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

Dollar Continues to Weaken on Inflationary Worries

Markets continued to strengthen in overnight activity in the wake of Ben Bernanke’s words of assurance that the recession appears to be behind us. His assurance was later confirmed by legendary investor Warren Buffet. (hmmm)

The Dollar continues to weaken on inflationary worries with traders holding their breath in advance of this morning’s Consumer Price Index report. Currency and metals traders are still thinking about yesterday’s surprise surge in the Producer Price Index. Wall Street expects the Consumer Price Index (CPI) to clock in with a rise of .3% versus last month’s reading of 0%. Traders are whispering the rise might be higher than the estimate. Last on the Euro $1.4679 up 44/100ths of U.S cent.

As we look overseas we find Silver up another 40 cents at $17.30. Gold is $12.00 higher at $1016.00. Palladium is $296.00 up $6.00. Platinum is $10.00 higher and changing hands at $1335.00.

Over in the energy markets we find Oil trading flat to a shade lower in advance of today’s Weekly Inventories. The estimate calls for a decline of 3 million barrels, but traders are taking no chances given the recent surge in the price of Oil.

Over in the stock market the Dow ended yesterday with a gain of 56 points and appears to be headed for another opening gain of 46 points. Today’s economic calendar also contains the latest look at U.S. Industrial Production where stock traders expect to see a rise of .6% compared to last month’s rise of .5%. In world matters Chinese officials indicated that they are pushing for a quick negotiated solution to the tire trade spat with the U.S.

Today’s economic calendar:

U.S. Consumer Prices
U.S. Current Account
U.S. Industrial Production
EZ Consumer Prices
U.K. Employment

Traders Nervous in Advance of Bernanke’s Speech at 10AM

Metals are changing hands in a mixed and quiet fashion. Silver is 7 cents higher at $13.99. Gold is $943.005 up $1.25 per ounce. Palladium is $1.00 lower at $275.00. Platinum is down $3.00 and trading at $1239.00.

The lack of activity is being ascribed to nervousness in advance of today’s scheduled speech by Fed Chairman Bernanke at 10 am eastern. Expect Dollar volatility. The head of the Fed is expected to make remarks about the economy at the Annual Fed Symposium in Wyoming. Of greater concern should be whether Mr. Bernanke gets a second term, with President Obama to make that decision shortly. Early indications warn that a change at the helm of the Fed would cause a major stock market shake out.

Speaking of the stock market; the Dow ended Thursday with a 70 point gain and appears to be headed for another 40 point gain this morning with traders expecting to see a slight improvement in this morning’s release of Existing Home Sales. The latest estimate calls for a reading of 5 million units compared to June’s 4.89 million. Just another example of bad but better.

Meanwhile over in the energy markets the price of Oil continues to rise with electronic trading showing a gain of 76 cents to $73.74. Keep in mind the recent rise in the price of Oil is a two edged sword. Rising prices implies higher demand and greater economic activity, but rising prices also tend to divert consumer spending dollars which will ultimately hurt economic expansion.

In currency trading we find the Euro up 76/100ths of U.S cent in advance of the Bernanke speech; and in line with the weaker Dollar and higher oil. Last trade $1.4320.

In global matters; Iran has suddenly agreed to allow greater monitoring by U.N. inspectors of a uranium-enrichment facility, ending a long standing diplomatic impasse. You get the sense that Iran is trying to divert world attention from it’s current social unrest. In a final note; Cash for Clunkers will officially end next Monday.

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:

Oil’s Rise Pushes Dollar Lower Against the Euro

Better than expected U.S economic data, a surge in the Dow, and higher Oil helped to send the metals higher during today’s New York trading session.

Silver ended with a 33 cent gain at $14.25. Gold had a mid session surge but ended with a minimal gain of $2.00 at $956.00. Palladium and Platinum picked up as the automakers are reporting firm sales for the month of July. So far both Ford and GM have reported gains in the number of cars sold. Keep in mind there is the “Cash for Clunkers” effect. Still, Palladium gained $11.00 to $273.00. Platinum went up $15.00 ending the day at $1225.00.

Currency traders ignored today’s U.S economic data choosing instead to follow Oil. Today’s $2.37 rise in the price of Oil served to push the Dollar lower against the Euro. Last on the Euro $1.4405; up 1.49 U.S cents.

Today’s data helped to push the Dow up another 102 points at 9274. As for the data, Construction Spending actually grew by .3% compared to expectations of a .5% decline. Furthermore the ISM Manufacturing index clocked in at 48.9; well above the expectations of 46.5. As for tomorrow the calendar continues with a fresh look at Personal Income and Spending along with the latest Pending Home Sales for June.

Next Page »