Biden Believes Avoiding Recession is as Easy as Riding a Bike…
The Biden administration is still peddling the notion that a recession is avoidable… but all other indicators are suggesting otherwise. Biden’s reelection is looking as positive as the S&P 500.
Saturday, June 18th, 2022
Before we dig into this week’s news, welcome to the weekend edition of the Goldiggers Newsletter, where we dig for the golden stories in today’s market. Now - we’ll be honest - this week’s stories are more like lumps of coal than golden nuggets for everything BUT gold and silver (and oil)! So for all you silver investors, you may be down YTD, but let’s just be grateful your money is in silver and not Etherium at the moment.
Here are the big stories from the week:
Markets - The S&P 500, Dow, and Nasdaq have all entered a Bear Market
Economy - Fed increased interest rates by 0.75% in the biggest hike since 1994
Precious Metals - Amongst a sea of red - gold is green, and silver is only slightly red
Commodities - Biden wants to cut overseas shipping prices
Tech - “You can work remotely ONLY if your work is exceptional” - Elon Musk to Twitter employees
Crypto - Bitcoin has erased two-thirds of its value
Amongst all this - what’s important to remember is that we’ve gained a new holiday. Juneteenth, or June 19th, is now recognized on the calendar as a statutory holiday, marking the official end of slavery in the confederate states back in 1865. Over a decade and a half later, this momentous day earns the credit it is due, and the market earns another day of rest before resuming its volatility.
Markets
We’ve entered a Bear Market with the S&P experiencing its worst week since March of 2020, dropping 5.8% over the course of the week. The Dow and Nasdaq aren’t far behind, having each fallen 4.8%.
“It was a bad week, it was a really bad week,” shared Joe Saluzzi, co-head of equity trading at Themis Trading. “The Federal Reserve certainly didn’t give us any confidence this week… we’re kind of stuck right now.”
Here’s how the major indicators are stacking up year-to-date:
Dow Jones Industrial Average: -17.75%
S&P 500: -22.90%
Nasdaq Composite: -30.98%
Gold: +0.61%
Silver: -7.39%
Oil: +46.43%
Bitcoin (BTC-USD): -60.91.%
Ether (ETH-USD): -75.09%
Economy
The interest rate increases imposed by the Fed to fight inflation have reached their highest hike since 1994, triggering a brutal market sell-off.
These aggressive raises are intended to discourage consumer spending, and desired results are starting to track as we’re starting to see:
Retail sales fall
Auto purchases fall
Big-ticket item sales fall
Overall, we’ve seen retail purchases drop 0.3% for the first time in five months, suggesting there’s moderate demand amid decades-high inflation.
Precious Metals
“While stocks and bonds crashed this week, gold and silver rallied, recovering most of the ground lost in a sell-off on Monday. In Europe this morning, gold traded at $1850, down a net $20 having traded as low as $1806 on Tuesday. At $21.92, silver was marginally higher on the week, outperforming gold,” Tweeted Alasdair Macleod, Head of Research for Goldmoney.
Many investors continue to stand behind gold and silver as their chosen weapons to fight against the predicted upcoming recession.
Commodities
The Biden Administration believes they can prevent inflation by cutting interest rates, and are attempting to do so with Thursday’s signing of legislation to stop “shipping companies taking advantage of American families, farmers, ranchers and businesses.”
Biden believes this law can “at least marginally” reduce inflation.
Poll of the Week:
Do you think the Biden Administration is capable of preventing a recession from occurring?
Yes or No
Tech
Elon is infamous for HATING remote work - a belief that doesn’t bode well with the predominantly remote workforce that comprises Twitter. With Twitter potentially joining the Musk empire, current employees are uneasy about what the future of their roles will look like.
Well, Elon shared with them in his first direct meeting since signing his $44-billion deal that they can continue to work from home ONLY if their work is exceptional, hinting at potential layoffs if productivity wasn’t up to snuff.
Elon doesn’t care about being liked… he cares about winning, and he’s more than happy to be the least liked leader Twitter has ever seen.
Crypto
Have you ever accidentally erased a project you’ve been working on with no clue how to resurrect it? That’s what’s currently going on in the crypto community.
“The overall market capitalization of crypto assets has dropped to less than $1 trillion from its November 2021 peak of $3 trillion,” CNBC shared on Thursday. “It’s the first time since 2021 that the asset class has been worth less than $1 trillion.”
With nearly $2 trillion of crypto currency proving to magically “disappear”, the market is experiencing quite a shakedown from its usual euphoric state, making many new investors nervous about what the future holds.
Key Takeaways From The Week:
Markets - We’ve entered a Bear Market
Economy - “Stop spending money” - The Fed
Precious Metals - Actually pretty good
Commodities - “Cutting shipping costs will fix everything!” - Biden
Tech - Twitter employees must be exceptional - or else
Crypto - $2 trillion down
That’s all for this week’s updates. If you enjoyed what we dug up for you, register for our newsletter through the subscribe button below and we’ll continue to drop golden nuggets of market info into your inbox.
The opinions shared in this newsletter are not intended to serve as investment advice, and are not to be used as the basis for any sound investment, these are the opinions of the individuals mentioned in this newsletter as covered by the creators of the newsletter.
We cannot guarantee the accuracy of all the information shared above and advise you to do further research if you are interested in the investment opportunities shared in this post.