The OPEC Factor
Stock index futures got off to a good start this week on news of positive
economic data. Following last week’s better than expected Chicago PMI number,
the ISM Manufacturing index for January came in just a tad lower than expected,
at 53.9 vs. 54. However, this was the third straight reading above 50 which
indicates expansion. Construction spending in December came in much better than
expected at a +1.2%, or triple an expected +0.4% gain. Led by residential
housing construction, construction spending rose at the fastest rate in 10
months. At the close, the March Dow contract
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100 contract
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February gold marched higher in anticipation of Wednesday’s presentation of
new evidence against Iraq. In effort to convince allies that Saddam Hussein is
defying the U.N., Secretary of State Colin Powell is expected to present
evidence which includes pictures of mobile biological weapons installations.
February gold
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After staging a countertrend rally for the past two sessions, the dollar
index looked continue its ways. However, the index later reversed course and
headed lower. The March dollar index
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Treasury futures pulled back today after the positive economic news. Treasury
futures also declined as President Bush told Congress that this year’s budget
deficit would swell to a record $307 billion. This would almost double last
year’s deficit of $159 billion. The budget deficit would likely be financed by
treasury sales. March treasury futures did manage to finish well off their lows.
At the close, the March 10-year contract
fell 5/32 to 113 31/32 and the March 30-year contract
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Crude oil pulled back for the second consecutive session today as the
Venezuelan oil strike could be near a close. According to Venezuelan President
Hugo Chavez, production is reported to be back to about half of its normal three
million barrels a day. Crude oil also fell today as OPEC warned that they would
cut production incase of a slow down in demand. March
crude
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