AMD Weighing….
INTEREST RATES
OVERNIGHT
CHANGE to 4:15 AM:
BONDS +7
— This
morning a number of banks are citing non-performing loans as the source of lower
earnings and that is creating concern for the recovery. Now that the bond market
has weathered the residual of a day without economic reports, we should see
prices recover. In fact, if one listened closely to the Fed speeches Wednesday,
it was clear that they are raising their concern toward the economy.
STOCK INDICES
OVERNIGHT
CHANGE to 4:15 AM:
S&P
-180,
NIKKEI -112, FTSE -6.4 — The positives that dominated the trade two days ago are
mostly lost. On Tuesday, the trade thought that war with
might be avoided, that interest rates might be cut and that the
corporate credibility problems were behind the market. Now, however, it would
seem that a number of banks are lowering earnings due to bad loans to the
communication sector, the
is now even closer to attacking
and it would now appear that the SEC IPO investigation is expanding.
FOREIGN EXCHANGE
DOLLAR: The short honeymoon
for the dollar is over as the war talk is back on and the
stock market looks set to go in the tank over the next 48 hours. The Fed and
business leaders are floating enough negative economic dialogue that those not
negative are sure to become negative. The dollar used the temporary corrective
bounce in the stock market and a lull in the economic report cycle to forge a
bounce, but now the trade should be back to facing reality. The slate of news
today should easily pull the dollar back down to support of 106.86 and could
possibly set the dollar up for a slide all the way down to
consolidation support of 106.28 following the news Friday.
EURO: In
the near term, it is not what comes from the euro zone that affects the euro, but
what comes from the
that affects the euro. In other words, the currency showing the least negative
news over the next 48 hours wins. In the meantime, traders should buy the
December euro on a break to 98.50 looking for an upside breakout and a retest
of the 98.84 level.
YEN: The
Nikkei made a 19-year low overnight and the fuel for a panic is
everywhere. Certainly, the
port strike hurts
but the ongoing slide in the
economy is even more damaging. Add to the economic woes the fact that the long-awaited
bad loan plan is expected to feed deflation and a very ugly situation is
possible in
It is no surprise that the two economies most closely tied to the
economy (
and
are seeing their currencies under pressure. A return to the recent lows of 80.82
is seen ahead.
SWISS:
The recent correction primes the Swiss for a strong recovery. The flight-to-quality issues that left the market and caused the Swiss to
slide appear to be
returning and that should at least result in an upside breakout above resistance
of 68.14 and could mean a rise all the way to 68.63 by the close Friday.
POUND:
Against the extremely weak backdrop of US economic numbers, the
has posted a net increase in its September Services PMI. While the gain wasn’t
that impressive, it was positive and that should be where money flows. In
addition, if the US dollar is undermined by its reports today, that could give
the pound upside momentum. A new contract high is very possible in the coming
sessions.
CANADIAN:
As the
economy goes, so go the Canadian and Japanese economies! Therefore, the
Canadian might be set up for a sharp decline to 62.49 and maybe lower. If the
short-term technicals in the Canadian weren’t so
oversold we would be a seller on the open this morning.
METALS
OVERNIGHT CHANGE to 4:15 AM: GLD
+1.60, SLV +1.5, PLAT
+2.00; London Gold Fix $322.70, +$2.30; LME Copper
Warehouse
stks
87,500 tns, -1,000 tns;
Comex
Gold stocks 1.892, Unchanged; COMEX Silver stocks 107.4 ml oz, Unchanged. OVERNIGHT:
Gold prices back up off ideas that US leadership agrees on war plan
GOLD: The
gold market is back up today as the factors supporting the bull market return.
Two days ago gold was confronted with a rising stock market and talk that
had agreed to UN weapons inspections. Now, however, we are seeing the stock
market give back almost all of the week’s gains and the US Congress is close to
passing legislation that gives the President authority to attack
SILVER:
The gold market reversal today probably mitigates weakness in silver. Short-term
technical indicators in silver suggest that more downside is needed before a
solid bottom is formed. We continue to think that long-term buys around $4.45
are an outstanding value, but the economy will truly have to recover in order for
silver to sustain a rise.
PLATINUM:
We are never sure what focus the platinum market will assume considering the
back and forth action in the stock market. We do have to think that January
platinum is a little vulnerable to a corrective break to $550.
COPPER:
The ebb and flow of positive and negative sentiment continues with the upcoming
session seeing a return of the negatives. Early in the week there was hope that
a war would be avoided but not it would appear that the US is close to a
leadership consensus giving the President the capacity to attack Iraq. The
London market sees the news this morning as a negative specifically the Iraqi
situation.
CRUDE COMPLEX
OVERNIGHT
CHG to 4:15 AM: CRUDE +18, HEAT
+74, UNGA +89 — The bulls have to be
disappointed with the price action Wednesday as the combination of a massive
decline in US crude stocks, increased intensity of the hurricane and the US
moving closer to war, had almost no impact on energy prices. Maybe the market
took the President’s suggestion that the
would work with other nations in dealing with
as a sign that a non-military solution would be attempted.
NATURAL GAS
With the
failure to see Lili become a category 4
hurricane as it comes on shore this morning, prices
are set to fade aggressively. The early indications are that November natural
gas is down 197 points and that is proof of the declining storm threat.