Loading ...U.S. Economy: Growth Rate Falls Short of Forecasts - Bloomberg
Oil Falls More than $2 as Oil Demand Drops to 3-Year Low - Bloomberg
Rogers Sees Commodity Bull Market For Next Decade - DowJones
Doom and Gloom in Europe (video) - Reuters
For Stock Exchanges, a Tumble Along with the Markets - NYTimes
Juice Economy Again? It’s a Tough Call - CNNMoney.com
The Fed’s Rate Dilemma - CNNMoney.com
Is the Bottom Nearing for the U.S. Dollar?
By Phil Streible
The latest data on weekly unemployment claims and gross domestic product has pushed both the stock market and the U.S. dollar down, but I have a slight inclination to believe the dollar will see a rebound before year-end. A Federal Reserve policy meeting is coming up next week, and the market could be volatile. A straddle in the Dollar Index Futures would be a good strategy to play dollar volatility in either direction, or consider a call spread if you are bullish.
A straddle involves buying a call and put at same month and strike price. What you are looking for is increased volatility—you don’t have to pick a direction. If the Dollar Index Futures, traded at the ICE Futures Exchange, gets down to 72, that’s what I’d look at in terms of setting up a straddle.
Second-quarter GDP came out lower-than-expected at a 1.9 percent annualized rate, according the Commerce Department. First-quarter GDP was at 0.9 percent. The Commerce Department also reported a recession may have begun in the final three months of 2007, as GDP was revised downward to show a contraction of 0.2 percent. It marked the first drop since the recession of 2001.
A separate report from the Labor Department showed initial claims for unemployment insurance soared to the highest level in more than five years last week, rising by 44,000 to 448,000.
The stock market doesn’t like what it sees this morning, and futures are retreating after two days of gains. From a purely technical view, Lind Plus Senior Market Strategist Jeff Friedman says momentum readings, the stochastics and Relative Strength Index (RSI), remain neutral to slightly bullish, but a close above 1291 in the September S&P futures, the three-week high, would be needed to restore some confidence. A close below 1235 would open the door to further losses, possibly down to 1202.
“We may see a minor rally off these lows (today), but I think you have to sell any rally,” he said.
Crude Gains Over $4 as Gasoline Supplies Fall - MarketWatch
House Rejects Bill Aimed at Energy Speculators - MarketWatch
Fed Extends Emergency Loan Programs Through January - Bloomberg
Credit Market Far From Tossing Away its Crutches - Reuters
U.S. Economy to Underperform Through Mid-2009: IMF - Reuters
Trade Talks Broke Down Over Over Chinese Shift on Food - NYTimes
High Gas Prices Hurting Small Businesses - NYTimes
Gold futures took a bit tumble today, with the August COMEX contract closing down $13.60 at $902.90 an ounce, after hitting a one-month low intraday. The financial press cited a stronger U.S. dollar and equity market rally as reasons gold has lost some of its appeal today. Lind Plus Senior Market Strategist Dan Pavilonis gave his take on metals market action in a Dow Jones article by Allen Sykora.
Blake Robben, Senior Market Strategist with Lind Plus, believes that price declines in several commodity markets have provided buying opportunities for those that have been waiting to go long. Blake recently presented a webinar analyzing the stock market and commodity markets. You can read his commentary here: Stocks Still Bearish; Commodities Bullish.
Stay on top of the markets by registering for our weekly Markets on the Move webinars, every Monday at 3:30 p.m. CT.
The Winners & Losers from Cheaper Oil (Video)- Financial Times
Fed Debate Heats Up Over Inflation - Bloomberg
Free Trade is Economy’s Saving Grace - Investor’s Business Daily
The U.S.’s Strikingly Socialist Tendencies - Times of London
About the Next Fannie/Freddie Crisis - New York Sun
Oil Falls to 12-Week Low on Demand Worries - Reuters
Fed Likely on Hold for a While Unless Challenged - Reuters
U.S. Credit Crisis Hits the Wealthy - Financial Times
U.S. Consumer Confidence Ticks Up in July - MarketWatch
Home Prices Down 15.8% in Past Year, S&P Says - MarketWatch
Consider Corn Call Spread
After peaking at record highs about a month ago, corn has been under pressure. But as the growing season wears on and hotter weather is upon us, it seems a bounce is likely, and a bull call spread is way to play that trend with defined risk. (Read full article, including Phil’s options trading strategy for corn)
Four Big Banks to Kickstart Covered Bond Market - MarketWatch
Beijing Restrictions May Cut Gas Demand - Barron’s
Fuel Subsidies Overseas Take a Toll on U.S. - NYTimes
Economics Does Not Lie - City Journal
Is Your Bank Safe - BusinessWeek
Is Bailout Madness a Prosperity Killer (Video) - CNBC
Pessimists Are Basing Gloom on Old News - Times of London
How Much Further Will the Dollar Fall? - New York Sun
The SEC’s Naked Logic - Wall Street Journal
Oil Prices and Economic Fundamentals - Econbrowser
National Gas Prices Under $4 - MSNBC
IMF Says End of U.S. Housing Slump ‘Not Visible’ - Bloomberg
U.S. Borrowing to Rise to $171 Billion This Quarter - Bloomberg
Gold has fallen about 10 percent from its peak above $1,000 an ounce in March, but a number of market participants seem to think the yellow metal’s bullish days are not yet over. Lind Plus Senior Market Strategist Phil Streible notes that open interest in gold call spreads has been building, and there has been strong buying seen in 1000/1050 and 1000/1200 bull call spreads. The December 1000 options show 15,864 contracts in open interest (outstanding positions) while the 1050 strike shows 12,678 and the 1200 strike shows 29,932 contracts. “Keep an eye on that spread,” he says. There may be reason to remain bullish as the U.S. dollar hasn’t been able to sustain lasting gains, and gold remains appealing as an inflation hedge. See related Reuters article, “Gold Options Point to $1,200.”
December NYMEX gold futures were last trading near $935.20, while October was trading at $930.10 and August $925.20.
