Starting Friday, Thousands of California Tenants Still Waiting on Rent Relief Can Be Evicted
KQED California News, Thursday
The stock market usually precedes a change in the economy by eight to twelve months. The headline quoted above comes just eight months after the first major indexes topped last November. We are also seeing headlines that individuals cannot pay their electric bills in San Antonio, and are facing cut-offs. Not to mention the lack of revenue for CPS Energy.
Crude oil has been incredibly volatile. After regaining the highs over $110 last week it has fallen over $3 today to $106.70. Seeking to wrest itself from Russian natural gas, Europe is re-opening coal plants and taking a second look at its green energy at any price strategies. Just today as I write the Supreme Court says the EPA overstepped it authority in 2015 on limiting greenhouse-gas emissions from power plants. That’s good but the Court can only rule on a case by case basis. The EPA has no such limit and can re-write its rules on a daily basis. It cares not how many times it loses, it only keeps ruling. New rules on carbon dioxide emissions are the latest ploy in stopping fracking in the Permian Basin. Our Basin now produces 43% of U.S. oil and gas.
I was expecting a bigger pullback in energy prices but it is not happening. It now appears we are headed for a 2008 type run-up when oil hit $140. Natural gas is a good example. From $3.50 in January it hit $9.50 in June and has found a buyer at $6.00. UNG the natural gas ETF is down from $32 to $20. A bottom is likely at $18.
After several large down days it appears the SPX has found support this morning at 3,740. It dropped right to that level in the first hour of trading today and has re-bounded to 3,798. Markets often rally around three-day weekends and we have one right now. Best estimate is a rally into Friday week ending July 8.
We have been adamant that the bear market began November 2021-January 2022. Plan on moving to bonds or cash this next week. The NASD has already lost 31% of its value in six months. That took over a year in 2000-2002.
Our prediction that bonds would rally off the recent 3.5% 30 year Treasury yield has occurred. Closed end municipal bonds are roaring off their lows.
It is said the first stage of a bear market is denial, then fear, then acceptance, and finally surrender and give up. We are at the denial stage now.
Investors in silver, despite those clever William Devane ads on tv, are throwing in the towel at a rate not seen since the 2001 lows. With governments world-wide awash in debt now facing higher rollover interest costs, currencies will be in trouble. Silver miner CDE has fallen from $12 to $3 in the last eighteen months. We will be watching for signs of a bottom.
