Weak Economic Data Overshadowed Again

Today’s weaker than expected economic data was overshadowed by another successful treasury bond auction. The one two punch served to keep the Dollar depressed and the metals firmly higher. In the currency markets the Euro rose 78/100ths of U.S cent on the data and solid auction result.

Silver finished the New York trading day up 37 cents at $14.89. Gold gave up a part of the early session rise closing at $954.00 up $4.00. Palladium edged up $2.00 to end at $275.00. Platinum closed at $1259.00 up $17.00. Volume was moderate.

A little explanation is in order. As long as the government continues to be able to sell treasury bonds, notes, and bills without having to raise yields; the Dollar should remain subdued. The concern is what happens when the Federal Reserve ends it’s treasury purchase program?

As for today’s economic data the Weekly Jobless Claims rose 4,000 from last weeks revised 554,000. Not a good sign. Retail Sales also disappointed clocking in with a decline of .1%. If you strip out the effect of our temporary pumped auto sales the decline was .6%. These numbers are far worse than the Street expected.

The Dow rolled over giving up early session gains and went negative by 40 points. Today’s saving grace was the solid demand for our freshly auctioned treasury bonds. The Dow has since recovered and is presently up 5 points on the day at this writing.

Over in the energy markets the Price of Oil remains higher, but well off the session highs. Last on Crude $71.12 up 96 cents per barrel. We end the week tomorrow with a flurry of additional data including the Consumer Price Index, Industrial Production, and the Preliminary University of Michigan Sentiment index of Consumer Confidence. I’ll be back with the latest estimates tomorrow morning.

Tomorrow’s economic calendar:

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

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:

Late Afternoon Pre-Fed bounce in the Euro

With about a half hour to go before the Fed releases it’s data; the metals ended the New York session on a firm note.

The Euro gained 62/100ths of cent versus our Greenback with currency traders front running their expectations of what the Fed will say. The Euro got a little extra support when the U.S.Trade Deficit expanded by $1 billion from the prior month.

Traders took their cue from a surge in Oil and a late afternoon pre-Fed bounce in the Euro. Silver ended the session at $14.56 up 22 cents. Gold gained $4.00 to $950.00. Palladium and Platinum remained slightly down,losing $7.00 per ounce for a close of $1235.00 and $2.00 for Palladium and a close of $273.00. Volume was moderate.

Crude Oil jumped by $1.24 per barrel on the Dollar’s weakness along with a powerful surge in the Dow. The rise in Oil comes despite today’s higher than expected inventories. Last on Crude $70.69.

In the stock market the Dow is presently up 134 points with traders pointing to the warm reception on today’s treasury debt auctions. Other traders are buying in advance of expected optimism on the part of the Fed. More in the AM