Wow! What a difference a few hours makes. At the beginning of trading today stocks and commodities were steady. Then as the morning wore on, the US dollar strengthened and it all broke loose. Let's look at the numbers: (as of 1:29 EDT)
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December euro is at 1.4866, down .0134
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The December S & P contract is down 10.60 at 1066.30
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December crude oil is at $78.40 per barrel, down $2.10
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December 30 year bond is at 118.10, down 23.
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December wheat is at 530.6 down 17 cents (each penny equals $50.00)
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December gold is at $1043.40 per ounce, down $13.00 (each $1.00 equals $100.00)
In past weeks when we've seen these sharp sell offs, the markets jumped back rather smartly in a couple of days. We do know that there were heavy shorts in the US dollar and this may be just short covering. Yet, over in Europe, the German economy is weak and was a factor in the euro's sell off.
It will probably will take the rest of the week to see if the selling persists, or if this just temporary profit taking. In any case, the good news is that the US dollar is rising, keeping pressure on commodity prices, especially oil. The price of gas has risen about 18 cents in the past two weeks and oil traded well above $81.00 per barrel.
The markets often take a breather. Do you believe that this is the start of a bigger decline?
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Reader Comments (Page 1 of 1)
11-04-2009 @ 5:12PM
william lindblad said...
And the Euro hit 150 before the rally.
Have you noticed the amount of emphasis that is now being placed on the currency trading arena? It looks like the new gold rush to this lad and there has been earth shaking events in this area in the past - namely fraud. Again -nobody watching the store.
As you say - what do you think?
I think it is a lit fuse on a pile of TNT.