Will We See $40 Oil?
Stock index futures declined for the third straight
session. After yesterday’s discovery of the empty chemical warheads,
the selling in stock futures accelerated today after several negative economic
reports. Stocks also took a hit after some less-than-positive comments about a
recovery in technology. The March S&P futures
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100 futures dropped 45 to 1019.50.
Once again, the dollar slid further into a three-year low against the euro
amid the growing geopolitical concerns and on today’s evidence of a slowing
economic recovery. The dollar also declined on news that the trade deficit
swelled to a record $40.1 billion in November. Consumer confidence fell
unexpectedly to 83.7 from 86.7 in December. Economists were expecting a rise to
87.0. Industrial production for December fell 0.2% vs. expectations for a 0.2%
rise. Capacity utilization for December also came in below expectations at 75.4%
versus 75.6% in November. Capacity utilization is also at a nine-month low.
The March Dollar index
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100.89. March Euro
futures
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Treasuries prices jumped today as stocks took a beating. Bonds were boosted
after the trio of negative economic reports and the escalating war tensions had
investors looking for a safe haven to put their money. The
March 10-year contract
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to 113 25/32 while the March 30-year contract gained 21/32 to 111 2/32.
Crude oil continued its rise today amid the ongoing Venezuelan oil strike and
on increasing fears that a war with Iraq will further hurt crude supplies.
February crude
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a barrel. Crude traded as high as 34 today. Earlier this week, OPEC had agreed
to increase worldwide production by 1.5 million barrels a day. However,
transportations delays and a war with Iraq could put a further squeeze on oil
prices.
February gold
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after gaining $7/ounce yesterday.