Mission Accomplished: Fed Officially Blows the Biggest Ever Bubble
The comments below are an edited and abridged synopsis of an article by Tyler Durden
The Fed has blown the biggest bubble ever: an all-time high monthly close on the S&P 500; an all-time low 10-year yield close; and an all-time high in gold. Stocks managed gains on the month for the fourth month in a row, with the Nasdaq doing best and the Dow the worst.
But it was in currency, commodity, credit and crypto markets that the real fun and games took place. Bonds were bid almost all of July, with the long-end outperforming and pushing to new record-low yields. Some highlights: 2-year Treasury yields fell for the eighth month in a row; 30-year Treasury yields fell for the fifth month this year; and the 2s30s curve flattened by the most since August 2019.
Gold and silver were higher on the month. July was silver’s best month since 1979 (when the Hunt Brothers tried to corner the market), and it was gold’s best month since 2011. Spot gold reached a new record above that set in September 2011, and futures topped $2,000. Silver is at its highest since June 2013. Oil is up for the third month in a row.
Helping all these assets rise in value, the Dollar Index suffered its biggest monthly drop since 2010, breaking a key up-trend line.
July summed up: stocks up; bonds up; gold up; silver up; oil up; crypto up; dollar down (along with Fed credibility).