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Fleck's Thoughts
IndexClose% Change
Dow Transports14547.180.59
Dow Utilities896.221.37
S&P 5004363.620.41
Nasdaq 10014766.750.63
Russel 20002210.65-0.79
VIX Index21.07-1.08
10 Year Gov't Yield1.52-0.39
Spot Gold1764.640.25
Spot Silver22.650.1
GDX-Gold Miners30.341.88
Crude Oil77.05-2.38
Dollar Index94.220.26
Euro Spot1.16-0.34
Japanese 10 Year0.065.08
Shanghai SE3568.170.9
Long Bond 20-year159.470.2

Stocks Stabilize


The indices were under pressure overnight and opened 1% lower, plus or minus. From there they immediately bounced, such that by midday the S&P was only down about 0.5% with the Nasdaq was not too far from unchanged. In the afternoon, the indices continued to push higher and managed to close with the modest gains that you see in the box scores.

Away from stocks, fixed income was mixed, and green paper was stronger. Meanwhile, the metals were weak overnight, as gold lost 1% and silver fell almost 2%, but in New York, they trimmed the losses and ended up turning slightly green. The miners were stable for the most part all day and closed pretty firm for a change.

After All, It's What They're Good At It feels like the miners are finally trying to dig in, and all we would need is a move higher in gold to get them in gear. If that is to happen, it probably won't be until after the non-farm payroll report. Having said that, all the negative trends in the world, of which there are many, are positive for the precious metals. So, once they start to act better, they're liable to get a large following quickly.

As we've seen in Ask Fleck, the horror stories of shortages in various things caused by bottlenecks and supply chain disruptions are going to be with us for a long time. Now there is also starting to be some angst about what energy supply may look like versus demand this winter, an imbalance that has been exacerbated by ESG/greenness. Like many well-intentioned ideas, this one hasn't been particularly well thought out. It's sort of like printing money. It seems to work, so why not do more of it? Then eventually the consequences become epic problems.

Full Spend Ahead There are so many different ideas like this that have been pushed well past how far they should have been, such as the just-in-time focus of supply chains, that the disruptions and knock-on effects are liable to be with us for quite some time and almost certainly to get worse before they get better. Meanwhile, there's really nothing the central bankers (or politicians) can do. They can try to tighten, but that will hurt asset prices, which will cause them to rethink their plan. Nor will it alleviate a lot of the problems that are somewhat structural in nature caused by the sort of thoughtlessness about consequences that has been the standard policy for the last 20 years or so.