Chuck Butler’s: A Pfennig For Your Thoughts 7/7/17 – It’s A Jobs Jamboree Friday!

  • Currencies continue to rebound…
  • G-20 begins today…
  • Former RBI Gov talks about Gold…
  • What will the BLS have for us today?

Good Day… And a Happy Friday to one and all! My infusion confusion isn’t that bad today, so I’ll carry on in normal fashion this morning… The summer heat has arrived! There are a few things that I like about the summer heat, but only 2 that I should talk about here… 1. It’s not cold!, and 2. the sun normally shines!  The Gin Blossoms greet me this morning with their song: Until I Fall Away…

It’s been a strange week with two Mondays and all, and in the currencies we had Monday and Tuesday with dollar strength, and then a recovery of the currencies the rest of the week. I told you that the “dollar day” wouldn’t last long, and it didn’t! You see, the sentiment has changed toward the dollar, and traders are no longer believing what the Fed is telling them, that the economy is ready to take off and inflation will rise…

So, the sentiment toward the dollar has or is being switched to the euro, and soon a new weak dollar trend will be in place. I say that with full conviction because if you’ve watched the dollar’s reaction to data prints, you can see it all there…  The dollar has failed to gain (except on Monday with the strong ISM report) most days when it should have because of data prints that aren’t weak, but when weak data does print, the dollar gets sold…

The currencies are being led to higher values by the Big Dog, euro, which has climbed back above the 1.14 level this morning. The little dogs (other currencies) are all ready to jump off the porch and join the Big Dog in a chase the dollar down the street game…

Today is a Jobs Jamboree for June…  I told you yesterday that the forecast for the report is 177,000 jobs created in June…  No great shakes, and no reason to write home about it! And the dollar will most likely get sold, because in 9 of the 10 last Jobs Jamboree Fridays the dollar has gotten sold, even when the jobs report was better than expected!

Maybe currency traders have gotten the memo from me that the BLS Jobs report is trumped up by hedonic adjustments to the survey, with the Birth/ Death Model the biggest and worst hedonic adjustment there is! And I’m the only analyst/ newsletter writer that talks about this stuff… They call me: Lone Wolf, HA! (actually they call me Looney Tunes! HA!)

For those of you new to class, I don’t care about the BLS jobs report any longer, because it’s not even close to being right. But there are things that I’ve always pointed out as more important parts of the Jobs Jamboree than how many jobs the BLS “created”… And that is the Average Hourly Earnings, the Avg. Hourly Work Weeks, and most important of all … The Labor Participation Rate…

The G-20 summit begins today in Europe…  This ought to be an even more interesting summit because President Trump is attending it! We’ll find out on Sunday when the communique’ is issued that tells us what G-20 ministers decided on… I have to say that more comes from the G-20 meetings than the G-7 meetings, so maybe we’ll see something about how to deal with N. Korea…

I’m afraid though that they will spend an inordinate amount of time attempting to get the U.S. to return to the Paris Climate Accord…  We’ve said we’re leaving, can’t they just leave it at that?

You know… I had a dream last night that I was a car’s muffler…  and I woke up exhausted! HAHHAHAHAHA!

OK, enough on G-20, let’s talk about Gold… The shiny metal saw a “nothing day” yesterday, with little volume and a price change of only $1.70 to the downside, and close at $1,225.00l. Gold is down another $2 in the early morning trading today, and I’m still scratching my balding head and trying to figure out how in the world Gold didn’t rally on Monday when the antics of N. Korea were confirmed!  And then all the saber rattling that’s going on since N. Korea successfully fired an ICBM..  Where’s the bid?

I saw a graph on Ed Steer’s letter this morning that showed the Gold demand from the Silk Road countries of: India, Turkey, Russia and China… and it’s quite impressive…  I tried to move the graph here, but it exploded my letter and I had to start all over again! UGH! So, I’m guessing it was “user error” and not software, so I’ll have to find out from the guy who created the site how to do that!

And the price of Oil slipped further in the past 24 hours… This would be very telling about the future of the price of Oil, should this slide continue before the price of Oil was able to rebound to $50… I’m worried about the financialization of Oil… All those junk bonds issued to finance the debts of the Shale Producers…

The U.S. Data Cupboard yesterday, had the Trade Deficit for May, and came in at $46.5 Billion deficit…  And get this… the ADP Employment Report only showed 158,000 jobs added in June…  The ADP report is supposed to be the appetizer for the Jobs Jamboree, so if that holds true, the Jobs report would show less than the forecast 177,000 jobs created in June…  Uh-Oh!  But fear not, for Dudley Do-Right is here! No wait! I mean the BLS is here to add jobs to their surveys out of thin air, so there will be no “bad employment report”, not on the BLS’s watch!

Today’s Data Cupboard is all about the Jobs Jamboree, but… not to worry.. next week’s Data Cupboard is stocked to the brim with data prints!

Before I head to the Big Finish today, I wanted to highlight this quote by the former Gov. of the Reserve Bank of India, Y.V. Reddy…  He comes out and states that Central Banks fear Gold…   Let’s listen in to his comments… “Gold has the characteristics of a currency, competing with the official currency as a form of savings or a store of value. It is a commodity by definition — but its links with the financial sector provoke central bank concerns.”

I’ve got something for you on this for next week folks… You’ll want to make sure you come back and read it, because it’s going to blow the doors off the naysayers regarding Gold manipulation…

For What It’s Worth…  I saw this on MarketWatch, and thought, why not highlight it in the FWIW section today? it’s about how even low-income families spend money on luxuries… It can be found here: http://www.marketwatch.com/story/low-income-families-spend-40-of-their-money-on-luxuries-2017-06-28?link=MW_popular

Or, here’s your snippet: “It turns out that all Americans, regardless of income, spend a large percentage of their income on what economists categorize as luxuries.

Even the lowest income families (the bottom 5th of earners) spend 40% on luxuries and 60% on necessities, according to the study’s author: Torsten Slok, chief international economist for Deutsche Bank Securities.”

Chuck again… Pretty interesting don’t you think?

Currencies today 7/7/12… American Style: A$ .7588, kiwi .7281, C$ .7743, euro 1.1415, sterling 1.2913, Swiss $ .9620, … European Style: rand 13.4360, krone 8.3860, SEK 8.4355, HUF 269.92, zloty 3.7097, koruna 22.8709, RUB 60.07, yen 113.67, sing 1.3818, HKD 7.8107, INR 64.67, China 6.8015, peso 18.22, BRL 3.2941 Dollar Index 95.92, Oil $44.30, 10-year 2.38%, Silver $15.83, Platinum $905.77, Palladium $838.50, and Gold… $1,221.10

That’s it for today…  A nice day game win for my beloved Cardinals yesterday… I was wishing I was there yesterday, instead of in the infusion center! Do we have another swimming prodigy in the family? Little Braden Charles sure has taken to the water and his dad (the swim coach) has him swimming in races, and he’s doing quite well! Way to go Braden! Of course that could all change tomorrow, when his interests change… I’m well aware of how this all works, with three kids having gone through it all before. Little Delaney Grace is in a community play’s rendition of Fiddler On The Roof, I’ll be there to watch her, I just love her to pieces!  OK… I don’t know how this worked out like it did, but we ended yesterday with a Johnny Rivers song, and look who’s taking us to the finish line again today… Johnny Rivers singing his song: Poor Side of Town…  And with that it’s time to get off the bus this week, and send you on your way to having a Fantastico Friday! Be Good To Yourself!

Chuck Butler

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