U.S. Prints A Negative Factory Orders, And The Dollar Rallies?

A Pfennig For Your Thoughts

November 5, 2019

* Currencies couldn’t add to their Friday gains on Monday
* Christine Lagarde steps into the bucket…

Good Day… And a Tom Terrific Tuesday to you! No baseball! What’s baseball rat like me to do? Well, I continued reading the two books I’m into right now, and I watched a little TV, but there wasn’t much on… The raw, steel gray, barren days of November have started… My longtime friend, and former colleague, Ty Keough, stopped by to see me last Friday… It was great to catch up with him, who’s now retired like me! Ty mentioned the sunny day on the 1st of November, and I said, “that won’t last!” And it didn’t! The late, great, (greatest guitar player in my mind) Alvin Lee greets me this morning with a live version of his song: Goin’ Home… When I played in the last band I played with, we ended every gig with that song…

Well… The currencies couldn’t add to their Friday gains yesterday, instead, giving back some of their Friday gains… And that frustrates me, as a currency holder, because there has to be something in the shadows at work here… The U.S. Data Cupboard printed a negative report, and yet the dollar bugs were able to gain back some lost ground… What gives with that? Oh well, nothing and I mean nothing actually surprises me any longer, not in this day of all markets being manipulated in some manner…

So, be it as it may… The currencies start today with a new challenge, which is to add to their Friday gains, in a meaningful way! I know this sounds like I’m rooting against the dollar, but in reality I’m not, I’m just seeing things the way they should be given the fundamentals, and when things go the way I see them, that’s good, and when they don’t, I don’t like to talk about it! HA!

The official wording on the dollar rebound yesterday was something like: “dollar rebounds as investors book profits on short sales”… Really? That’s what the media found to be the reason for the dollar rally yesterday? Where have all the real financial journalists gone, long time passing… I’m just saying…

Gold saw selling yesterday, that caused the shiny metal to lose $4 on the day, which was bad enough, but this morning it’s down another $8, all on the thought that the U.S. and China WILL get somewhere with a Trade Agreement… I find this reason to just be an excuse for the price manipulators to rationalize their moves…

I was caught off guard by an article On CNBC, yesterday that quoted the Gov. of the Central Bank of Hungary saying that, “The euro is a ‘trap’ and countries should be allowed to ditch it.” I found this article interesting in that it was just 15 years ago, that Hungary was lining up their ducks in a row to join the euro… I guess they’re glad they didn’t meet the criteria back then or since, right? So, I guess I can’t call Hungary, a “Eurowannabe” any longer… For they sure don’t sound like they would touch the euro with your ten foot pole!

And in European Central Bank’s (ECB) President, Christine Lagarde’s first speech since taking over the reins from Mario Draghi, she didn’t come out with any euro saving comments, and instead, decided to tick off the Germans and Hollanders… She chastised them for not using their budget surpluses for things like infrastructure, and stuff like that… That’s no way to get to know your largest economic state, now is it Christine?

Nothing like stepping in the bucket while a pitch is coming toward the plate, eh?

After hearing the Chinese say they didn’t think a Trade deal with the U.S. would ever take place, they met again with U.S. negotiators, and talked about a pact that could be worked out… I’m from Missouri, so they’re going to have to show that to me! Pessimistic? Well, I told you right from the get-go that the so-called “Tentative Agreement” announced a few weeks ago, wasn’t for real… Hey! That’s my job, to point out these things so that investors don’t get hung out to dry by them! If investors choose not to listen, well… you know…

We will see 3 different Fed Heads out speaking today… One of them is Dallas Fed President Robert Kaplan, and another one is Neel Kashkari, Minneapolis Fed President… Both will speak from the same songsheet, I presume… And that is that the Fed is on Hold, and that’s that! The third speaker is Tom Barkin, President of the Richmond Fed. He’s too knew to the Fed Head scene, having been appointed this year, so I have no idea what he will be talking about, but if I were a betting man, I would say he too will sing from the same songsheet, as Kaplan and Kashari…

Well, looky there! The U.S. Data Cupboard yesterday had the September Factory Orders data for us, and it printed, for a second consecutive month, at a negative! Negative -0.6% in Sept. following August’s -0.1%… That’s going in the wrong direction folks! And what did the currencies do? Well, I guess I already told you… They lost ground on the day… Why?, would be the better question? And for the answer to that, you might as well, get on the horn and call the PPT… The Plunge Protection Team… I’m just saying…

The U.S. Data Cupboard has the September Trade Deficit for us today… This is where you can really see that the Trade War has failed miserably… For there has been no improvement in this data.

We’ll have to wait until tomorrow before we see any real economic data from the Eurozone, as Retail Sales, and more will print tomorrow.

To recap… The U.S. printed a negative Factory Orders report and the dollar rallied… that’s right, I’m not kidding you! Sept Factory Orders were negative -0.6%, which was the second consecutive month with a negative print here… But the currencies couldn’t add to their gains from Friday, and instead lost ground… Gold lost $4 yesterday, and is down $8 this morning…

For What It’s Worth… One of my best articles, if I say so myself, for the now defunct Dow Theory Letters, was one I wrote on the threat of a cashless society… I wrote that one on 6/14/18… Well, this article is a upon further review with Sweden, the poster child, for cashless societies, and touches on what’s going on here in the U.S. with regards to eliminating cash… And it can be found here: https://www.latimes.com/business/story/2019-10-27/cash-is-more-popular-than-ever

Or, here’s your snippet: “Modern finance requires a lot of trust, and its digital future will demand still more. If, for example, electronic payments are to replace cash, people must be willing to believe that the bits of data traveling among phones, cards, terminals and blockchains actually represent something of value.

So, will people believe? Judging from their growing predilection for physical currency, maybe not.

At first glance, cash would appear to be on its way out.

Sweden has almost eliminated its use for payments. In America, home of the almighty dollar, almost a third of the population gets through a typical week without using a single banknote.

Businesses are experimenting with going cashless, hoping to speed up transactions, combat theft and create a safer environment for their employees.

Actually, though, physical currency is experiencing a resurgence.
People in many of the world’s most advanced nations — including the United States, the euro area and Japan — are holding more of it than ever.

In the U.S., for example, currency in circulation stood at an estimated $1.76 trillion as of late September, according to the Federal Reserve. That’s about 8.2% of gross domestic product, up from just 5.6% before the 2008 financial crisis and close to the highest level in at least 36 years.

If people need less cash to pay for stuff, why do they want to hold so much of it? The answer, it seems, is that they’re turning to currency as a store of value.

Chuck again… Can you believe that Swedes actually get a chip implanted in their hands so that they can pay at a register with a wave of their hand? Never mind that the Gov’t now knows what you spend you money on, and pay to whom, and everything else about you, as you give away your civil liberties… but, as long as it appears to be being delayed, I guess I shouldn’t complain…

Currencies today 11/5/19 American Style: A$.6915, kiwi .6416, C$ .7615, euro 1.1109, sterling 1.2906, Swiss $1.0082, European Style: rand 14.7255, krone 9.1426, SEK 9.6241, forint 296.80, zloty 3.8430, koruna 22.9780, RUB 63.34, yen 108.86, sing 1.3572, HKD 7.8341, INR 70.45, China 7.0248, peso 19.14, BRL 3.9944, Dollar Index 97.61, Oil $56.89, 10-year 1.82%, Silver $17.99, Platinum $934.65, Palladium $1,784.23, and Gold… $1,501.48

That’s it for today… Another day, another different treatment for my leg wound… The wound doctor is baffled as to why he can’t get this thing to heal… And once again, I remind him that I’m taking a chemo medicine daily….. hint… hint… So, maybe this new treatment will open up a window that allows me to get out of here and go south for a couple of weeks to get away from the dreariness of November in the Midwest… One never really knows, as each week they seem to have a different plan, and I go this Friday, to see them… The plane leaves Saturday, I guess I’ll find out Friday if I’ll be on the plane, or not! Our Blues get back on the ice tonight, this time in Vancouver… Have I ever told you that Vancouver in July is one of my fave cities? The Moody Blues take us to the finish line today with their song: I’m Just A Singer (In A Rock And Roll Band) I hope you have a Tom Terrific Tuesday, and will Be Good To Yourself!

Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts