Eggflation, Interest Rate Chicken Games, and the Market’s Super Bowl Sprint
Well this is boring. The Taylor Swift tour continues and the Chiefs are headed to New Orleans, taking down the Bills once again. But, how about those Birds – dropping guano on the Commanders??? Speaking of birds, what about the incredible edible egg. Everyone buys eggs. Everyone buys eggs frequently. As a result,everyone knows about the price of eggs. They’re ingredients in a lot of foods. If you’re still looking to get your bench press up over 300 lbs so you can qualify as an employee at The Tank Tiger, it’s a great protein source. Eggs used to be a cheap source of protein. Except they’re not cheap anymore. Wholesale prices of grade A large eggs destined for retail sale rose to a high of $5.91 per dozen at the end of 2024 and rose another 31¢ in the first two weeks of January. Prices had doubled since late October and were 3.3 times higher than a year earlier. First it was inflation. Now it’s bird flu. Once one chicken tests positive for the bird flu, sadly the entire flock has to be put down. The USDA forecasts that egg prices will continue to rise through the first few months of 2025 before dropping to about half the peak price, according to the agency’s January forecasts. Follow $$$MR. MARKET$$$ for more amazing stock tips (hint ticker = CALM). Meanwhile, we may be left to ponder…which came first?
Wall Street on Friday also looks to be Super Bowl Bound as the S&P 500 hit a record high last week. Tomorrow’s Fed meeting is expected to leave rates untouched, even though over at Davos there was clamoring for lower interest rates. Are they just playing a game of chicken? We must always remember that Chairman Powell and the Fed can only control short term rates (the Fed Funds rate). Even if the Fed Funds rate were sent down to zero, that doesn’t mean long term rates (the 10 year) will go down. The market (not the Fed Chairman or the President of the United States) will always determines what long term rates will be. In fact, the 10 year rates are higher than when the Fed started cutting rates last year. For the week, the S&P 500 advanced +1.7%. Taking a walk on the wild side, bitcoin reached a fresh all-time high at $109,340 and some interesting and bizarre meme coins also saw the light of day. (Hint: $$$MR. MARKET$$$ did not buy any of these).
The tech bros are rocking AI which always seems to be making headline news, even though no one really knows what AI is yet. Supposedly it will generate a significant surge in electricity consumption which will need some source of energy. At the World Economic Forum, amidst tariff threats on Chinese imports, there was also a special request to Saudi Arabia and other OPEC nations to lower oil prices. Not to be outdone, Canada, Colombia and Mexico were also invited to the tariff party. Oil coming from these countries will become more expensive if tariffs are applied. This has created much hub bub with swirling trade tensions between the U.S. and China. Investors flocked to the safe haven of gold and silver, driving up the price of those commodities too. The Tank Tiger hasn’t stored any gold recently, but we do have plenty of crude storage to show you. Brent crude futures settled at $79.76 a barrel, while WTI crude futures finished the week at $76.57 per barrel, a three-month high. Will oil prices move lower if we say “pretty please”? Don’t count your chickens.
