Three Things For Oil To Contend With
Equities were lower and
Treasuries were stronger today, but the big movers were oil and the base
metals–which should gradually help to allay deflation fears.
Equities
The equity markets were slightly lower for the
day in response to unnerving geopolitical events in Saudi Arabia. Technology was
weakened by some selective company downgrades by Merrill, and the Nasdaq index
futures contract
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500 contract
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and the Dow
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finish at 8667..
Fixed Income
Treasuries traded higher, especially on the
back-end, as the market placed flattening trades (selling front dates in favor
of buying higher yielding middle and back end issue) in anticipation of lower
rates ahead. The 10 year futures contract
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close at 117-020; the 30 year
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was up 010 at 115-005
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Metals
Morgan Stanley today issued positive comments
about its outlook for copper prices and certain companies that mine the metal.
The metal continues its impressive climb and was up by 1.25 to close at 76.45
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lower today on dollar strength, finishing lower by 1.70 to close at 350.2
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Energy
Crude oil prices were bolstered by several news
developments, including a terrorist attack on a western compound in Saudi Arabia
(the world’s largest oil producer); Russia’s informal agreement with OPEC to cut
production if necessary; and an announcement that one of Iraq’s main pipeline
has been damaged by saboteurs. June crude was up 1.15 to close at 28.50
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Natural gas futures were also higher trading up .336 to close at 6.308
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Currencies
The dollar was stronger today against the euro
after the European Central Bank hinted that it may lower rates in the next few
months. The USD index
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finished at 94.88.