Daily Market Report

Friday, September 1, 2017

A less than expected August jobs report released this morning rallied spot gold nine dollars. Revisions to the June and July unemployment numbers (now down 40,000 jobs) also had an effect.

Yesterday, ADP released their Private Sector jobs report for August and the private payrolls increased by 237,000. Good news for the Equity market as they were only expecting an increase of 185,000.

After yesterday’s strong ADP figure, the street was expecting today’s job report to be stronger than the economists’ estimate of 180,000. When the number came in less than expected at 156,000, the yields on the Ten Year treasuries immediately came down to a yield of 2.0991 percent and the dollar sold off.

Within five minutes of the news hitting the wires we saw treasuries reverse their decline back to the 2.13 percent level and the price of gold retreated from its highs.

I find it fascinating how fast the market reacts to the news. No doubt Algorithm programs were activated at 8:30 as we saw big moves in Gold and Bonds right after the number.

At the time of this report, the Gold market and Bond market have settled down after absorbing the news and now await the next news trigger that will move the needle.

Yesterday, some Wall Street Gold Traders doubled down on their positions after spot Gold tested the $1,300 dollar level and then reversed. I don’t know for sure, but after the news this morning I would imagine they sold out some of their long position and took their profits. Their strategy has always been to get in and get out, making $15 to $20 dollars. Let’s not forget that it’s the beginning of the Labor Day weekend, what a better gift to get them out of town early profiting off the poor job number report.

Digital Cash

Blockchain technology is alive and well and Cryptocurrencies are about to make a big impact on the World Stage.

Switzerland’s UBS is leading the way and has been in discussions with central banks to bring major world banks on line to a new Cryptocurrency platform, set to be introduced to the marketplace at the end of 2018.

Six banks have already put their John Hancock on the bottom line, they are: State Street Bank, CIBC, MUFG, HSBC, Credit Suisse and Barclays Bank.

The Cryptocurrency transaction using Blockchain technology will significantly speed up money transactions between banks with ultimately eliminating wire transfers as payments. Over the
long run this platform will reduce back office staffing, Clearing Houses and speed up financial transactions between banks.

The UBS name for their Cryptocurrency is the “utility settlement coin project,” started by UBS and Clearmatics Technologies in 2015.

UBS claims that each coin would represent a fiat currency, most likely US Dollars or Euro’s, and become the digital currency for financial transactions between banks.

Fed news

For the first time in a very long time, the CME Fed Watch tool shows a 1.4 percent chance of a CUT in the Fed interest rate at the September Fed meeting. It might be insignificant, but nonetheless, it is the first time we have seen a rate cut as a remote possibility. It’s only later this year in December that the CME Watch Tool shows a 36 percent chance of a rate hike. Investors and traders are feeling more comfortable that a rate hike is not in the cards and if you look at a year out, there is no chance of a rate hike indicated higher than 41 percent in any month.

Have a wonderful Labor Day weekend.

Investing in Precious Metals

Many Investment advisors recommend precious metals as part of a properly diversified portfolio to provide capital appreciation, liquidity, and a hedge against conventional paper assets. Because precious metals are counter-cyclical to paper assets, a diversification into gold, silver, and platinum can therefore reduce the total risk of your overall portfolio and preserve your wealth. History supports the premise that investment in precious metals is the best protection against uncertainties in the future.

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