leaves off of the trees.  So you know what they say about the best laid plans… hopefully I'll have better luck next fall.

Stock Market High on Trade Rumors

But as the leaves have been falling from the trees, stocks have been going the other direction.  Yesterday, all of the major stock market indexes hit new record highs. I think the catalyst, again, were rumors about a potential phase 1 trade deal. Of course, it really is ridiculous now.  What rallies the market is not the rumor of an actual trade deal but the rumors of a phony trade deal - a phase 1 deal which really isn't a deal at all. In fact, to the extent that anybody is even celebrating phase 1, what they really celebrating is that the trade war is over. That Donald Trump has basically surrendered without admitting that he has surrendered.  In fact a lot of the talk about what the Chinese even need to get the phase 1 deal is for all of the tariffs to be removed. Not just cancelling the future tariffs, but to take away all the tariffs that are already there, which, of course would be a relief for the American consumer, who, contrary to Donald Trump's claim, they're the ones who pay the tax - not the Chinese.

Buy the Rumor, Sell the Fact… Again?

But, basically, what the markets would really be celebrating, is if we went back to where we were before the trade war ever began. Of course, this is not a victory for the president if all the markets could hope for, is a return to the status quo, but again, once we get that deal - if we get that deal, it should be a "buy the rumor, sell the fact", especially since the fact is not going to live up to the height of the rumor.

Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

Better Luck Next Fall

I just got back yesterday from the New Orleans Investment Conference, and I actually came to Connecticut for a few days; I really wanted to experience some of the fall foliage.  It's normally at its peak in the beginning of November. But, unfortunately we had a big storm here - a lot of rain, a lot of wind, and it knocked most of the leaves off of the trees.  So you know what they say about the best laid plans… hopefully I'll have better luck next fall.

Stock Market High on Trade Rumors

But as the leaves have been falling from the trees, stocks have been going the other direction.  Yesterday, all of the major stock market indexes hit new record highs. I think the catalyst, again, were rumors about a potential phase 1 trade deal. Of course, it really is ridiculous now.  What rallies the market is not the rumor of an actual trade deal but the rumors of a phony trade deal - a phase 1 deal which really isn't a deal at all. In fact, to the extent that anybody is even celebrating phase 1, what they really celebrating is that the trade war is over. That Donald Trump has basically surrendered without admitting that he has surrendered.  In fact a lot of the talk about what the Chinese even need to get the phase 1 deal is for all of the tariffs to be removed. Not just cancelling the future tariffs, but to take away all the tariffs that are already there, which, of course would be a relief for the American consumer, who, contrary to Donald Trump's claim, they're the ones who pay the tax - not the Chinese.

Buy the Rumor, Sell the Fact… Again?

But, basically, what the markets would really be celebrating, is if we went back to where we were before the trade war ever began. Of course, this is not a victory for the president if all the markets could hope for, is a return to the status quo, but again, once we get that deal - if we get that deal, it should be a "buy the rumor, sell the fact", especially since the fact is not going to live up to the height of the rumor.

New Highs in the Headlines

We had record high closes today in the S&P 500, the NASDAQ composite; the Dow Jones not quite a new record but still up better than 300 points: 301.13 to be precise. Of course, all of the headlines, and President Trump - they're going to be claiming that the reason that we had these surging stock prices is because we had a stronger than expected jobs report.  We got the October nonfarm payroll that came out this morning and it was better than was expected. You had Larry Kudlow out there talking about how this is a fantastic jobs report.  It basically shows how we have this great economy; the greatest economy in the history of America, and that's the reason that the stock market is making record highs, because we have this great economy.

Economic Data was a Mixed Bag

Well, first of all, the jobs report is really not that great.  Sure, it was stronger than expected, but that's not why the stock market went up today. We had other economic data that came out that was weaker than expected, so it was an overall mixed bag. In fact, the Atlanta Fed came out today and downwardly revised their forecast for Q4 GDP from 1.5% down to 1.1%, and I think the New York Fed is actually below 1% in its forecast for fourth quarter GDP. So hardly the strongest economy in history, yet the markets and President Trump are certainly celebrating like the economy is strong.

Nonfarm Payroll up from an Upwardly Revised Previous Month

But let me get to the tale of the tape first in the jobs report, because we were looking for a weak number. So the bar was pretty low. The consensus was for 90,000 nonfarm payroll jobs, and one of the reasons was because of the striking GM workers, so they were going to be subtracted from the numbers.  So that was already baked into the cake. We ended up getting 128,000 jobs, so nicely above those diminished expectations.  But probably more significantly, they went back and upwardly revised the number they told us for the prior month, which was originally reported at +136,000.  Now the government claims it was +180,000.

Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

New Highs in the Headlines

We had record high closes today in the S&P 500, the NASDAQ composite; the Dow Jones not quite a new record but still up better than 300 points: 301.13 to be precise. Of course, all of the headlines, and President Trump - they're going to be claiming that the reason that we had these surging stock prices is because we had a stronger than expected jobs report.  We got the October nonfarm payroll that came out this morning and it was better than was expected. You had Larry Kudlow out there talking about how this is a fantastic jobs report.  It basically shows how we have this great economy; the greatest economy in the history of America, and that's the reason that the stock market is making record highs, because we have this great economy.

Economic Data was a Mixed Bag

Well, first of all, the jobs report is really not that great.  Sure, it was stronger than expected, but that's not why the stock market went up today. We had other economic data that came out that was weaker than expected, so it was an overall mixed bag. In fact, the Atlanta Fed came out today and downwardly revised their forecast for Q4 GDP from 1.5% down to 1.1%, and I think the New York Fed is actually below 1% in its forecast for fourth quarter GDP. So hardly the strongest economy in history, yet the markets and President Trump are certainly celebrating like the economy is strong.

Nonfarm Payroll up from an Upwardly Revised Previous Month

But let me get to the tale of the tape first in the jobs report, because we were looking for a weak number. So the bar was pretty low. The consensus was for 90,000 nonfarm payroll jobs, and one of the reasons was because of the striking GM workers, so they were going to be subtracted from the numbers.  So that was already baked into the cake. We ended up getting 128,000 jobs, so nicely above those diminished expectations.  But probably more significantly, they went back and upwardly revised the number they told us for the prior month, which was originally reported at +136,000.  Now the government claims it was +180,000.

The Fed Slashes Interest Rates for 3rd Time

As expected, the Federal Reserve cut interest rates today.  This is the third rate cut of this cycle.  We're now down to 1.5%. But of course, what everybody has to remember is a year ago, when the Fed was hiking interest rates, the forecast from the Fed was that they were going to continue to hike rates.  They were supposed to have another 3 or 4 rate hikes in 2019.  And, of course, a year ago, as the Fed was hiking rates, they were still shrinking their balance sheet and they were going to continue to shrink it. They were talking about auto-pilot. They were going to continue to do $50 billion/month of quantitative tightening.  And they said this with a straight face.  And everybody believed them.

Not a Surprise to Me

Of course, everybody except me and maybe a few other people out there in the financial media. But I was telling anybody who would listen - which was not that many people in the mainstream, but certainly the people who listen to my podcasts, that none of this was going to happen. I said that the Fed was going to have to stop hiking rates, and that they would be cutting rates in 2019, and that not only were they going to stop quantitative tightening, that they were going to have to go back to quantitative easing. And that's exactly where we are.

A Distinction without a Difference

Although, Jerome Powell went out of his way - I think the first thing that he said when he made his prepared remarks - was to reassure everybody that what the Fed was doing now, with its repo program was not quantitative easing. He drew a distinction between what the Fed was doing when it was doing QE and what it is doing now when it is not doing QE.  The main distinction had to do with the maturities of the debt that the Fed was buying.  He said that when they were doing QE, they were buying longer term government bonds, but that now, they're buying shorter term government bonds and so therefore it's not QE. But this is really a distinction without a difference.

 

 

 

 

 

Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

The Fed Slashes Interest Rates for 3rd Time

As expected, the Federal Reserve cut interest rates today.  This is the third rate cut of this cycle.  We're now down to 1.5%. But of course, what everybody has to remember is a year ago, when the Fed was hiking interest rates, the forecast from the Fed was that they were going to continue to hike rates.  They were supposed to have another 3 or 4 rate hikes in 2019.  And, of course, a year ago, as the Fed was hiking rates, they were still shrinking their balance sheet and they were going to continue to shrink it. They were talking about auto-pilot. They were going to continue to do $50 billion/month of quantitative tightening.  And they said this with a straight face.  And everybody believed them.

Not a Surprise to Me

Of course, everybody except me and maybe a few other people out there in the financial media. But I was telling anybody who would listen - which was not that many people in the mainstream, but certainly the people who listen to my podcasts, that none of this was going to happen. I said that the Fed was going to have to stop hiking rates, and that they would be cutting rates in 2019, and that not only were they going to stop quantitative tightening, that they were going to have to go back to quantitative easing. And that's exactly where we are.

A Distinction without a Difference

Although, Jerome Powell went out of his way - I think the first thing that he said when he made his prepared remarks - was to reassure everybody that what the Fed was doing now, with its repo program was not quantitative easing. He drew a distinction between what the Fed was doing when it was doing QE and what it is doing now when it is not doing QE.  The main distinction had to do with the maturities of the debt that the Fed was buying.  He said that when they were doing QE, they were buying longer term government bonds, but that now, they're buying shorter term government bonds and so therefore it's not QE. But this is really a distinction without a difference.

 

 

 

 

 

I am Back!

I am back! I know a lot of people have been upset that I haven't been able to do a podcast in almost 2 weeks. The reason I've been absent… I just haven't been feeling well.  I've been coughing a lot and and haven't been up for doing a podcast - I'm doing one today, though.  I'm still a little bit sick… but I figure it's been long enough, so I have to talk a little bit about what's on my mind.

Dollar Index Trending Lower

First of all, there hasn't been that much activity, I guess, in the markets over this time period. The U.S. dollar has generally been weaker.  It has been trending down.  It hasn't really broken down yet, but it is going lower.  In fact, the dollar index closed today near 97.69. so that is lower than it had been.  Remember, a few weeks ago, the dollar index was above 99. So the dollar is trending lower.

Interest Rates Up - Bond Prices Down

Interest rates are actually moving higher.  Bond prices are going down.  The yield on the 30-year U.S. Treasury now is at 2.26, and I think this is significant because it really shows the problems that are building in the economy because the dollar is weakening and interest rates are rising. That is going to mean higher consumer prices, it's going to mean higher borrowing costs; now of course, the Federal Reserve is doing everything it can to artificially suppress interest rates. One of the stories that I've read several times over the last couple of weeks is how the Federal Reserve is having to do more repurchase agreements; having to increase the size of the amount of Treasuries they're buying in the market. I didn't see that in today's balance sheet numbers; the balance sheet was up only about 2 billion over the prior week.  But I have a feeling that the number is going to be much, much higher than that when we get it a week from today.

 

 

 

 

Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

I am Back!

I am back! I know a lot of people have been upset that I haven't been able to do a podcast in almost 2 weeks. The reason I've been absent… I just haven't been feeling well.  I've been coughing a lot and and haven't been up for doing a podcast - I'm doing one today, though.  I'm still a little bit sick… but I figure it's been long enough, so I have to talk a little bit about what's on my mind.

Dollar Index Trending Lower

First of all, there hasn't been that much activity, I guess, in the markets over this time period. The U.S. dollar has generally been weaker.  It has been trending down.  It hasn't really broken down yet, but it is going lower.  In fact, the dollar index closed today near 97.69. so that is lower than it had been.  Remember, a few weeks ago, the dollar index was above 99. So the dollar is trending lower.

Interest Rates Up - Bond Prices Down

Interest rates are actually moving higher.  Bond prices are going down.  The yield on the 30-year U.S. Treasury now is at 2.26, and I think this is significant because it really shows the problems that are building in the economy because the dollar is weakening and interest rates are rising. That is going to mean higher consumer prices, it's going to mean higher borrowing costs; now of course, the Federal Reserve is doing everything it can to artificially suppress interest rates. One of the stories that I've read several times over the last couple of weeks is how the Federal Reserve is having to do more repurchase agreements; having to increase the size of the amount of Treasuries they're buying in the market. I didn't see that in today's balance sheet numbers; the balance sheet was up only about 2 billion over the prior week.  But I have a feeling that the number is going to be much, much higher than that when we get it a week from today.

 

 

 

 

Don’t miss my upcoming appearances:

The Dallas Money Show October 13-14

and the New Orleans Investment Conference, Nov. 1-4

Dow jumps 300 points

U.S. stocks finished out the week on a strong note; in fact we broke a 3-week losing streak. This was the first time in 4 weeks that the major averages finished higher on the week. When I recorded my podcast earlier in the week, the week was off to a rough start. But we had a turnaround.  In fact, today the Dow Jones was up 319 points on the day - about a 1.2% gain. The NASDAQ was up even more; 106 points, that's 1.34%.  The Russell 2000, even better, up 1.8%.  The Dow Transports were the stars of the day.  They were up 2.23% - 224 points.  Look at stocks like Apple, rising almost 3% to a new all-time record high.

Rumors and News Driving the Market

There was a lot of news driving the market today. Initially, we got rumors of some type of Brexit deal that potentially was imminent. Of course, there have been all sorts of rumors that have never panned out regarding a Brexit deal. But this morning, there was a rumor that really was causing a lot of buying in the European markets and that spilled over into the U.S. futures, which helped the U.S. market.  And of course there was a lot of brewing optimism over some kind of impending trade deal with China, although that news didn't come out until very close to the close.

U.S. Consumer Sentiment Climbs to 3-Month High in October

But, earlier in the day, we got the Consumer Sentiment number for October, and the markets are already higher by the time we got this release, which comes out at 10am; the market opens at 9:30. The prior month was 93.2, and the consensus was for a slight drop in consumer sentiment to 92.  After all, there are a lot of reasons for consumers to be less optimistic now than they were back then. But the consumer… surprise - ended up being more optimistic. The number came out at 96 and that sent the price of stocks much higher.

Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
* Check out Plaud AI and use my code GOLD for a great deal: https://www.plaud.ai


Privacy & Opt-Out: https://redcircle.com/privacy

Don’t miss my upcoming appearances:

The Dallas Money Show October 13-14

and the New Orleans Investment Conference, Nov. 1-4

Dow jumps 300 points

U.S. stocks finished out the week on a strong note; in fact we broke a 3-week losing streak. This was the first time in 4 weeks that the major averages finished higher on the week. When I recorded my podcast earlier in the week, the week was off to a rough start. But we had a turnaround.  In fact, today the Dow Jones was up 319 points on the day - about a 1.2% gain. The NASDAQ was up even more; 106 points, that's 1.34%.  The Russell 2000, even better, up 1.8%.  The Dow Transports were the stars of the day.  They were up 2.23% - 224 points.  Look at stocks like Apple, rising almost 3% to a new all-time record high.

Rumors and News Driving the Market

There was a lot of news driving the market today. Initially, we got rumors of some type of Brexit deal that potentially was imminent. Of course, there have been all sorts of rumors that have never panned out regarding a Brexit deal. But this morning, there was a rumor that really was causing a lot of buying in the European markets and that spilled over into the U.S. futures, which helped the U.S. market.  And of course there was a lot of brewing optimism over some kind of impending trade deal with China, although that news didn't come out until very close to the close.

U.S. Consumer Sentiment Climbs to 3-Month High in October

But, earlier in the day, we got the Consumer Sentiment number for October, and the markets are already higher by the time we got this release, which comes out at 10am; the market opens at 9:30. The prior month was 93.2, and the consensus was for a slight drop in consumer sentiment to 92.  After all, there are a lot of reasons for consumers to be less optimistic now than they were back then. But the consumer… surprise - ended up being more optimistic. The number came out at 96 and that sent the price of stocks much higher.