Why Next Week is Critical
Stock index futures tumbled today, giving back all of yesterday’s gains plus
much more. Worries over Iraq and the dollar hitting new lows had traders selling
stocks and buying “safe haven” instruments such as bonds and gold. Traders took
a cautious stance on stocks ahead of Monday’s UN arms inspectors report,
Tuesday’s State of the Union address, and Wednesday’s Fed meeting. Index futures
have lost all gains from the beginning of the year. At the close, March S&Ps
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PowerRating) fell 22.70 to 860.30, the March Dow futures
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to 8113, and Nasdaq 100 futures dropped 26.50 to 1000.
The dollar continued to worsen as traders flee the greenback over the looming
war with Iraq. Demand for the dollar also continued to slide as the slow
economic recovery and the war with Iraq has foreigners looking for safer
investments. Once again the dollar fell to a three-year low against the Euro.
The dollar fell to $1.08150 per euro in the March contract and the March dollar
index
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Treasury futures jumped after pulling back yesterday. The selloff in stocks
and the potential for war led investors back the safe haven of bonds. The March
10-year contract
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contract jumped 26/32 to 112 12/32.
Gold is sitting on new six-year highs. In times of turmoil, the shiny metal
is also viewed as a “safe haven.” February gold
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368.40.
Crude oil climbed today ahead of Monday’s UN arms inspector report. Crude
snapped back today after selling off yesterday as the Department of Energy
revealed that the Venezuelan oil strike is not having a negative impact on crude
supplies. There is also dispute over the actual crude production in Venezuela.
Chavez’s government reports production of 1 million barrels per day, or about a
third of normal production. Meanwhile, opponents claim much lower figures. March
crude
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