The Buzz on Business for April 30^th, 2024

For some months now, we have wondered and worried on this podcast about the rapid increase in the price of Gold. In October and November of last year, an ounce of Gold could be had for $1600 and some change, about where it stood in 2020 and, 2012 and 2011.

In the six months since, Gold is up over 40% and as recently as last week, it closed at an all-time high of $2414. On Monday, it closed at $2347, down about four dollars an ounce.

One theory that attempts to explain the increase suggests that governments in Asia, particularly China, are attempting to build their gold reserves in order to break away from the US Dollar as the reserve currency in world trade. One report we read stated that central banks around the world have purchased over two thousand tons of Gold over the last two years, with China as one of the biggest buyers.

Our view has been—and is—that the run-up in Gold signals a persistently high level of inflation. But hey! Two things can be true at once.

Stock Market Report

Stocks traded in a narrow range on Monday before closing, with small gains on very light volume.

• • The Dow Jones Industrial Average was up 146 points. That’s four-tenths of 1%. It closed at 38,386.

• • The S&P 500 was up three-tenths of 1%. That’s 16 S&P points, and it closed at 5,116.

• • The NASDAQ Composite was up four-tenths of 1%, that’s 55 points, and it closed at 15,983.

• • And the Russell 2000 was up seven-tenths of 1%, that’s 14 points and it closed at 2,016.

Bond Market Report

Interest rates were down across the board ahead of the opening this morning of the two-day meeting of the Federal Reserve Open Market Committee.

• • The yield on the 2-year treasury was off two basis points, and it closed at 4.979%.

• • The 20-year was off five ticks and closed at 4.842%.

Oil, Gold, and Bitcoin

• • Oil was down a dollar and closed at $82.65 a barrel.

• • As we said a minute ago, Gold was off $4.10, and a troy ounce will now set you back $2,347.40.

• • Likewise, Bitcoin had a small loss. It was off $776.10, and at 4:00 PM Eastern Time stood at $63,013.18.

Earnings, Economic Reports, Fed Meeting: On tap

Eleven public companies that made it onto the giant quote machine reported earnings on Monday. All but two exceeded expectations. It’s still early, but first-quarter earnings season continues to look good.

Nothing on the economic calendar on Monday. Today we get a couple of reports that might be interesting, but nothing that’s likely to move the markets one way or the other.

Obviously, what’s on everyone’s mind is the meeting that begins later this morning of the Federal Reserve’s Open Market Committee. No one is expecting a rate cut this time around. But everyone and their brother will be focused on the statement that will be released tomorrow afternoon and Chairman Jerome Powell’s press conference.

We will be interested in the Dot Plot, the anonymous estimate of interest rate expectations from committee members. We’d like to see how it has changed over the last six weeks, given the spike in inflation and the disappointing Gross Domestic Product numbers we’ve seen in that time.

We also get a couple of big-name earnings announcements today. McDonald’s, Coca-Cola, Eli Lilly, Starbucks, 3M, which caused a bit of a stir last quarter, and of course, Magnificent Seven member Amazon.

We will be watching all of this very, very carefully so we can report all of it to you here on the Buzz.