Friday looks to be a quiet session, a reminder of the shortened holiday weeks ahead.
11/20/2009
Weak results from Dell pushed stocks lower in quiet trading. The S&P fell 0.3 percent to 1,091. Oil slipped 50 cents to $77 but gasoline prices rose on news that Valero is permanently closing a Delaware refinery due to losses and high costs. Gold inched $2 higher and has now posted a gain in 14 of the last 17 sessions. The dollar firmed slightly to end at $1.4866 against the euro.
11/20/2009
Weak results from Dell pushed stocks lower in quiet trading. The S&P fell 0.3 percent to 1,091. Oil slipped 50 cents to $77 but gasoline prices rose on news that Valero is permanently closing a Delaware refinery due to losses and high costs. Gold inched $2 higher and has now posted a gain in 14 of the last 17 sessions. The dollar firmed slightly to end at $1.4866 against the euro.
11/19/2009
The session's economic data were definitely upbeat, unlike the markets where profit taking pushed the S&P down 1.3% to a sub-1,100 level of 1,094. Jobless claims held on track and point to net hirings ahead. The index of leading economic indicators, boosted by low short-term interest rates, is pointing to mild economic growth through the first half of next year. For November, the Philadelphia Fed's manufacturing report is pointing to growth compared to October. The dollar firmed slightly, ending at $1.4900 against the euro and at 75.29 for the dollar index. Trading was quiet for once in gold which ended at $1,145. Oil slipped to $77.50 but is still narrowly rangebound between $75 and $80.
11/18/2009
Stocks ended little changed at 1,109 on the S&P. Deep drops in housing starts & permits led the day's economic news, raising concern whether momentum in the housing sector can be maintained. The government extension of buyer credits isn't yet boosting demand for mortgage purchase applications which fell to a new low. The dollar, at $1.4950 against the euro, gave back some of yesterday's gains but still ended above support at $1.5000. Gold ended at $1,144 with traders, impressed by its run, uncertain whether profit-taking is overdue. Oil ended at $79.50.
11/17/2009
Markets were little changed Tuesday despite weak indications on the manufacturing sector. The manufacturing component of the industrial production report, down 0.1 percent, ended a pivotal three-month run of gains. Core producer prices plunged 0.6 percent skewed by a downdraft in vehicle prices which however ultimately reflects weakness in demand.
The S&P was fractionally higher at $1,110. The dollar regained some of its recent losses, up 0.5 percent on the dollar index to 75.29. But the rise in the dollar didn't hurt demand for gold which held steady at $1,140. Oil held steady at $79.50.
11/16/2009
The S&P jumped 1.6 to a 2009 best of 1,109, getting a big boost from a mostly strong retail sales report for October, one helped by a swing in car sales but underpinned by another solid rise for the ex-auto ex-gas core reading. The dollar swung wildly through the afternoon, breaking under $1.5000 against the euro before breaking back in choppy reaction to Ben Bernanke's afternoon comments in which he cited the importance of dollar strength but also confirmed the outlook for low interest rates. The dollar ended at $1.4975 against the euro. The weakness in the dollar has been a major factor behind the gains in gold. Gold ended at new record high at $1,140. Copper is at a 2009 high of $3.10 as is silver, at $18.38. Demand for energy commodities isn't responding to dollar weakness as are the metals, at least not so far this month. Oil ended in range at $79.
11/13/2009
A rise in exports, helped by the declining dollar, and strong earnings from a run of companies led by Disney pushed the S&P 0.6 percent higher to 1,093. On the negative side was an unwanted decline in the Reuters/University of Michigan consumer sentiment report. The dollar index fell 2 percent on the week to end at 75.25. The decline in the dollar remains a central factor behind the jump in gold which ended the week over $1,100 at $1,118.
11/12/2009
Improvement in initial jobless claims is a bright spot for the outlook, extending a run of week-to-week declines that points to improvement in monthly payroll data. The dollar regained some of its recent losses while equities gave back some of their recent gains. The dollar index ended at 75.68 with the S&P at 1,087. Gold made new highs in overnight trade over $1,020 but ended U.S. trade at $1,108. Large builds in weekly inventory data pushed energy down with oil losing more than $1 to $76.50.
11/11/2009
Stocks inched forward in quiet Veterans Day trading. Oil was little changed at just over $79 while gold was little changed at just over $1,100. The dollar index ended fractionally higher.
11/10/2009
Markets were quiet in a session lacking news and ahead of Wednesday's Veterans Day holiday. The S&P ended little changed at 1,093 as the dollar also ended little changed, at 75.05 on the dollar index. The Oil ended at $79 as Tropical Storm Ida dissipates. Gold ended just over $1,100.
11/9/2009
New 2009 lows for the dollar made for a new rally in stocks where the memory of Friday's disappointing jobs report has apparently faded. The dollar index fell 0.8 percent to 75.04 after the G-20 said global stimulus measures will be kept in place. Rock-bottom interest rates in the U.S. point to continued selling of dollars and dollar assets in favor of higher returns in Europe and Asia. Low rates, along with still low inflation, are key factors supporting stocks where the S&P, which tipped above 1,100 in mid-October trade, ended near those highs, up 2.2 percent at 1,093. Gold, the only major asset class to make record highs this year, closed above $1,100 at $1,104 as investors seek protection against inflation and dollar weakness. Oil ended at $79.25.
11/6/2009
The jobs report was saved by upward revisions to prior months, else the markets would have been in for a slide. Payroll losses remain severe, at 190,000 in October, but still a little less severe than prior months. But not the unemployment rate which jumped into double digits at 10.2 percent. Manufacturing, construction and retail all showed declines. The jobs report hasn't been offering bulls much of anything at all.
Still, it could have been worse. The S&P rose 0.3 percent to end at 1,069 as the bulls held onto optimism. Federate Investors upped its equity allocation, saying economic growth (if not the labor market) is improving and that the S&P has corrected a steep 7 percent the past two weeks. Gold surged briefly just over $1,100 to end $5 higher at $1,095. Oil ended in range at $75.75 while the dollar index also ended at 75.75, little changed on the day.
11/5/2009
Chain stores posted strong sales in October, which together with strong auto sales posted on Tuesday, point to a surprising gain for the month's retail sales report. Productivity posted a surprising surge in the third quarter, up an annualized 9.5 percent while unit labor costs plunged 5.2 percent. The results confirm that businesses, instead of hiring, are working their existing workforces harder. But businesses at least aren't laying off as many as they had been as initial jobless claims, though high, continue to decrease, pointing to an easing in payroll losses for tomorrow's big employment report.
The data, along with strong results and an upbeat forecast from router maker Cisco, pulled stocks sharply higher with the S&P up 1.9% at 1,066. The dollar was little changed as were commodities. Gold never made a move at $1,100, closing at $1,090 in a very narrow session.
11/4/2009
There's no sign of an exit strategy. The FOMC is keeping rates low for as far as anyone can see, a statement that torpedoed the dollar in late trade. Rates will stay low even though the statement is a little bit more optimistic on the economy. The ISM's non-manufacturing supports that optimism, showing actual month-to-month gains for the bulk of the economy for a second straight month. And in a key highlight, new orders accelerated sharply for a second month. Company news after the close adds further to optimism as router maker Cisco, in timely data on its October quarter, beat both earnings and sales estimates in what is likely to give a boost to Asian stock markets.
The dollar index ended at its lows, down 0.9 percent at 75.71. The FOMC statement isn't likely to scare off many dollar shorts in overnight trade. The S&P had been in the plus column but slid off highs following the statement to end fractionally higher at 1,046. Gold made a run at $1,100, getting over $1,097 before settling back at $1,092. Oil gained 50 cents to $80, helped by draws in weekly inventory data that show a sizable decline in imports.
11/3/2009
News that India has bought 200 metric tonnes of gold from the International Monetary Fund bolstered confidence in central bank demand for the metal despite the high price. And the price is getting higher, nearly $1,085 at the day's peak for a more than $40 jump. The talk is a test of $1,100 but the extent of the day's move may trigger heavy correction in the days ahead. The news didn't move other commodities with base metals ending lower on dollar strength though oil did gain more than $1 to end at $79.50.
The railroad sector, which last week issued warnings that freight traffic is weak, made more news Tuesday. Warren Buffett, through Berkshire Hathaway, is buying Burlington Northern, the nation's second-largest railroad, for $34 billion. The news gave a little lift to stocks with the S&P gaining 0.2 percent to end at 1,045. But commentary in the stock market is turning defensive as bulls, disappointed by a so-so earnings season, justify their outlook citing low interest rates, low inflation, and abundant liquidity. Kraft is the latest company with mixed results, posting strong profits after the close but a dip in sales. Sales strength was supposed to the theme of the earnings season but instead the theme is once again cost-cutting.
11/2/2009
All three economic reports showed much better-than-expected headlines Monday, headlines that in all cases were offset by the details of the report. The ISM's manufacturing index jumped more than 3 points to 55.7, a level however that the ISM is warning may prove to be the highest reading for quite a while. The reason is that the key new orders component slowed for a second straight month, pointing to less strength for general activity in the months ahead. Construction spending jumped 0.8 percent vs. expectations for a small decline, but the gain is tied to a major downward revision to the prior month. Finally pending home sales shot past expectations with a 6.1 percent jump. But pending home sales have not led to similar increases in underlying sales of existing homes. Why? Appraisals have been brutal and have been scuttling the final deals.
Stocks went up and down on the day, jumping on the headlines then sinking back on the details. But the S&P did end higher, gaining 0.7 percent to 1,042. The dollar was also all over the place, ending 0.2 percent lower on the dollar index at 76.22. Commodities likewise see-sawed before ending little changed at $78 for oil and at $1,040 for gold.
10/30/2009
Weak personal income & spending data weren't a surprise but they didn't boost anybody's sentiment. Consumer sentiment also wasn't a surprise, weak but it could have been worse. But the markets went into reverse in part in a give-back from yesterday's strong gains and in part on fiscal year-end tax-loss selling by many investment firms. The S&P fell 2.8 percent to end at 1,036, a steep loss but not enough to keep Federated Securities from repeating its call that the S&P, thanks to inventory rebuilding, strong corporate profits, and the possibility of a strong holiday shopping season, will close the year above 1,200. The dollar gained strongly on the day with the dollar index up 0.5 percent to 76.33. Oil fell back to end at $77 with gold holding firm at $1,045.
10/29/2009
Investor demand for return shot higher Thursday in reaction to a stronger-than-expected 3.5 percent growth rate for third-quarter GDP, a punctuation for the end of the recession. Thanks to cash for clunkers, the results included a gain in personal consumption, and thanks in part to first-time home-buyer credits, residential investment showed its first gain in more than three years. Other data included a mixed report on jobless claims as the labor market remains the key area of the economy that has yet to show actual gains.
Stocks recovered two days of losses with the S&P up 2.3 percent to 1,066. Earnings were very heavy but were mixed with Motorola beating estimates and Exxon Mobil missing. Oil moved back to $80 with gold back at $1,045, both levels widely cited as key pivots. The dollar gave back two days of gains with the dollar index down 0.6 percent at 75.99.
10/28/2009
Disappointment for new home sales set back the outlook for housing even though new home prices finally showed some strength. The manufacturing sector is definitely showing strength though even more strength was expected from the durable goods report. The results pushed stocks lower once again with the S&P falling a sizable 2.0 percent to 1,042. Commodities also fell back with oil ending at $77.25 and gold at $1,027, raising questions whether $82 and $1,070 will prove the year's highs. The move away from risk made for continued gains in the dollar with the dollar index rising 0.5 percent to 76.49.
10/27/2009
Thursday's third-quarter GDP report may make positive headlines but it probably won't do much to boost consumer morale. The Conference Board says consumers aren't paying attention to inventory restocking and aren't putting too much weight in one-time stimulus efforts. Instead they're worried about their jobs. The Conference Board's consumer confidence report moved decidedly backwards this month as more, the most since 1983, say jobs are currently hard to get. The news weighed on the stock market where the S&P continues to drift backward, down 0.3 percent on the day to end at 1,063. In good news, the dollar index firmed for a second day, up 0.2 percent at 76.20.
10/26/2009
Stocks and commodities retreated while the dollar firmed in what traders, at a loss for an explanation, called a technical session. Traders say everyone has ended up clumped on one side of the market, that is long stocks and commodities and short the dollar. With everyone fully invested on one side, there's no available funds to offset shifts in trend. The S&P fell 1.2 percent to end at 1,066 while oil fell below $80 to end at $78.75. A drop in gold to a $1,038 close is being described as significant, pointing to further losses toward $1,020. The dollar index jumped 0.7 percent to 75.99 after the dollar found support at $1.5000 against the euro, ending at $1.4850. Despite the losses in stocks and commodities, money moved out of the safety of Treasuries during what is another massive week of issuance.
10/23/2009
Strong earnings from Microsoft and Amazon weren't enough to help the stock market which instead focused on negative news from two of the nation's railroads. Union Pacific and Burlington Northern warned that freight demand, whether consumer or industrial, is still weak. The Dow Transports, often considered a leading indicator for the Dow Industrials, fell very sharply, down 3.5 percent. The Dow Industrials fell 1.1 percent and dipped back below 10,000 to end at 9,972.
A huge jump in existing home sales did very little for the stock market. The jump is tied to government stimulus in the sector, namely first-time buyer credits, but the report also showed further declines in home prices, a big negative that hurts the consumer. The dollar benefited from a big slide in the pound following a surprise drop in U.K. GDP. The dollar index rose 0.5 percent ending at 75.50. But the dollar is still just below the key $1.5000 level against the euro. Oil backed down slightly to end at $80 with gold very steady at $1,055.
10/22/2009
Earnings were mostly positive Thursday, led by 3M and McDonald's and including two from the financial sector: PNC and Travelers. After-the-close earnings were especially strong including big surprises from credit-card issuer Capital One and good results from both American Express and Amazon. Economic news was mixed as a gain for the index of leading economic indicators, a gain skewed by its heavy weighting on the yield curve, was offset by a slight rise in initial jobless claims. The dollar gained back some of yesterday's steep loss, up 0.2 percent on the dollar index to 75.14. Commodities were little changed, holding onto yesterday's big rallies in oil and base metals.
10/21/2009
Deepening weakness in the dollar is heightening talk that policy makers are pursuing a deliberate, thinly masked devaluation policy to raise inflation in a move to monetize the government's debt. This talk has been going on all year in the commodities markets but is now appearing in broader research including today from Morgan Stanley which says there is "the possibility that central banks might want to engineer controlled inflation to reduce the public debt burden." Until an exit strategy is announced, traders are saying that foreign investors will seek to protect themselves with non-dollar assets and that the markets will taunt the Fed by selling dollars and buying commodities.
The dollar index fell a steep 0.7 percent to 74.99 with the dollar testing the key $1.5000 level against the euro, a break of which may, according to traders, trigger intervention from the ECB. Oil hit new 2009 highs, rising $1-1/2 to end at $81 with copper and zinc also hitting 2009 highs. Gold led commodity gains earlier in the month and, pressured by profit-taking, was unable to make much ground, ending only $5 higher at $1,060. Earnings news was mixed, headed by a huge loss at Boeing which continues to suffer from costs associated with prior production delays. Charles Schwab, citing the drag from the dollar, is recommending that U.S. investors seek companies in sectors with broad international exposure including technology, materials, industrials, and energy. The S&P fell 0.9 percent to 1,081.
10/20/2009
A soft housing starts report that included a decline in permits sent the S&P down 0.6 percent to 1,091, offsetting a run of strong earnings reports led Tuesday by heavy equipment maker Caterpillar. The dollar index firmed slightly to 75.52. Commodities were little changed with oil ending at $78.50 and gold at $1,056. Money moved into Treasuries where the 10-year yield fell 5 basis points to 3.34 percent.