Gold has traded between $1,304 and $1,331 so far today on “Jobs Friday” as August non-farm payrolls came in 30,000 below the consensus estimate…as of 9:45 am Pacific, bullion is up $8 an ounce at $1,322…Silver, which could be starting a BIG-TIME move, has jumped 43 cents to $19.28…Copper is unchanged at $2.09…Crude Oil has surged $1.28 a barrel to $44.44 while the U.S. Dollar Index has added (why?) one-fifth of a point to 95.85…
Holdings of SPDR Gold Trust fell for a 3rd straight session yesterday, dipping 0.57% to 937.89 tonnes…
Asian physical Gold demand improved slightly this week as a correction in prices prompted consumers to buy for the upcoming festival and wedding season, with discounts in India narrowing to their smallest in 3 months…
Will the Fed keep “crying wolf” even after this morning’s jobs report missed the mark? – very likely, but that’s only going to further erode its credibility…
It was another August “miss” on initial U.S. jobs numbers – the 10th time in the past 13 years the month has whiffed on market expectations…non-farm payrolls increased just 151,000 for the month, extending the futility August has experienced over the years…Wall Street economists were expecting the payrolls report to show a gain of 180,000 in August, with the unemployment rate ticking down one-tenth to 4.8%…those who were anticipating a Fed rate hike this month, just the 2nd in a decade, what were they smoking?…
Behind The Headline Number
Notably, the biggest jobs gains came in bars and restaurants, which added 34,000 positions…social assistance grew by 22,000, professional and business services added 22,000 and Wall Street-related positions grew by 15,000…health care also contributed 14,000…does this look like a thriving private sector economy?…
The official unemployment rate remained unchanged at 4.9%…a more encompassing rate that included discouraged workers and those holding part-time jobs for economic reasons held steady at 9.7%…those counted as not in the labor force increased by 58,000 to a staggering 94.4 million…the labor force participation rate remained unchanged at 62.8%, near 40-year lows…
What else?…wage growth actually took a step back last month with hourly earnings up just 3 cents at an annualized pace of 2.4%…the average work week declined 0.1% to 34.3 hours…
In the coming weeks you’ll hear Hillary Clinton talk profusely about how her “infrastructure” plans are going to create jobs and boost the economy – is that the only idea liberals have across the world, from the EU to Japan to the U.S. and Canada, to spur economic growth?…how about lower taxes and real tax reform, less regulation, smaller government, smarter trade deals and other much-needed structural reforms?…
Oh, That Curly Hair And Those Tight Muscles!
It seems that sensible fiscal and foreign policies don’t matter as much these days as “image” when it comes to professional politicians (that’s why many economies around the world are under-performing)…
On Canadian Prime Minister Trudeau, an observation during his China visit from the Chongquing Morning Post in a blog post:
“He has curly hair, deep eyes, a handsome face and tight muscles. Today we introduce everyone to a Hollywood star – oops, that’s not right – the Prime Minister of Canada!”
In Today’s Morning Musings…
1. Venture starts September with a bang…
2. Drilling at two past producing mines – watch these ones closely!…
3. Daniel’s Den – the Rockefellers of Venezuela and Harvest Natural Resources (HNR, NYSE)…
Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…
Gold has traded between $1,302 and $1,316 so far today…as of 10:15 am Pacific, bullion has reversed from lower levels and is up $5 an ounce at $1,314…Silver has added 23 cents to $18.84…Copper is flat at $2.09…Crude Oil has slipped another $1.28 a barrel to $43.42 while the U.S. Dollar Index has retreated one-third of a point to 95.67…
Holdings of SPDR Gold Trust posted the first monthly dip in August in 4 months…however, the fall was very modest at only 1.6%…
Barrick Gold’s (ABX, TSX) credit outlook has been raised by S&P Global Ratings as the world’s biggest bullion producer’s balance sheet benefits from higher metal prices, asset sales and lower costs…Barrick’s outlook was lifted to positive from stable, S&P wrote in a statement yesterday, affirming the miner’s BBB- rating…shares in Barrick have more than doubled in value this year (despite a 20% slide in August) after 5 straight annual declines, and its bonds have gained more than 30%…
More Fedspeak
Chicago Fed President Charles Evans said yesterday he’s increasingly convinced that U.S. economic growth had slowed permanently, a situation that will keep U.S. interest rates low for a long time ahead…embracing Harvard Professor Larry Summers’ so-called secular stagnation theory, Evans argued that an aging U.S. population and slowing productivity growth mean there is little reason for interest rates to rise either fast or far…expectations of low growth have become so embedded in corporate and investing behavior, he said, that even if inflation rises unexpectedly and the Fed has to raise rates faster than it now anticipates, a detrimental spike in long-term interest rates is unlikely…
U.S. Manufacturing Sector Contracts In August
The manufacturing sector saw activity contract in August (49.4 was the reading, a few points below expectations) after 5 consecutive months of modest expansion, the Institute for Supply Management said this morning…some in the mainstream media actually expressed their “shock” at this morning’s number – why should they be “shocked” unless their only source of information is the Fed, the Obama administration or Crooked Hillary?…
Oops, We Erred Again!
Another big revision this morning from the U.S. Labor Department – labor costs grew much faster than initially thought in the 2nd quarter while worker productivity slumped, which could pressure corporate profits and business spending…
Looking Ahead To Tomorrow’s Jobs Report – A Surprise Coming?
An upbeat payrolls report tomorrow would reinforce the narrative that a U.S. interest rate hike is likely before the end of the year, but history shows there’s a good chance the number will fall short of the consensus estimate of 180,000, in line with this year’s monthly average of 186,000…
August has been an anomaly in recent years…the average initially reported August non-farm payrolls number going back to 2011 is just 87,700…moreover, the typical August report over the past 5 years has missed market expectations by 52,000, according to Deutsche Bank U.S. chief economist Joseph LaVorgna…and if that’s not enough, 9 of the last 12 Augusts have missed expectations, with an average downside surprise of 46,000…
August is tied as the worst month of the year for job creation during the post-recession recovery and is also the noisiest in terms of how much the initial number differs from the final revision 2 months later…
It would therefore be highly unusual if tomorrow’s number were to surprise to the upside…but in this U.S. election year, we’ve seen that anything is possible!…
Oil Update
U.S. Crude stocks rose much more than expected yesterday – by 2.3 million barrels to 525.9 million barrels in the week to August 26 – but rising U.S. storage must be considered alongside a sharp decline in so-called “spare capacity” elsewhere in the world, especially Saudi Arabia…the International Energy Agency estimates that OPEC’s spare capacity has fallen by 1.4 million barrels per day over the past few years, down to a total of 1.9 million barrels per day…Saudi Arabia makes up the vast majority of that spare capacity at 1.6 million barrels, but those stockpiles are trending lower as the country continues to pump at record levels in a bid to maintain market share over competitors…that decline in spare capacity is an important caveat in the outlook for Oil prices…
U.S. Election Race Tightens – Gold Bullish
The race for the White House is likely going to be much closer than most pundits have been assuming…a new Fox News poll released last night finds Donald Trump gaining ground in the head-to-head matchup, despite improvements from Hillary Clinton on top issues, and the race is particularly tight when all 4 Presidential candidates are included…the poll finds Clinton garners 41% to Trump’s 39%, while Libertarian Gary Johnson receives 9% and Green Party candidate Jill Stein gets 4%…
Trump may have gained additional momentum yesterday with his visit to Mexico followed by a fiery speech on immigration last night in Arizona…
In Today’s Morning Musings…
1. Zealous for Zeolite!…
2. The emerging Cobalt opportunity…
3. Another Silver surge on the way?…
Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…
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