Market Morning: Incomes Explode Near Google, Apple; Fed Minutes Nailbiter, Ford Reshuffle, Gold Jumps

Market Morning: Incomes Explode Near Google, Apple; Fed Minutes Nailbiter, Ford Reshuffle, Gold Jumps

5 of Top 10 Income Growth Cities Are Right Near Alphabet, Apple Headquarters

Median income growth in San Francisco over the last 5 years has been over 30%. In Fremont it’s 23%, and in Oakland 22%. Those are the top 3 cities for median income growth in the United States, and they are all in California, and they are all within a 45 minute drive of Alphabet (NASDAQ:GOOGL) headquarters in Mountain View. They are all also within an hour drive at most of Apple (NASDAQ:AAPL) headquarters in Cupertino. San Jose and Sunnyvale are also in the top ten for income growth, and they are even closer to Cupertino and Mountain View. You can even walk there if you were really into fitness or something. So there isn’t much of a surprise here. Silicon Valley is spreading the wealth, which was about to be spread to Long Island City by Amazon, but the socialists prevented that from happening by screaming against evil business, so Amazon (NASDAQ:AMZN) is moving to Tennessee and Virginia instead, which like money more. Implications being, during the next recession, these Californian cities will most likely be ground zero.

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Fed Minutes Today May Lead to Yield Curve Inversion, Says BMO Guy

The Federal Reserve will release its ever-popular document, the FOMC Meeting Minutes, where we all get to read the Fed tea leaves and determine how each of the FOMC members feel about the economy that particular day. One guy, Jon Hill, a strategist at the Bank of Montreal (BMO), says that if the minutes show more fear of a recession than the Fed had previous let on, then the spread between the 10Y and 2Y treasury bonds could go to negative and the yield curve could invert in a matter of weeks. The chances of the minutes turning out this way, however, are very remote, because FOMC members read Bloomberg, which published this story, and they don’t want an inverted yield curve even though they’ve emphasized in previous minutes release about just how much an inverted yield curve doesn’t matter. At all. This considered, the minutes are probably going to sing the praises of the US economy and show no sign of worry at all.

Ford to Close Oldest Brazilian Plant, Take $11B Impairment Hit

Ford (NYSE:F) will close its oldest plant in Brazil, ending its heavy commercial truck business in South America and taking and $11 billion hit on its balance sheet. The plant has been open since 1967. Ford rose 3.4% on the news yesterday. Ford shares have been cut in half since 2014, at the same levels they were at just prior to the last financial crisis, so something doesn’t smell right with the company. The dividend yield is past 7% though, so there’s a plus. Or a value trap.

Musk Predicts 500K Cars in 2019, or 400K, or Both

Tesla (NASDAQ:TSLA) CEO Elon Musk is back in the news with his tweets again, this time predicting 500,000 cars to be produced in 2019, but then backtracking and saying that while 500,000 cars will be produced, only 400,000 will be delivered, and now the media is taking him to task for changing numbers, or sticking to them, depending on how you want to look at it. Despite all the back and forth love/hate coverage, Tesla did manage to triple deliveries last year, but still lost about $1 billion, and had a $250 million loss in EBITDA.

Gold Jumps Again, Palladium Keeps Climbing to New Records

Gold (NYSEARCA:GLD) had quite a day yesterday, blasting through the $1,340 level with gold stocks outperforming. Junior mining stocks (NYSEARCA:GDXJ) had a particularly good day, up 4.2% and closing near the highs of the day. Meanwhile, no pullback in palladium yet, with the March contract for deliver up to a new high of $1,479 an ounce, up another 1.24% this morning. The metals might be responding to the increased chances of a rate cut by the end of the year as the US economy gets shakier, and the realization that quantitative easing may be eventually necessary again since we haven’t even reached 3% on the fed funds rate yet, the weakest rate hiking cycle since the 1950s, which marked the beginning of a decades-long bond bear market and eventually led gold to all time highs of $874 an ounce in early 1980, just prior to the previous bond bull market which began in 1981.