(Kitco News) – Monday, April 29th, 2019 – Gold and silver prices are posting moderate losses in early-morning U.S. trading Monday. The metals are seeing a corrective pullback after posting decent gains Friday that did produce technically bullish weekly high closes. June gold futures were last down $5.20 an ounce at $1,283.50. May Comex silver was last down $0.095 at $14.91 an ounce.
Asian and European stock indexes were narrowly mixed in more subdued trading overnight. U.S. stock indexes are pointed toward mixed openings when the New York day session begins. There continues to be little activity on the geopolitical front to influence world markets, making for a generally calmer and quieter trading environment, which is negative for safe-haven gold and silver prices. The U.S. stock indexes last week hit record or multi-month highs amid upbeat corporate earnings reports being released.
It will likely be a busier trading week this week, as the U.S. economic data pace picks up, including the Federal Open Market Committee (FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with a statement and a press conference from Fed Chairman Jerome Powell. No change in U.S. monetary policy is expected at this meeting.
U.S. corporate earnings reports will also continue to be released this week.
General Markets Summary
Investors will be bracing for a busy calendar in the week ahead, including the Fed’s interest rate decision, an update on employment, as well as a raft of corporate earnings.
The focus mid-week will most likely center on the FOMC’s conclusion to its two-day monetary policy meeting, including its rate decision and subsequent press conference from Fed chair Jerome Powell.
Investors will also be watching for the April report on the U.S. employment situation from the Bureau of Labor Statistics, after the previous month recorded an increase of 196k jobs.
Among the throng of companies on the earnings front, we’re set to receive results from Alphabet, Apple, GE, GM, Pfizer, Qualcomm, WW and a whole lot more!
Investors in the week ahead will be bracing for a busy calendar, including the Federal Reserve’s interest rate decision, an update on the U.S. employment situation, as well as a raft of corporate earnings.
Frenzied activity is set to envelop the financial markets straight out of the gates Monday, with notable quarterly results set for release by Google parent Alphabet (NASDAQ: GOOG, GOOGL), along with a gauge of some energy and chipmakers’ earnings.
The corporate numbers will be unveiled alongside further insights into personal income and spending figures, as well as core PCE prices – the Fed’s preferred measure of inflation.
Although the focus mid-week will most likely center on the FOMC’s conclusion to its two-day monetary policy meeting, including its interest rate decision and subsequent press conference from Fed chair Jerome Powell, there will also be some top-tier economic data, including fresh manufacturing sector figures and an update on private payrolls from ADP, which is generally viewed as a warm-up act to the all-critical non-farm jobs report ahead of the weekend.
At its previous monetary policy meeting in March, the FOMC – the Fed’s policymaking body – elected to maintain the target range for the federal funds rate at 2.25-2.5%, with no plans in 2019 to hike interest rates further, as well as to cease other quantitative tightening measures, including ending its US$4trn balance sheet shrinkage in September.
In the minutes to that meeting, the FOMC reiterated it will be “patient” as it determines what future adjustments to the target range for the federal funds rate may be appropriate – in light of global economic and financial developments and “muted inflation pressures.”
Market participants will also likely continue looking for any signals that may point to a potential recession on the horizon following the recent inversion of part of the yield curve.
Fitch Solutions recently observed that there “appears to be a high level of uncertainty as to when a recession could strike.
“Indeed, several yield curve-based models continue to suggest that the U.S. (and hence, most likely, the global economy) could fall into recession any time between late 2019 and early 2021.”
When the yield curve inverts – when long-term rates fall below short-term rates – a recession typically ensues. This scenario has included the past two recessions, which occurred in 2001, as well as from 2007 to 2009.
Since the latest inversion of the 3m/10y curve, which had reverted to positive at the end of March, investors have been busy speculating about the FOMC’s path of monetary policy normalization, and whether the two rate hikes that were once on the table for 2019 could end-up being a cut instead.
Eyes on Jobs
Ahead of the weekend, investors will generally be watching for the April report on the U.S. employment situation from the Bureau of Labor Statistics, after the previous month recorded an increase of 196k jobs, with notable gains in health care and professional and technical services. Also, February’s tally was upwardly revised to 33k from 20k, and the unemployment rate was unchanged at 3.8%.
Jefferies money market economist Thomas Simons noted that the March data pointed to “a labor market that remains solid.
“The payrolls bounce-back is the most important detail because it confirms that the soft February payroll rise was a once-off.”
He added that while the detail of the household survey was “unimpressive,” it posed “no reason for concern,” as it was probably “a hangover from the distortions to the January and February household survey that, unlike the establishment survey, were distorted by the government shutdown.”
Posted by :
Jack Dempsey , President
401 Gold Consultants LLC
jdemp2003@gmail.com
Note: This material was originally published on IBKR Traders’ Insight on April 26, 2019.
The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.