Crude Rises on the Dollar’s Decline

The metals closed the New York trading day only marginally higher after Gold was unable to hold the magic $1000 level.v Despite the sharply higher Euro and a $3.00 jump in the price of Oil; the metals finished the day only a shade higher and well below the session highs.

Silver closed up 8 cents at $16.42. Gold finished at $997.00 up $1.10 per ounce. Palladium slipped $3.00 to $292.00. Platinum rose by $16.00 to $1280.00. Volume was moderate.

Over in the currencies the Dollar continued to weaken on fears of Chinese Dollar liquidations and growing concerns of U.S inflation. Last on the Euro $1.4504 up 1.69 cents against our Greenback.

Crude rose on the back of the weak Dollar gaining $3.38 per barrel to $71.40. Remember tomorrow’s OPEC meeting. Stocks are also well off the session highs with the Dow Jones industrial Average currently sitting at 9469 up only 27 points.

When we return tomorrow traders will have two fresh pieces of data to contend with. We get the Weekly Oil Inventories and the latest Fed Beige Book. The Beige Book; named for the color of it’s cover is an anecdotal compilation of business conditions in the 12 Federal Reserve Bank districts.

Tomorrow’s economic calendar:

RESERVE BANK OF NEW ZEALAND Rate Decision
OPEC Meeting
Weekly Oil Inventories
U.S. Fed Beige Book

Will PMI Break 50? Traders Waiting to See

In the currency market, last on the Euro $1.4274 down 76/100ths of a U.S cent. The Dollar is trading on a firm note with Wall Street expecting to see further improvement in the manufacturing sector this morning. The Chicago Purchasing Manager’s Index of Manufacturing (PMI) is expected to clock in with a reading of 47.2, up again from the prior month’s 43.4. Some traders think we might actually break the 50 level. A reading of 50 or higher represents expansion in manufacturing sector. This would be a very positive economic signal.

Metals are trading flat to lower this morning after last Friday’s sharp gains. Traders are pointing to a 6% decline in Chinese stocks; and a bounce in the U.S Dollar for this morning’s lower levels. Silver is down 10 cents at $14.65. Gold is $3.00 lower and trading at $954.00. Palladium remains $1.00 higher with the last trade at $287.00. Platinum is $1234.00 down $11.00.

Over in the energy markets the price of Crude is down $1.66 per barrel on nervousness surrounding severe Chinese stock market losses. Last on Oil $71.08. U.S stocks finished last Friday with a 36 point loss snapping an 8 or 9 day run of positive closes. On an overall basis the Dow gained 38 points for the whole of last week. This morning the index is being called to open 62 points lower in sympathy with Asian and European markets.

On the geo-political front; Japanese voters ushered in a new era in Japanese politics with a sound thrashing of it’s Liberal Democratic Party at the polls. Voters have decided to turn to new leadership after 50 years of business as usual.

Today’s economic calendar:

U.S. Chicago PMI
U.K. Markets Closed

Consumer Confidence in Third Month of Decline

Metals closed the final New York trading day of the week higher. The metals continued to react positively to a lower Dollar sending Silver up 54 cents to $14.75. Gold surged $11.00 to a closing price of $957.00. Palladium ended the day and week at $286.00 up$4.00. Platinum gained $1.00 closing at $1238.00. Trading volume was light to moderate.

The Euro maintained most of it’s early session gains after the Michigan Sentiment Index of Consumer Confidence clocked in at 65. While the number was 1 point higher than the estimate; traders took a broader view pointing to the fact that index has declined for three straight months running. The Euro is 83/100ths of cent higher versus our Dollar at $1.4350. This change represents the price difference from yesterday’s wrap up level through today’s wrap up.

Stocks also turned lower in face of the Sentiment numbers supporting our theory of positive economic data addiction. The Dow is currently down about 47 points having been down almost 80 at the session lows.

Meanwhile the price of Crude was like a roller coaster throughout the day but is presently up 44 cents at $72.93. When we return on Monday traders will get a fresh look at manufacturing when the Chicago Purchasing Managers Index of Manufacturing (PMI) hits the tape.

Monday’s economic calendar:

U.S. Chicago PMI
U.K. Markets Closed

Markets Lifeless as Traders Await Today’s GDP Reading

Markets are trading or expected to open flat this morning with traders expressing nervousness over the pending 2nd Quarter release of our Gross Domestic Product (GDP). Despite all the optimism having been thrown about in the wake of recent economic data; traders will face the stark reality of what it all means when the GDP gets released this morning. GDP is the sum total of all goods and services produced in our country. In other words it’s the bottom line result of all our economic data.

The current estimate calls for a preliminary 2nd Quarter reading of -1.5%. This is an unfavorable comparison to the first quarter where our economic contraction was only 1%. If correct it will have traders scratching their heads.

Today’s other report of significance will be this week’s Initial Jobless Claims. Wall Street expects to see a number of 565,000 versus last week’s 576,000. Core PCE Inflation is expected to have remained unchanged at 2%.

As for the markets; Silver remains unchanged at $14.25. Gold is $2.00 higher at $947.00. Palladium is $283.00 up $1.00. Platinum is flat at $1235.00.

Our day to day barometers are mixed and quiet. Crude is 52 cents per barrel lower at 70.92. The Euro is 28/100ths of U.S. cent higher at $1.4258. Over in the equities market the Dow finished the Wednesday trading day with a 4 point gain. This morning the index is being called to open 2 points lower.

On the geo-political front it appears the predicted public uproar surrounding the planned visit to New Jersey by Libya’s Moammar Gadhafi has already started according to a front page article in today’s Wall Street Journal. It’s sort of reminiscent of Iran’s Ahmadinejad visiting New York City.

Trading Fears Mount as Federal Deficit Expected to Top $9 Trillion by 2020

In the stock market the Dow ended yesterday with a 30 point gain, but looks about 18 points lower at the open. Traders are beginning to express concern about our mounting federal deficit. According to the Office of Management and Budget (OMB) the deficit is expected to swell by $9 trillion over the next decade. That’s an incredibly large number to try to recover.

Metals are trading flat to a shade higher over in late morning European action. Silver is unchanged at $14.29. Gold is $3.00 higher and changing hands at $947.00. Palladium is $288.00 having edged up $2.00 since yesterday’s close. Platinum is down $8.00 and trading at $1234.00 per ounce.

Background barometers are flat to lower with Crude Oil quiet at $72.07. Oil ended sharply lower yesterday as technical selling pushed prices down by $2.32 per barrel. Crude is currently up 2 cents with traders looking to see a 2.7 million barrel decline when today’s Weekly Oil Inventories get reported.

Over in the currency markets the Euro is trading a quarter of a U.S cent lower in advance of today’s U.S. economic data. Both of today’s reports are expected to show improvement. July Durable Goods are expected to show a rise of 3.2% compared to June’s decline of 2.5%. That’s a pretty good jump. Durable Goods are the more expensive items we purchase. They tend to have useful lives of 3 or more years (i.e. appliances, furniture, and vehicles). Being expensive; they tend to be more sensitive to consumer confidence and budgetary constraints. New Home Sales for July are also expected to show a slight improvement with the latest estimate sitting at 390,000 versus last month’s 384,000. The numbers continue to be weak, but they are moving in the right direction. Last on the Euro $1.4290.

On the geo-political front Lybia’s leader Muammr Qaddafi plans to visit the U.S. and stay in his diplomatic mansion in New Jersey. New Jersey is home for a number of families which lost loved ones in the Pan Am Lockerbie bombing. Sometimes you have to scratch your head and wonder. I can only imagine what the press will do with this story once Qaddafii shows up. In a final note, political icon Senator Ted Kennedy has passed away at age 77 from brain cancer.

Next Page »