1. Recession, Inflation, and a Critical Jobs Report Ahead
Not much data is due today, but there are a few things we know from last week heading into this week.
Canada is in a technical recession.
And inflation in both the U.S. and Canada remains elevated—all thanks to fuel prices at the moment.
This week, the biggest data release and the one that will dominate headlines will be the employment numbers on Friday.
Over the past few months, U.S. job numbers have taken a hit. Growth has stalled.
For Canada, the job market looks dire. Three of the last four months have seen job declines.
2. Record Highs, No Fear, and Rising Earnings Estimates?
On Friday, the S&P 500 closed at a record high.
We are at record stock market levels with very little fear in the market. Have you looked at the VIX lately?
What shouldn’t be forgotten is that all of this is happening while the backdrop gets murky. Economic data isn’t as strong. Consumer sentiment is getting a punch in the face. The job market is stalling. Inflation fears remain. And yields are still elevated.
One would expect analysts to be revising their earnings estimates lower. Generally, that’s what happens during the first two months of a quarter.
Guess what? Analysts are actually raising their estimates. Rarely do you see this happen.
3. Middle East Risks Back in Focus as Oil Moves Higher
The Israel-U.S.-Iran conflict could potentially be heating up again as Israel has gone on the offensive in Lebanon.
Peace and ceasefire talks have somewhat stalled, as President Trump has said he’s not in a hurry to make a decision. Trump himself has said he doesn’t care much about Americans’ finances, so he can take his time, right?
Oil is catching a bid once again this morning as the market tries to reassess risks.
The Strait of Hormuz remains effectively closed.
The longer this goes on, the greater the economic damage will be.
4. Gold Tests Support, Silver Consolidates, Copper Soars
Gold is down roughly $40 this morning, trading at $4,500. It recently found support at the 200-day moving average. If we see selling again, will this support hold?
Since around mid-May, silver has been choppy, with trading ranges getting smaller. In the very near term, $73 and $78 are worth watching.
Copper is flying this morning…
It potentially has all the legs to move higher. A close above $6.50 could be massive.
But you’ve got to remain cautiously optimistic.
5. Bitcoin Breakdown, Berkshire’s Deal, and SpaceX IPO Buzz
Bitcoin touched its 200-day moving average and dropped. It is currently trading around $73K and has broken below the support level near $75K. Assuming there is no catalyst, the next support level isn’t until $65K.
Berkshire Hathaway is buying Taylor Morrison for $6.8 billion—finally, the cash is being put to work. More to come?
There is also a lot of buzz surrounding a potential SpaceX IPO. Be very careful if and when it happens. Sometimes these kinds of events become classic “sell the news” moments.