What Was So Important About The Philly Fed Index?
The Philadelphia Fed Index came
in stronger today and set the tone for all markets.
Most importantly, the Index, which measures manufacturing activity in the
surrounding region, indicated that profit margins for businesses may be
improving as the prices paid component was unchanged while the prices charged
component was higher. As a result, the US dollar, equities, and industrial
metals finished higher.
Equities
The technology heavy Nasdaq was strong from the
start and was later joined by the other indices after the release of the Philly
Fed numbers. The Nasdaq
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up 13.90 to finish at 892.70; and the Dow
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8320.
Fixed Income
US Treasuries reversed early
gains after the Philadelphia Fed index came in stronger than expected. The
10-year note
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was up a slight 0-05, closing at 112-10; and the five year note finished
down 0-040 to close at 112-275
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Metals
With the exception of silver, the metals finished
higher today. Copper was up .35 to close at 73.75
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precious metals side, gold was up 1.30 to close at 327.60
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silver
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Energy
Crude oil was higher today as a result of three
factors: OPEC members Iran, Indonesia, Qatar, and Algeria’s made comments
supporting production cuts; mounting civil tension in Nigeria ahead of this
weekend’s election and threats by Russia, France and Germany that they may
prevent the removal of the UN sanctions on Iraq, which would allow an increase
in oil exports. The May contract was up 4.7% or $1.37 to close at 30.55
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Natural gas futures were up for a fourth straight day as crude inventories
dropped to an all-time low. The May delivery
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5.709.
Currencies
The euro was unable to breach the recent highs
above 1.1 and then reversed course, closing lower against the US dollar on the
day. US equity gains helped the dollar gain against most of the other major
currencies, except the commodity dependent Aussie dollar and Canadian dollars;
as a result, the USD index
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finished at 99.56.