WELCOME TO LEIBOVIT VR NEWSLETTERS – THURSDAY – MARCH 7, 2024

BULL TRAP STILL UNDERWAY

It symbolizes power, good fortune, and strength and is associated with auspicious traits like intelligence, ambition and charisma. Historically linked with imperial power, Chinese emperors considered themselves descendants of dragons, emphasizing the dragon’s esteemed position.

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NEXT PODCAST THURSDAY EVENING

https://www.howestreet.com/2024/03/gold-bitcoin-uranium-interest-rates-real-estate-evs-autos-mark-leibovit-wolf-richter-ross-clark-this-week-in-money/

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U.S. Stocks Move Back To The Upside Following Powell Testimony

Following a notable pullback to start the week, stocks moved mostly higher during trading on Wednesday. The major averages all moved to the upside on the day but remain well off their recent record highs.

The major averages finished the day off their highs of the session but still in positive territory. The Nasdaq climbed 91.95 points or 0.6 percent to 16,031.54, the S&P 500 rose 26.1 points or 0.5 percent to 5,104.76 and the Dow edged up 75.86 points or 0.2 percent to 38,661.05.

The rebound on Wall Street partly reflected a positive reaction to congressional testimony by Federal Reserve Chair Jerome Powell.

Powell told the House Financial Services Committee it will likely be appropriate for the Fed to begin lowering interest rates at “some point this year,” although he reiterated officials need “greater confidence” inflation is moving sustainably toward 2 percent.

The Fed Chief described the economic outlook as “uncertain” and said progress towards the Fed’s 2 percent inflation objective is “not assured.”

“Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2 percent,” Powell said.

He added, “At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment.”

Powell said future interest rate decisions will be based on careful assessment of the incoming data, the evolving outlook, and the balance of risks.

Meanwhile, a report released by payroll processor ADP showed private sector employment in the U.S. increased by slightly less than expected in the month of February.

ADP said private sector employment rose by 140,000 jobs in February after climbing by an upwardly revised 111,000 jobs in January.

Economists had expected private sector employment to grow by 150,000 jobs compared to the addition of 107,000 jobs originally reported for the previous month.

Sector News

Semiconductor stocks turned in a strong performance on the day, with the Philadelphia Semiconductor Index surging by 2.4 percent to a record closing high.

Considerable strength was also visible among computer hardware stocks, as reflected by the 1.8 percent jump by the NYSE Arca Computer Hardware Index. The index also reached a record closing high.

Gold stocks also saw significant strength amid an increase by the price of the precious metal, resulting in a 1.8 percent gain by the NYSE Arca Gold Bugs Index.

Airline and networking stocks also moved to the upside on the day, while banking stocks gave back ground after turning in a strong performance on Tuesday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Wednesday. Hong Kong’s Hang Seng Index jumped by 1.7 percent, while Japan’s Nikkei 225 Index edged slightly lower and China’s Shanghai Composite Index fell by 0.3 percent.

Meanwhile, the major European markets all moved modestly higher on the day. While the U.K.’s FTSE 100 Index climbed by 0.4 percent, the French CAC 40 Index rose by 0.3 percent and the German DAX Index inched up by 0.1 percent.

In the bond market, treasuries extended the strong upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.3 basis points to a one-month closing low of 4.104 percent.

Looking Ahead

Powell is due to deliver his second day of testimony on Capitol Hill on Thursday, while reports on weekly jobless claims and the U.S. trade deficit may also impact trading.

 

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Top real estate CEO warns ‘500 or more’ banks will either fail or be consolidated over the next two years -Yahoo! Finance

The talking heads at the Fed want us to believe our banking woes are behind us, but our clients continue to share their concerns that we’ve only seen the beginning. More and more experts in this sector are sounding an alarm that the coming commercial real estate correction will be devastating for banks. We tend to agree.

by Will Daniel

Ever since four regional banks holding a combined $532 billion in assets—headlined by Silicon Valley Bank—failed in March 2023, regional banks have been under scrutiny from regulators. And given the commercial real estate (CRE) industry’s issues, a key focus has been on banks with the most exposure to the volatile sector.

In an upcoming white paper seen exclusively by Fortune, RXR CEO Scott Rechler described how regional banks will face a “slow-moving train wreck” as waves of commercial real estate loans mature over the next few years. Rechler has faith that many commercial real estate owners, operators, and lenders will figure out a way to overcome the challenges facing them, but he’s more skeptical about regional banks. “I think there’s going to be…500 or more fewer banks in the U.S. over the next two years,” he said. “I’m not saying they’re all going to fail, but they’re going to be forced into consolidation if they don’t fail.”

“They don’t have a business model that’s going to enable them to stand alone, and be competitive, and retain deposits and service customers the way that they have,” he added.

Regulators’ fears about regional banks with exposure to CRE aren’t unfounded, New York Community Bancorp (NYCB) being the prime example. Shares of NYCB have plummeted roughly 78% from their July 2023 peak due to concerns over the bank’s CRE exposure. The pain accelerated after NYCB reported a surprise fourth-quarter loss and slashed its dividend on Jan. 31, 2024, because it had to put away more money to cover its CRE holdings.

For Rechler, regional banks’ CRE exposure could even end up being a “systemic issue.”

$1 Trillion in 100 Days! -Daily Reckoning

What used to take 205 years, now takes 100 days! This sounds like an innovation in efficiency, but sadly, it’s just the astounding growth rate of the US debt. Can we continue on this trajectory? It seems impossible, but when have you ever known the government to slow down spending?

by Brian Maher

How does a man descend into bankruptcy?

Gradually — then suddenly — in Mr. Hemingway’s famous telling.

The United States government has passed beyond bankruptcy’s gradual phase.

It has entered bankruptcy’s sudden phase.

Mr. Michael Hartnett, Bank of America’s chief strategist:

“The U.S. national debt is rising by $1 trillion every 100 days.”

United States debt first scaled $1 trillion 205 years after its inception. And today?

The work of 205 years presently reduces to 100 days.

$1 trillion every 100 days? Impossible — but there you have it: Debt Goes Exponential

And so today a pearl of sorrow courses down our crimson cheek… a mournful tear upon the ashes of the nation’s finances.

We fear its debt is assuming the hellacious form of a parabola.

That is, the business begins to assume an exponential aspect.

If only the nation’s gross domestic product could maintain pace with its parabolic and exponential debt.

It cannot… alas.

As gold scales all-time highs, Wall Street analysts say it has even further to go

Gold is headed higher and it’s not stopping soon. As we kick off a very uncertain year, gold should shine until at least November, and likely even longer based on who is elected.

by Jenni Reid

Gold prices pushed higher Tuesday after futures pricing for the precious metal notched fresh records in the previous two sessions — with analysts seeing strength lasting at least into the second half of the year.

The gold contract for April on Monday closed above $2,100 per ounce for the first time, and was up 0.37% at $2,134.2 at 1:15 p.m. in London. Spot gold was trading 0.7% higher at $2,129, though market-watchers note that in real terms, adjusted for inflation, gold is well below past peaks.

In a Monday note, analysts at Citi described themselves as “medium-term bullion bulls,” calling a 25% probability of gold averaging a record $2,300 per ounce in the second half. Their base case remains $2,150, and they reiterated a “wildcard” call for trade reaching $3,000 over the next 12 to 16 months.

Citi describes gold as a developed market “recession hedge,” and increasingly see tailwinds from uncertainty around the U.S. election in November.

Analysts at Berenberg also noted Monday that a Donald Trump victory in the election would provide a “major positive for gold,” with further support for the safe-haven asset from volatility around the ongoing wars in Ukraine and Gaza

America on Eve of Banking Crisis, Warns Ex-IMF Official, With Hundreds of Lenders at Risk of Failure -The Daily Hodl

by Alex Richardson

A former IMF official believes the U.S. Federal Reserve has pushed America to the brink of another banking crisis.

Desmond Lachman, who was deputy director in the International Monetary Fund’s (IMF) Policy Development and Review Department, says in a new blog post for public policy think tank The American Enterprise Institute (AEI) that Fed Chair
Jerome Powell is “inviting a banking crisis.”

With banks already under pressure, Lachman says the Fed is making matters worse by keeping monetary policy tight, and liquidity thin.

The ex-IMF official says it’s a mistake that’s significantly raised the odds of a hard landing for the US economy while pushing lenders to the eve of a fresh banking crisis.

“In 2021, the Fed chose to ignore the markedly expansionary fiscal policy stance when it kept flooding the market with liquidity. The net result was a surge in inflation by June 2022 to a multi-decade high of over 9%.

Today, it seems to be making the opposite mistake of keeping monetary policy tight on the eve of a banking crisis at home and a weakening economic situation abroad. Unfortunately, this raises the risk of a hard economic landing within
the next year or so.”

Lachman warns that commercial real estate, which makes up a major portion of US banks’ loan portfolios, is a clear Achilles heel for the industry that could result in the failure of around 385 small and medium-sized banks. 

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