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Fleck's Thoughts
IndexClose% Change
Dow Transports14280.26-1.1
Dow Utilities932.68-0.76
S&P 5004124.410.37
Nasdaq 10013148.35-0.25
Russel 20001800.77-0.1
VIX Index18.58-0.64
10 Year Gov't Yield3.42-1.57
Spot Gold1985.720.83
Spot Silver24.01-0.39
GDX-Gold Miners33.052.16
Crude Oil80.446.3
Dollar Index102.05-0.44
Euro Spot1.090.63
Japanese 10 Year0.397.46
Shanghai SE3296.40.72
Long Bond 20-year132.190.79

OPEC Flexes


The big overnight news was the oil production cuts on the part of OPEC, along with the fact that they essentially said that they were doing it because, after draining the SPR of over 300 million barrels, the Biden administration didn't start to replace it (contrary to a previously unknown commitment to do so). If true, that makes the United States seem a bit untrustworthy. It also illuminates the incompetence of how the SPR has been dealt with, and both issues are slightly negative for the dollar at the margin. In any case, that news was responsible for approximately a $5 pop in the price of oil, which took it back to about $80.

Not Such a Slick Move Turning to the stock market action, the S&P gained approximately 0.5% early on, as stock speculators enjoyed the weaker ISM data (the bond geeks loved it, too). That rally didn't stick, however, and by midday the S&P was modestly weaker while the Nasdaq was 1% lower. In the afternoon, the indices bounced back to finish mixed with the small changes that you see in the box scores.

Away from stocks, as noted, green paper was a little weaker and fixed income was higher, and quite strong at the short end. I believe the fixed income market is starting to believe that the Fed is done hiking for quite some time, and I wouldn't disagree with that conclusion.

The metals had an absolutely wild ride for no particular reason that I could figure out. Gold fell about 2% last night before turning around and gaining 0.75% in New York. Silver saw similar but more subdued action. At its worst it was off a couple of percent but wound up closing about 0.5% lower. The miners were reasonably firm.

Some Miner Considerations I think we're slowly coming to the moment in time when the metals are going to do what we've been waiting for them to do. What's more, when gold finally does break out through $2,000 this time, I think it is much more likely to be sustainable than it has been in the past. All you have to do to see why is look at the chart and the current macro conditions and positioning. If that does happen, we might finally get a period where the miners do something really powerful on the upside.