US equities violently mixed on Tuesday ahead of the Fed's monetary policy decision and Chair Powell's press conference.
Energy (+1.54%) and financials (+1.19%) outperformed the broader market indices, while technology (-2.20%) and consumer staples (-0.66%) underperformed.
Michael Oliver reconfirms what he’d been looking at the past few days . Specifically, justified the momentum signals he had seen prior to today’s rallies in both Gold and Silver.
According to CoinDesk, U.S. Senator Cynthia Lummis has proposed a new strategic reserve for Bitcoin, financed partly by revaluing the Federal Reserve's gold certificates. The draft legislation outlines a 'Bitcoin Purchase Program' that aims to acquire up to 200,000 BTC annually over a five-year period, totaling 1 million BTC.
There's also the revaluation of Federal Reserve banks' gold certificates to reflect their fair market value. Under the plan, within six months of enactment of the legislation, Federal Reserve banks would tender all of their oustanding gold certificates to the Treasury secretary. Within 90 days after that, the Treasury secretary would issue "new gold certificates to the Federal Reserve banks that reflect the fair market value price of the gold."
Food for Thought. One reason, the main reason for nations offshoring Gold has always been to protect it in case of regional warfare. Geographic diversification It is the main reason Europe stored much of its Gold in the US for decades post World War 2. Other various reasons exist; But the most likely is The Gold is being used as collateral for loaned currency by a friendly country.
The CTAs are slightly long Gold and ahve some dry powder to use. The rally we saw today was either shorts covering, (maybe banks this time), and/or macro-discretionary buying into the geopolitical news from Israel.
GoldFix’s Vince Lanci and Arcadia Economic’s Chris Marcus recently had a conversation with a LATAM mining executive discussing Silver’s supply-chain dynamics from a miner’s perspective. During that conversation unexpected but important corroboration was given regarding about China’s side of that supply-chain. The final result is a two-part post which pieces together the LATAM/China connection.
This is Fed Week, and as such there is much debate over the Fed’s potential for a rate cut. The financial press is throwing around phrases that we feel only muddy the waters. As this is an important season because of the BRICS summit and the US Election, we wanted to give you the real deal.
More at bottom
Market News:
"Microsoft reported growth in its main cloud-computing business that narrowly missed expectations, causing its stock to tumble during after-hours trading amid investor jitters over the outlook for the artificial-intelligence boom. Source: WSJ
"Starbucks has suffered a second straight quarterly drop in sales, underlining the pressures on a leadership team already contending with an activist shareholder and scrutiny from its charismatic former boss. Source: FT
"Merck reported second-quarter revenue and adjusted earnings that topped estimates as it saw strong sales from its blockbuster cancer drug Keytruda as well as other treatments in its oncology and vaccines portfolios and a new cardiovascular drug.Source: CNBC
"Intel plans to eliminate thousands of jobs to reduce costs and fund an ambitious effort to rebound from an earnings slump and market share losses." Source: Bloomberg
"The U.K.’s Competition and Markets Authority said it is investigating Google parent Alphabet’s partnership with artificial intelligence startup Anthropic. Source: CNBC
"US banking regulators are pursuing a plan that could limit investment managers’ sway over governance and strategy at American banks, in a move the industry called an “alarming” attempt to curb shareholder input. Source: FT
Politics/Geopolitics: Israel and Iran
Hamas stated that its political bureau chief Haniyeh was killed in Iran by an Israeli air strike on his house in Tehran, while a Hamas official said the assassination is a cowardly act that will not go unpunished, according to Al-Aqsa TV.
"Iran's Supreme Leader: Iran sees as a duty to avenge Haniyeh’s assassination", according to IRNA. Thereafter, Hezbollah MP Ammar says Israel "demands war, and we are up for it".
Sources involved in the Hamas-Israel hostage deal talks suggests "the killing of the Haniyeh will have an impact on the negotiations, since the Haniyeh was a significant figure in the negotiations", via Kann's Stein.
Some headlines via NewSquawk or DataTrek
Data on Deck: Two Fed Decisions
MONDAY, JULY 29 None scheduled
TUESDAY, JULY 30 10:00 am Consumer confidence July
WEDNESDAY, JULY 31 2:00 pm FOMC interest-rate decision
THURSDAY, AUG 1 PMI July ISM manufacturing July 48.8% 48.5%
FRIDAY, AUG. 2 8:30 am U.S. employment report July 190,000 206,000 8:30 am U.S. unemployment rate July 4.1% 4.1% 1
