Cloudy Earnings Season Might Spell Troubled Water for Economy

(Gold Silver Bitcoin) Companies aren’t letting investors know what to expect ahead of earnings season. Less than 100 have published their expectations, the least amount since Bloomberg began keeping track in 1999. The latest drop in reports is the quickest on record, down 35% from a year ago. Investors are concerned about a pullback in car sales and a slowdown in merger and acquisition activity.

“There are some warning signs that are getting darker,” said BlackRock’s Larry Fink, in an interview Wednesday on Bloomberg Television.  



Gasoline, wireless telephone services, used cars and trucks, new vehicles and apparel all led the declines in the Consumer Price Index.

March figures for U.S. automakers were less than expected and provided evidence that the U.S.’ boom cycle in car sales could be declining. General Motors Co and Fiat Chrysler Automobiles shares both declined nearly 4 percent. Ford Motor Co.

Reports indicated that lenders may have been behind the decline in auto sales last month. Verizon Communications Inc reported Thursday that results fell short due to a drop in subscribers paying a monthly bill despite its launch of unlimited data plans. Share declined 2.3% to $47.80 while net income attributable to Verizon dropped to $3.45 billion from $4.31 billion, or $1.06 per share, a year earlier. Total operating revenue fell to $29.81 billion from $32.17 billion a year prior.


After having reached an all-time high on March 1, the S&P 500 Index has been confined to a 55-point range. One week it gains. The next it loses. Deutsche Bank AG showed the Index demonstrated its lowest volatility to begin a new year since 1965.

The US government reported on Friday that price inflation in the US fell for the first time in 13 months (-0.3%). The year over year rate decreased to 2.4%, overshooting the Fed’s goal, but still below the historical average of 3.3%.

Gold suffered its largest one day drop in over six weeks leading into the French presidential election wherein both far-right and far-left candidates could be elected, though centrist candidate Emmanuel Macron apparently is in the lead. The euro increased to a three-week high against the U.S. dollar after Trump made comments that the dollar was too high.

Gold increase 0.16 an ounce to $1,281 an ounce, hitting a five-month high of $1,295.42, then declining. “Even though momentum has been positive there are other factors preventing a quick move higher from here – the sentiment is still that there will be stronger data from the U.S., and yields will probably rise. That will likely limit the upside (for gold),” said ABN Amro analyst Georgette Boele.

Equities increased marginally in Europe and the United States decreased safehaven buying demand behind gold. Holdings of the world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, the world’s largest gold backed exchange-traded fund, increased 11.8 tonnes on Wednesday – their biggest one-day inflow since September.



“While the metal is well positioned for a test of $1,300 with geopolitical concerns underpinning its safe-haven status, the failed tests of $1,290 are beginning to weigh upon investor
confidence,” MKS said in a note.

“Supply will struggle to register any growth, and indeed is likely to show a small decline following unusually high production in Russia in 2016. Demand, on the other hand, will continue to expand,” said Johnson Matthey Precious Metals Management in a quarterly report. “Higher vehicle production, combined with an increase in average catalyst loadings at a global level, will drive autocatalyst demand for the metal to another record level.”

Spot palladium increased 3.2 percent to $799.58 an ounce, on track for its biggest one-day jump since early February. Silver, down 0.4 percent at $18.01, while platinum was up 1.1 percent at $973.24.

The experts are optimistic, expecting 9.7 growth in S&P 500 earnings for the March quarter, 12 percent for the full year. Growth estimates were zero as reporting season drew near.over the past two years.

Fink anticipates a 5-10 percent correction. “If we don’t have earnings validated in these higher P/Es we could adjust downward 5 or 10 percent from here,” Fink said. “If the administration does succeed on some of these items then the market will then reassert itself going higher.”

The data in toto could point towards a bearish economic outlook – an excuse for the FOMC to leave interest rates.

A good sign for safehaven assets like cash, bitcoin, gold and silver.

 

Goldman Sachs Wants to Mine Asteroids and Run Bank with APIs in “Radical Future” Vision

goldman-sachs-hq-is-worth-176-million-less-now-than-it-was-last-year

An asteroid just passed earth. It had £3.7trillion worth of platinum on board. Goldman Sachs wants to mine that platinum.

The multinational financial company holds futuristic visions of tomorrow, starting with the “realistic” goal of mining asteroids for trillions of dollars worth of platinum. But, the bank’s plans don’t end there. Goldman Sachs wants to transform its business model here on Earth via APIs – and, yes, the plan will cost human jobs.

Noting that asteroids can be rich in mineral platinum – which grows scarcer and scarcer here on earth – Goldman Sachs has carved out a plan to procure more for human resources in a plan of science-fiction proportions.

Related: China & Russia Are Stockpiling Gold

Platinum, which costs $1 million per one thousand cubic centimeters, sits at just under $1,000 per troy ounce on terrestrial markets for investment bullion grade metal, which is referred to as the ‘rich man’s gold.’

“While the psychological barrier to mining asteroids is high, the actual financial and technological barriers are far lower,” reads a Goldman Sachs report. “Prospecting probes can likely be built for tens of millions of dollars each and Caltech (University) has suggested an asteroid-grabbing spacecraft could cost $2.6 billion [£2.1 billion].”

The firm adds: “Space mining could be more realistic than perceived.”

Goldman Sachs warns that mining asteroids for platinum could destroy platinum market dynamics, undermining the scarcity of metal, which is mainly mined in Russia and South Africa by workers paid very little.

“According to a 2012 Reuters interview with Planetary Resources, a single asteroid the size of a football field could contain $25bn- $50bn worth of platinum,” states Goldman Sachs. “Successful asteroid mining would likely crater the global price of platinum, with a single 500-meter-wide asteroid containing nearly 175X the global output, according to MIT’s Mission 2016.” This won’t deter Goldman Sachs.

“We expect that systems could be built for less than that given trends in the cost of manufacturing spacecraft and improvements in technology,” the investment bank surmises. “Given the capex of mining operations on Earth, we think that financing a space mission is not outside the realm of possibility.”

Further, Goldman Sachs’ deputy chief financial officer Marty Chavez portends a “radical future” for the Wall Street Bank back down on earth.

“We’re packaging everything we do, and actually, we’re redesigning the whole company, around APIs,” said the executive officer of the bank earlier this year.

Lloyd Blankfein, the chief executive of Goldman Sachs who once said the bank was doing “god’s work” felt Mr. Chavez needed a mentor.

Mr. Chavez, on his way to becoming the bank’s chief financial officer, received an email from Eric Schmidt, chairman of Google’s parent company, Alphabet.

“Hey Marty, I’d like to come over to your office to introduce myself,” the tech executive wrote.

“We’ve been talking ever since about the similarities in the businesses,” Chavez told a group of computer scientists at the Harvard Institute for Applied Computational Science earlier in 2017. “Some of the similarities are aspirational, I have to emphasize that, and some are there right now.” The YouTube video of the talk was recently released, and has been viewed approximately 2,000 times.

“Goldman is for risk what Google is for search,” as Chavez sees it.”Google produces software services, and those software services aggregate the attention of billions of people, and then Google sells the attention of billions of people to advertisers.”

As for Goldman Sachs?

“A client has a risk they don’t want or wants a risk they don’t have, and we make it happen for them,” Chavez explained. “This is the fundamental truth of Goldman Sachs. If the clients stop calling and talking to us about risks they have but don’t want or want but don’t have, then we have no business whatsoever.”

Goldman Sach’s Data Lake, which pools data on transactions, markets, and investment research, as well as insights from emails, voice calls and instant messages. The bank applies machine learning to the data it accumulates. The result is a guide for employees.

“What really makes us valuable is the immense amount of data that we have,” Chavez said. “In this job of inspiring our clients to call us because they have risks they don’t want or want risks they don’t have, there is incredible information content, and using that for the benefit of the clients to get a better result is what we’re up to.” Mr. Chavez compared how Google operates to Wall Street’s status quo.

“Imagine if Google had gone a slightly different route and they said, ‘Every time somebody wants to do a search, they pick up the phone, call their Google salesperson, read the search terms to the Google salesperson, who types them into the internal Google search engine, gets the results, and then reads them back over the phone,’” he pictures.

He mentions: “That is not the route Google took. Unfortunately, that is a pretty good description of how Wall Street works.”

The new Goldman Sachs is based on APIs if Chavez, who highlights the success of  Salesforce, eBay and Expedia API revenues, gets his way.

“Historically, the API has been human beings talking to other human beings over the telephone, and all the tools, the content, the analytics is on the internal platform only,” Chavez said. “We are shifting this radically and shifting this fast, and we’re packaging everything we do, and actually, we’re redesigning the whole company, around APIs.”

He adds: “We’re turning all of the verbs, all of the activities at Goldman Sachs, into APIs,” Chavez said. “One of the things we’re insisting on is a very high standard of lovely and impeccable documentation for these APIs, because we’re opening up the vertical monolith which used to have only one API point, which was human beings on the phone.”



Goldman Sachs Outlook On Gold No Bueno

Goldman Sachs doesn’t have a bullish outlook for precious metals. The investment banking firm foresees prices dropping to $1,000 in 12 months as the Federal Reserve maintains a quiet quantitative easing program.

Gold has increased 8% since mid-July and currently trades for $1,165 per ounce.

“A marked increase in Chinese official sector physical gold purchases during 3Q15 also likely supported gold prices,” Goldman said in the note. The bank anticipates a 25 basis point rate hike at the December Federal Open Market Committee (FOMC) meeting followed by 100 basis points of rate increases during 2016. (more…)

Ecuador Transfers Gold To Goldman Sachs For Cash

[heading]Ecuador Transfers Gold To Goldman Sachs For Cash[/heading]

Ecuador’s transfer of over half its known gold reserves to Goldman Sachs Group Inc. for three years, in order open up cash for the South American nation, will see the central bank sending 466,000 ounces of gold to Goldman Sachs, worth approximately $580 million at current price levels. The nation expects to get the same amount back three years from now in exchange for the cash. Ecuador, in return, will receive “instruments of high security and liquidity” and anticipates to earn a profit of $16 million to  $20 million over the three years for lending her gold.

The central bank did not detail additional terms of the transactions, including feeds or financing costs paid to Goldman Sachs. Five years ago Ecuador defaulted on $3.2 billion in bonds. The recent move with Goldman Sachs comes as the South American nation must meet a budget deficit of approximately $4.94 billion. In April, President Rafael Correa said he planned to sell approximately $700 million of foreign debt this year in the country’s first international bond sale since Ecuador’s 2008 and 2009 default. (more…)

Big Banks Prepare To Exit Physical Commodities

[heading]Big Banks Prepare To Exit Physical Commodities[/heading]

JPMorgan made headlines last month with an astonishing announcement that it would be getting out of physical commodities. This was shocking for everyone who had followed the contentions that the bank was in fact manipulating the commodities, like silver.

Then, revelations about how banks were manipulating the storage warehouses and aluminum markets of some commodities. All of the sudden, banks were coming under mainstream pressure for physical commodity manipulation. No explicit mentions in the mainstream regarding silver. After all, the SEC had already let JP Morgan off the hook. (more…)

House Of Cards in Commodities, From Beer Cans to Silver Bars

[heading]House Of Cards in Commodities, From Beer Drinkers to Silver Bars[/heading]

“Many more of our clients today have commodity exposure than they ever had before, or they ever realized they had. It’s important to our business.” –  Gary Cohn, Goldman president and chief operating officer. “

The gaming of the aluminum market has cost aluminum purchasers an extra $3 billion, an expense that has been passed onto beer and soda drinkers. (more…)