Welcome to this week’s edition of Curranomics® from the Crystal Beach Investor Center. A Happy Halloween weekend to you all. Despite some volatility during the past seven days, almost all major asset classes are essentially where they were a week ago. As such, this is going to be a slightly truncated market update.
TL/DR (Too Long/Didn’t Read) Summary: The Federal Reserve cut interest rates, to very little positive reaction. The shutdown of the US Federal Government drags on. A finalized US/China trade deal (supposedly) edges closer.
Stocks:
The main news this week was Wednesday’s widely anticipated cut in interest rates by America’s central bank, the Federal Reserve (Fed), announced after their October FOMC (Federal Open Markets Committee) meeting. The new rate is 0.25% lower than it was, now at 3.75-4%. The rate cut was supposed to help boost asset prices, but the language used by Fed chairman Jerome Powell indicated that another rate cut following the next such meeting in December (also widely expected by market analysts), is far from a done deal. As you all know, I’m not fluent in bankster-ese, but I think the following line taken from the Fed’s press release is the one which the financial markets interpreted negatively:
In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
Federal Reserve Board – Federal Reserve issues FOMC statement
Mmm. It’s subtle, isn’t it? The banksters are definitely experts in the art of using a thousand words when one will do. They’re somehow even worse at getting to the point than I am.
The Fed has a supposed “dual mandate” to maintain unemployment and inflation below certain levels (in my opinion, the best way it could achieve these would be for Congress to abolish it, but that’s another story). It receives information on both from the Federal Government, which then informs its monetary policy decision making. As such, I don’t think it helps that there’s probably a lack of data available to it as a result of the shutdown, which has been ongoing for a month or so. I do expect the shutdown to be resolved eventually, which should help the markets-especially as so many corporations are dependent on Federal tax subsidies-including ones which many of us are invested in, such as Tesla, Microsoft, Amazon, etc.
As an aside, per the US Constitution, Congressmen and Senators appear to be guaranteed their salaries during a shutdown (that’s a relief; for a minute there, I was worried about those overpaid suits missing their taxpayer provided paychecks):
are congressmen being paid during the government shutdown – Google Search
To the best of my knowledge, other taxpayer funded employees and programs of the Federal Government aren’t quite as fortunate.
In conclusion, then-as you can see, all three major indices are close to where they were a week ago. It is worth mentioning that the upward trend continues, with midweek all time highs reached by the S&P (>6,900), Dow Jones (>48,000), and Nasdaq (24,000):
nasdaq composite – Google Search
Gold/Silver:
Following last week’s abrupt decline, this was largely a week of consolidation in precious metals:
Gold closed the week at $4,015, down $120 or ~3% since last Friday. It remained above the key $4,000/oz support level-great news.
Silver closed the week at $48.85, up $0.08 or ~0.2% since last Friday. It has yet to regain the key $50/oz support level-not so great news.
Gold/Silver Ratio: Fell to 82.2 (was 84.6 last Friday). Due to gold falling but silver remaining where it was.
Cryptos:
Continues to be a source of frustration for me. As long as Bitcoin remains above $100k, I’d say the four-year-cycle isn’t over, but it can’t seem to decisively reclaim anything above $110k either.
Prices on the week:
Bitcoin’s down $1k at around $110k.
Ethereum’s level at around $3,900.
BTC/ETH ratio: Slightly up to to 28.4 (was 28.1 last Friday). This ratio has stalled in the 20s. If Ethereum’s going to have a decent final push in Q4 2025, we need BTC/ETH to rise first, as Bitcoin rises, then fall, as Ethereum catches up.
Ripple (XRP) level at around $2.50.
Solana’s down $7 at around $186.
PLEASE NOTE: Cryptos are the only assets covered in this newsletter which trade during the weekend. They’re also very volatile. And there’s usually a delay between the time I collect the data and send the newsletter. As such, the market may have moved substantially from the above numbers by the time you read this.
Bonds/US Dollar:
The US Treasury 10-year bond yield is now at 4.08% (was 4.00% as of last week, so slightly higher).
The 30-year bond yield increased by 6 basis points (was 4.59%, now 4.65%), so also higher on the week. This means the bonds’ prices have fallen, since bond prices and yields are inversely correlated.
The green values in the screenshot below from Bloomberg show that with the exception of the 30-year-bond, interest rates on all US government debt have fallen in the past twelve months. With the US borrowing more, and having to refinance more debt than ever, this is no doubt being welcomed by the US Treasury department. However, remember-if more and more of our debt is refinanced at the short end of the yield curve, even though it’s less expensive, we’ll be required to “roll it over” more often-meaning we’ll have to continually find buyers for it, as opposed to only having to do so every 10-30 years.
https://www.bloomberg.com/markets/rates-bonds/government-bonds/us
Meanwhile, the US Dollar has strengthened against the Swiss Franc-last week, it cost $1.26 to buy 1CHF. This week, it’s only $1.24. Likely due to supposed progress being made on the US/China trade deal. Still seems fairly range bound at the moment; one Swiss has cost between $1.22-$1.27 since June.
Alright. Until next time, I’ll talk atcha. If anyone has any comments or questions, please let me know.
Good luck and happy investing,
Tom Curran
