If Gold Eats its Dinner- it Gets a QE4 Treat

Summary

Markets yesterday took a header on the Consumer Confidence report, but stocks recovered. Traders took it as another brick in the Fed's wall to justify a rate raise in September. It sent money rotating out of Stocks and Oil, and into cash domestically. Meanwhile it served to further strengthen the USD globally. The growing perception that a Fed hike was possible sent stocks lower initially and did not help Oil which was already suffering from supply overhangs. It did not bode well for Dollar priced Precious Metals and anything else priced in dollars. So why the Equity rally afterwards?- SK

Focus: Stocks bounced and Gold did not. Why?

So why did Stocks recover and Gold not if we are looking at a more likely rate hike? Because stocks took their final cue from the increased chance that the JGB will be pushing the pedal to the metal on stimulus. This will levitate global stock markets. Gold chose to focus on the Fed rate hike, while stocks are focusing on the QE to come. Note the first story in the Global News section. Data watchers will take note of ADP's employment change at 8:15 for clues to the Aug Jobs number due Sep 2. Chicago PMI for Aug, and pending home sales will also get some attention, Crude inventories are due out at 10:30. - VBL

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h/t @RampCapitalLLC for pic. Follow for stock market comments and the 3:30 ramp

Global News

• More QE From Japan May Precede The Next Fed Hike- which plays right into our current thesis: Japan QE> Fed Hike>US QE---> INFLATION
• US 10-year yield on for biggest monthly rise in over a year- which makes it GS;1-PIMCO:0 so far. Both can be right. PIMCO bets on QE 6 months from now. GS reverses in 2
• Nikkei bucks downward trend in Asia markets, boosted by weak yen- because the JGB will unleash the QE kraken soon?

Market News

• Energy ETF Flows Swell With Risk Embraced in Sideways S&P 500
• Time To Reassess- GLD Elliot wave analysis is very subjective and long term, but should be read to keep bulls honest
• Gold ETFs, Stocks Risk Meltdown As Strong Dollar, Data And Fed Weigh- the mantra BTD in Equities is increasingly applying to Gold on these rate hike scares
• Pros Bet on an Oil ETF Rally- more likely they are so short Energy debt they want to hedge their risk
• In Donald Trump, Gold Bugs See One of Their Own-

Our Markets

PRICECHANGE% CHG GC=F1,316.80+0.30+0.02% SI=F18.80+0.12+0.65% PL=F1,064.00+7.40+0.70% HG=F2.08+0.01+0.26% NG=F2.83+0.00+0.07% CL=F46.02-0.33-0.71% GLD125.03-1.27-1.01% USO10.73-0.12-1.11% 

On MarketSlant

• UPDATED"Technical Brief: Gold Today and 5 Years from now
• Abolish Cash"- KC Fed paper
• Fed Autopsy: Why Fischer was Bluffing in one Chart
• Morning Call and 2015 Gold Flow Chart
• ICYMI: Clinton Calendars released POST Election
• Why Gold Bulls Should Want a Rate Hike- Analysis
• Norway's Bank Brings Home Gold- but that's not our business
• BNP Calls For ‘Robust’ Jobs Growth, Rate Hikes

Global Markets

Shanghai 3,085.49+10.81 (0.35%)Nikkei 225 16,887.40+162.04 (0.97%)Hang Seng Index 22,976.88-39.23 (-0.17%)TSEC 9,068.85-41.71 (-0.46%)FTSE 100 6,811.10-9.69 (-0.14%)EURO STOXX 50 3,045.56+14.81 (0.49%)CAC 40 4,482.70+25.21 (0.57%)

Currencies

EUR/USD1.1139-0.0009 (-0.08%)USD/JPY103.2680+0.3795 (0.37%)GBP/USD1.3134+0.0044 (0.33%)USD/CAD1.3104+0.0014 (0.11%)USD/HKD7.7569-0.0005 (-0.01%)USD/CNY6.6808-0.0106 (-0.16%)AUD/USD0.7514-0.0008 (-0.11%)

Economic Calendar

DateTime (ET)StatisticForActualBriefing ForecastMarket ExpectsPriorRevised FromAug 298:30 AMPersonal IncomeJul0.4%0.4%0.4%0.3%0.2%Aug 298:30 AMPersonal SpendingJul0.3%0.2%0.3%0.5%0.4%Aug 298:30 AMCore PCE PricesJul0.1%0.1%0.1%0.1%--Aug 309:00 AMCase-Shiller 20-city IndexJun5.1%5.3%5.1%5.3%5.2%Aug 3010:00 AMConsumer ConfidenceAug101.197.597.096.797.3Aug 317:00 AMMBA Mortgage Index08/272.8%NANA-2.1%-Aug 318:15 AMADP Employment ChangeAug-190K170K179K-Aug 319:45 AMChicago PMIAug-54.054.555.8-Aug 3110:00 AMPending Home SalesJul-0.7%0.7%0.2%-Aug 3110:30 AMCrude Inventories08/27-NANANA-Sep 17:30 AMChallenger Job CutsAug-NANA-57.1%-Sep 18:30 AMInitial Claims08/27-267K265K261K-Sep 18:30 AMContinuing Claims08/20-NANA2145K-Sep 18:30 AMProductivity-Rev.Q2--0.6%-0.6%-0.5%-Sep 18:30 AMUnit Labor Costs - Rev.Q2-2.5%2.1%2.0%-Sep 110:00 AMConstruction SpendingJul-1.0%0.6%-0.6%-Sep 110:00 AMISM IndexAug-52.052.252.6-Sep 110:30 AMNatural Gas Inventories08/27-NANA11 bcf-Sep 12:00 PMAuto SalesAug-NANA5.16M-Sep 12:00 PMTruck SalesAug-NANA9.10M-Sep 28:30 AMNonfarm PayrollsAug-200K180K255K-Sep 28:30 AMNonfarm Private PayrollsAug-190K175K217K-Sep 28:30 AMUnemployment RateAug-4.9%4.8%4.9%-Sep 28:30 AMAverage Hourly EarningsAug-0.2%0.2%0.3%-Sep 28:30 AMHourly EarningsAug-NANA0.3%-Sep 28:30 AMAverage WorkweekAug-34.534.534.5-Sep 28:30 AMTrade BalanceJul--$40.0B-$43.0B-$44.5B-Sep 210:00 AMFactory OrdersJul-2.2%2.0%-1.5%-