Weaker Oil, Stronger Dollar

Metals are beginning the new trading week on a lower note reflecting weaker Oil, stronger Dollar, and in reaction to talks of the International Monetary Fund (IMF) selling Gold. Talks of the IMF selling Gold occurs like clockwork every year.

Stock an metals traders are also standing on the sidelines in advance of today’s Leading Economic indicators report. With that said we find silver 30 cents lower at $16.73. Gold is $11.00 lower at $997.00 per ounce. Palladium remains unchanged at $299.00. Platinum is $1310.00 off $10.00.

Over in the currency markets the Euro slipped 53/100ths of U.S cent to $1.4662. Energy traders are facing lower Oil this morning with the last trade at $70.53 down $1.51 per barrel. Oil gained $2.75 for the whole of last week.

In the stock market the Dow is indicating a 44 point lower open after last week’s total gain of 214 points. Traders are once again showing signs of worry regarding the extent of the stock markets run up relative to the underlying economic fundamentals. The question looming is; are we getting ahead of ourselves? While today’s Leading Economic Indicators are pointing to a rise of .7% compared to the prior reading of up .6%, traders are not so sure that the next 6 months will continue to show economic improvement.

In world matters President Obama is signaling yet another military strategy shift. In a TV interview the President voiced skepticism that more troops in Afghanistan would make a difference. Up until now the military officials expected a rubber stamp endorsement for added troops by the administration.

Today’s economic calendar:

Canadian Retail Sales

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Fed Paints a Happy Face on US Economy

Yesterday the Fed gave the impression that economic activity is leveling out after it’s sharp and prolonged slide. Adding to the positive trading environment are reports out of Europe indicating the Eurozone economy is improving as well. It was reported that Germany and France are officially out of recession. As a result the metals rallied, the Euro climbed, and Oil surged.

The Euro jumped a little over a half cent against the Dollar with the last trade $1.4274. Crude Oil spiked on a presumed jump in future demand. Last trade on Oil $71.72 up $1.56 per barrel.

Over in Europe we find Silver up 23 cents at $14.75. Gold gained $4.00 to $954.00. Palladium jumped $9.00 to $282.00. Platinum is $1252 up $10.00 per ounce.

The Dow finished the Wednesday session up 120 points and appears to be headed for another 103 point rise this morning. The higher indications may temper somewhat as we approach the open.

We have two pieces of fresh economic data for traders to consider before the stock market opens. The Initial Weekly Jobless Claims are expected to show a slight improvement over last week with the latest estimate calling for 545,000 first time unemployment claims versus last week’s 550,000. Next comes Retail Sales for July where the picture is less bullish.

Wall Street expects to see a .7% rise is spending compared to June’s rise of .6%. That’s the good news. If however you strip out the impact of auto sales (Remember Cash for Clunkers is a temporary government subsidized bail out program) the rise in overall retail spending is up a mere .1% versus June’s rise of .3%.

Today’s economic calendar:

U.S. Initial Claims
U.S. Retail Sales
U.S. Import Prices
U.S. Business Inventories

Friday’s economic calendar:

U.S. Consumer Prices
U.S. Industrial Production
U.S. Consumer Sentiment
EZ Consumer Prices
EZ GDP
German GDP

Here’s an insightful video on why the cash for clunkers program hurts most those it was intended to help:

Fed Statement Later Today has Traders in Waiting…Again

The metals continued trading in a tight range during the overnight Asian and European sessions. Again today traders are virtually immobilized as they wait for today’s Fed interest rate announcement along with the accompanying statement before committing. What will the Fed say regarding their perception of the economy? This is what has traders in most markets anxious. We will know at 2:15 pm eastern today.

Currently we find Silver changing hands at $14.20 off 11 cents. Gold is $3.00 lower at $943.00. Palladium remains unchanged at $275.00. Platinum is $1235.00 off $9.00.

Forex

In the currency markets it’s the same thing with the Euro treading water at $1.4163 up 3/100ths of cent versus our Dollar. Crude Oil is also flat with traders waiting for today’s Weekly Oil Inventories along with the Fed announcement. The latest estimate calls for Oil supplies to show rise of 1.2 million barrels.

In stock trading the Dow ended Tuesday with a decline of 96 Dow points as traders made a final hour scamper to the sidelines in advance of today’s pearls of wisdom from the Fed.

Today’s calendar also contains the latest look at our Balance of Trade. The weakening Dollar continues to cut the disparity between our exports and imports. The weaker Dollar makes our products for export cheaper to buy. Look for imports to still exceed exports by $28.6 billion. The expected deficit is a shade higher than last month’s $26 billion.

In domestic matters; President Obama continues to push for his health care reform bill. On the geo-political front U.S missiles struck a suspected Taliban camp in Pakistan killing 14 militants. In Kuwait an al Qaeda linked group was arrested for planning an attack on a U.S military base there.

Today’s economic calendar:

U.S. Trade Balance
U.K. Employment

Tomorrow’s:

U.S. Initial Claims
U.S. Retail Sales
U.S. Import Prices
U.S. Business Inventories

Market Malaise Over Upcoming Fed Interest Rate Meeting

The metals closed the trading day on a lower note led by a weaker Euro and general market malaise. Stocks have been under water all day reflecting a renewed worry about banking giant State Street. The company reported that it’s $625 million sub-prime loss reserve may not be enough cover it’s needs. Remember; it doesn’t take much bad news for traders to forget the recent good news and to head for the sidelines again – and vice versa. Last on the Dow 913 down 50 points.

In the currency markets the Euro is presently down 76/100ths of cent versus our Greenback with traders beginning to express concern over this week’s Fed interest rate meeting scheduled for Wednesday.

Crude is taking it’s cue from stocks with Oil currently down 36 cents at $70.57. As for the metals; Silver finished the New York session down 30 cents at $14.38. Gold shed $13.00 to $944.00. Palladium eased $3.00 closing at $275.00. Platinum fell $25.00 to end at $1243.00. Volume was moderate.

Traders report the sudden “kiss and make up” attitude from North Korea may have bled a bit of the geo-political anxiety premium from prices today. Tomorrow the calendar resumes with a fresh look at U.S Productivity and the latest Wholesale Inventories.

Tuesday’s Economic Calendar:

U.S. Wholesale Trade
U.S. FOMC Meeting
and Rate Decision – Volatile Event
German Consumer Prices

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