Bonds Get The Inflation Blues, But Nasdaq 100 Tops 100-point Gain
A record trade deficit, the lowest weekly jobless claims numbers in 26 years, and surging retail sales numbers from Tuesday all converged on the T-bond market and sent the March contract [USZH0>USH0] down 25/32 to a six-week low of 91 27/32. The contract stands less than one-half point off its contract low close.
Although Thursday’s economic data would normally be bearish for the market, and did restrain Dow futures [DJH0>DJH0] and the S&Ps [SPH0>SPH0] to modest gains, Nasdaq 100 futures surged 106.50 to 3382.00. Nasdaq 100 futures are the leading contract on the Momentum-5 List.
Dollar index futures [DXH0>DXH0] also got buried on the potentially inflationary government data and decline in bonds, and took an additional hit from a report that showed German business confidence rising to its highest level in 1 1/2 years. The March contract tanked more than one dollar during the session and ended down .71 at 101.24.
The Euro was the biggest beneficiary of the German report and the March futures [ECH0>ECH0] rose .00960 to 1.02330. Swiss francs [SFH0>SFH0] and Canadian dollars [CDH0>CDH0] indicated that they might reverse by registering on the Turtle Soup Plus One Buy List, and rose .0049 and .0029, respectively. (Canadian dollars also signaled that they were poised to make a larger-than-normal move by posting on the Multiple Days Low Volatility List).
The energies rose steadily throughout the day, as Energy Secretary Richardson said that the need for the US to make available inventories from the Strategic Petroleum Reserve had diminished, because the supply situation had stabilized. Contracts from the oil patch hit or broke above multi-week highs. January crude [CLF0>CLF0] rose .47 to 26.83; unleaded gas [HUF0>HUF0] gained .0200 to .7330; heating oil [HOF0>HOF0] rose .0145 to .6875; and natural gas [NGF0>NGF0] gained .15 to close at 2.636.
The meats, grains and metals were subdued in trading today.
The bottom dropped out of the cotton [CTH0>CTH0] market as the contract tumbled .83 to a contract low of 48.88, reeling on news that Fruit of the Loom might file for bankruptcy. January orange juice [OJF0>OJF0] also sank 1.90 to 92.20.