Conflicting Beige Book Report

Stocks appear to be taking a breather this morning after yesterday’s 49 point gain in the Dow Jones Industrial Average. Traders are playing close to the vest after having had time to dissect yesterday’s Fed Beige Book where we got conflicting snippets like, retail sales are flat, loan demand continues to be weak, slight improvement in residential real estate, commercial real estate is weak, but overall economic activity seems to be stabilizing.

Traders are also standing pat in advance of this morning’s economic data where the Weekly Initial Jobless Claims are estimated to clock in at 560,000 versus last week’s 570,000. The July Balance of Trade is expected to show a deficit of $27.3 billion compared to June’s $27 billion. Given the recent precipitous decline in the value of our Dollar you might expect to see the next two reports show a significant easing in the deficit. Remember a weaker Dollar makes our exports more attractive to overseas buyers.

As for the Dow it appears to be headed for a 13 point lower open. The Euro eased to $1.4522 down a third of a U.S cent. Crude appears to be defying the stronger Dollar with traders awaiting today’s Weekly Oil Inventories where the latest estimate calls for a 1.8 million barrel decline in available Oil supplies, and a 1.5 million barrel drop in Gasoline. Last trade on Crude $71.68 up 37 cents.

As for the metals we find them flat to lower with Silver trading at $16.11 off 34 cents. Gold is $4.00 lower at $985.00. Palladium is $292.00 up $2.00. Platinum is off $5.00 and changing hands at $1279.00.

In other matters; President Obama laid out his new Health Care proposal in a one hour speech last night in front of the full Congress and the nation. While most agree that he did a masterful selling job; initial reaction shows no softening along party lines.

Today’s economic calendar:

BANK OF ENGLAND Rate Decision (volatile market event)
U.S. Initial Claims
U.S. Trade Balance
BANK OF CANADA Rate Decision (volatile market event)

U.S. Economic Data Disappoints Traders

As the New York market comes to a close we find the metals pretty much reflected a mixed picture in the Oil and Euro markets. The Euro is currently up 18/100ths of U.S cent in the aftermath of a disappointing ADP Payroll Report, and a weaker than expected ISM Services Index. Last on the Euro $1.4428 U.S.

The metals complex mixed and fairly lat. Silver ended with a 10 cent gain at $14.70. Gold eased by $1.00 closing at $964.00. Palladium gave up the morning gains finishing the day unchanged at $277.00. Platinum is trading at $1275.00.

Over in the energies the price of oil had a volatile trading day but is currently flat at $71.31 off 11 cents. Today’s indifference in Crude trading comes on the heels of Oil Inventories which clocked in right on target at up 1.7 million barrels.

Traders are also stepping to the sidelines keeping a wary eye on the Dow which seems to be exhausted. Stock traders expressed their disappointment over today’s U.S economic data with the Dow currently down by 61 points at 9268. The Dow had been down as much as 106 points shortly after today’s housing data hit the tape. Traders will begin making their final portfolio adjustments tomorrow as we get closer to Friday’s Labor Department release of our Non Farm Payrolls report. As for tomorrow the calendar contains one more labor related report before Friday’s main event: Traders will face the Initial Weekly Jobless Claims.

Thursday’s Volatile Market Events:

BANK OF ENGLAND Rate Decision
EUROPEAN CENTRAL BANK Rate Decision

Crude Recovers its Losses, USD Remains Weak

The metals ended the New York trading day higher. Silver rose 22 cents closing at $13.54. Gold was up $7.00 to $935.00. Palladium finished the day at $260.00 up $5.00. Platinum ended the day $4.00 higher at $1178.00.

The key to the turnaround was today’s reversal in Oil which all but recovered yesterday’s losses. Oil is presently up $3.55 per barrel at $66.90. It’s amazing how quickly negative news is acted upon, and then tossed aside.

Not surprisingly, the Dollar remained weak in light of the surge in Oil. Last on the Euro $1.4080 up 60/100ths of U.S cent. Stocks soared today even with a small uptick in the Weekly Jobless Claims. Traders point to bullish comments by Goldman Sachs regarding industrial giant GE for part of the rally and some better than expected corporate earnings this morning (but where did the corporate earnings come from?). Last on the Dow 9239 up 168 points.

At the end of trading today investors will begin thinking about tomorrow’s final wave of U.S economic data. Friday begins with a look at our overall economic growth when the 2nd Quarter Advance GDP hits the tape. This will be followed by Core PCE Inflation along with the latest regional manufacturing report.

Crude Rebounds, Foreign Currencies React

As the NY trading day opens, it would appear that the recent panic in the Oil markets may have run it’s course. Crude Oil is trading 89 cents higher in the electronic market at $64.24. By the close of trading yesterday oil wound up losing $3.88 per barrel on trading restriction worries and a 5.1 million barrel surge in the Oil supplies. This morning’s Oil rebound is causing a corresponding bounce in the Euro as well as a number of other foreign currencies.

Last on the Euro $1.4072 up 52/100ths of cent against our Dollar. Accordingly, the metals are trading on a firmer note. Silver gained 13 cents to $13.45. Gold is $6.00 higher at $934.00. Palladium jumped $6.00 to $261.00. Platinum edged up by $2.00 and is currently changing hands at $1175.00.

Traders in all markets will be keeping a wary eye on Oil for the balance of the week for directional guidance. On the domestic front the economic calendar is light today with only the Initial Weekly Jobless claims for traders to contend with. The estimate calls for a slight improvement in the number in first time claims for unemployment compared to last week. Look for 560,000 versus 575,000. Which is again, bad but better.

As for the stock market the Dow ended Wednesday with it’s second straight day of losses. The averages slipped another 26 points. This morning the Dow is being called to open 63 points higher; more than erasing the prior two-day loss. Corporate earnings will continue to dominate the news.

The economic calendar ends the week tomorrow with a barrage of data that includes an advance look at our Gross Domestic Product (GDP), Core PCE Inflation, and the Chicago Purchasing Managers Index of Manufacturing (PMI Manufacturing).