Are Interest Rates Set To Rise?
Crude oil hit a record high today,
while the strong ISM report increased the likelihood of
higher rates.
Saudi Arabia’s King Fahd died in a Riyadh hospital today. Crown
Prince Abdullah will officially be named king later this week but has been the
de facto ruler since 1995. Saudi oil policy remains unchanged but the news
helped push crude oil to a new record high.
Crude Oil +1.65% closed at $61.58 after trading as high
as $62.30 intraday. The entire energy sector had a strong day, Natural Gas
+3.40% was the biggest percentage gainer, hitting a new 2-week high and
closing above $8.
The ISM factory report recorded it’s highest level of 2005 in
July. The index reached 56.6 and was the second consecutive month US
manufacturing increased. The report increased the likelihood the Federal Reserve
will continue to raise interest rates and pushed treasuries lower. Yields on the
US 10 Year T-Note -0.27% rose to the highest level since April 05.
Copper +1.12% hit another all-time high, the eighth
straight day of record prices. Copper is up 13% year to date and 27% since a
year ago.
Pork Bellies -2.59% closed limit down (200
points) for the second consecutive day, while Lean Hogs +3.48%
closed limit up.
Economic News
Construction Spending, M/M Change – Actual -0.3 Consensus 0.5%
ISM Manufacturing Index – Actual 56.6 Consensus 54.5
Ashton Dorkins