Platinum Cleared The "Launch Pad" For Palladium

In a previous post titled "Platinum Outshines Palladium, Yet Both Offer Opportunity," I discussed potential opportunities for investors to buy into these two white metals.

The fact that platinum was chosen over palladium by three out of five readers in the ballot was not surprising. The platinum/palladium ratio and the chart setup for platinum futures were both supportive of the title's argument.

Let’s check on what has changed in one month. We'll start with platinum futures.

Platinum Futures Daily

Source: TradingView

The price of platinum futures has been following my predetermined path with remarkable accuracy. I kept the previous annotations for you to see it.

The forecast that the price would reverse around the "golden cut" 61.8% Fibonacci retracement area proved to be successful, as the price tested the support twice and held. Subsequently, the futures price mimicked the trajectory of the blue zigzag, moving to the upside. Continue reading "Platinum Cleared The "Launch Pad" For Palladium"

Did The Fed "Pull A Homer"?

In an early episode of The Simpsons, “Homer Defined,” Homer saves the nuclear plant from meltdown by randomly pushing a button on the control panel. Soon “to pull a Homer,” meaning to “succeed despite idiocy," becomes a popular catchphrase.

Is that what happened last week? Did Jerome Powell and the Federal Reserve inadvertently “pull a Homer” by helping to create a bank panic that actually might accelerate their desire to slow down the economy? That might not have been their intention, but it sure looks like it.

At least it does to former White House adviser and Goldman Sachs President Gary Cohn (although he didn’t reference The Simpsons).

"We're almost getting to a point right now where he's outsourcing monetary policy," Cohn told CNBC, referring to Powell. “I don't believe they [the banks] are going to loan money, or as much money, and therefore we're going to see a natural contraction in the economy.”

Minneapolis Fed president Neel Kashkari said basically the same thing on CBS’s Face the Nation Sunday.

"It definitely brings us closer [to recession]," Kashkari said. "What's unclear for us is how much of these banking stresses are leading to a widespread credit crunch. That credit crunch ... would then slow down the economy.”

Now, I sincerely doubt that the Fed deliberately phonied up a banking panic in order to put the brakes on the economy.

Just the same, though, it certainly did play a major role in creating one not just through monetary policy — by raising interest rates so high and so fast — but also through neglect.

Just as it did in the road leading up to the global financial crisis, the Fed allowed problems at several banks it regulated to reach the point that generated an electronic run on deposits and the banks’ eventual failure. Continue reading "Did The Fed "Pull A Homer"?"

The WORST Stock Market Ever!

Please enjoy this updated version of weekly commentary from the Reitmeister Total Return newsletter. Steve Reitmeister is the CEO of and Editor of the Reitmeister Total Return.

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I woke up 2 days ago already knowing the theme for this article:

The WORST Stock Market Ever!

That’s because this ride is more Tilt-A-Whirl than Merry-Go-Round thanks to all the volatility. Pretty soon the corn dogs, cotton candy and elephant ears are coming up. (sorry for the visuals…but needed to drive home the point

Gladly if we pull back to the big picture, we can make sense of it all to chart our way to calmer shores. That is what is in store in today’s commentary.

Market Commentary

OK…I might be kidding about this being the worst stock market ever…but it’s certainly not fun. That’s because most people are rational and want things to move ahead in a more orderly fashion. This stock market of late has been anything but that.

Up, down and all around. Not just across weeks and months…but INSIDE of a single session. This candlestick chart of the past month tells that story in spades:

SP500 Chart

So much to point out on this chart starting with us being absolutely flat month over month. This would seem to indicate that nothing of significance happened. Continue reading "The WORST Stock Market Ever!"

Why Banks Fail

A lot, if not everything, in the world of finance, is based on trust: trust that the future would be better than the present; trust that a dollar bill would guarantee an equivalent worth of goods and services at a given point in time; and trust that wealth created would be safe, accessible, and transferable at all times.

So, when events like those unfolding over the past fortnight undermine one or more of the aforementioned collective beliefs, the ensuing risks can quickly become systemic and existential.

On February 24, KPMG signed an audit report giving SVB Financial, Silicon Valley Bank’s parent company, a clean bill of health for 2022.

On March 10, federal regulators announced that they had taken control of the bank, which reopened the following Monday as Deposit Insurance National Bank of Santa Clara.

This was the second-biggest bank failure since Washington Mutual’s collapse during the height of the 2008 financial crisis. It was soon followed by the third-biggest, with Signature Bank shuttered by the regulators to stem the fallout from Silicon Valley Bank’s failure.

The resulting crisis of confidence has somehow been contained with an assurance that all insured and uninsured depositors would get their money back, the announcement of a new lending program for banks, and 11 banks depositing $30 billion in the First Republic bank.

However, the contagion risk subsided only after claiming an illustrious victim from the other side of the Atlantic, with UBS agreeing to take over its troubled rival Credit Suisse for more than $3 billion in a deal engineered by Swiss regulators.

Since we are more or less up to speed, let’s look deeper into what can make banks seem unbankable in a little over two weeks. Continue reading "Why Banks Fail"

2 Tech Stocks For The Long-Term

High-growth tech stocks have had to bear the consequences of the Federal Reserve’s aggressive rate hikes since last year. Amid concerns of a recession, most tech stocks have suffered a correction in their share prices due to fears of softening demand.

However, with continued digital transformation and the growing interest in AI, the tech industry is well-positioned to grow.

Earlier this year, Fed Chair Jerome Powell said the “disinflationary process” had begun. However, inflation still remains above the central bank’s comfort level, as evidenced by February’s CPI report.

The Fed has indicated that it intends to hike rates higher than previously predicted.

Although the recent bank failures are likely to stop the Fed from undertaking a bigger rate hike at the policy meeting, it is expected to return to its hiking spree once the banking crisis eases.

However, that should not make investors stay away from quality tech stocks.

Wedbush analyst Dan Ives believes that cost-cutting by major tech giants will likely show improved profits this year. The recent banking crisis made investors count on reliable tech stocks, as is evident from the tech-heavy Nasdaq Composite’s 13.3% increase year-to-date and 3.2% gain over the past month. According to Gartner, worldwide IT spending is expected to rise 2.4% year-over-year to $4.50 trillion in 2023.

Several technical indicators look positive for Microsoft Corporation (MSFT) and Salesforce, Inc. (CRM), so it may be worth investing in these stocks now.

Microsoft Corporation (MSFT)

MSFT develops, licenses, and supports software, services, devices, and solutions worldwide. The company operates in three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. It has a market capitalization of $2.03 trillion. Continue reading "2 Tech Stocks For The Long-Term"