Stocks fell 1% today as investors began to worry about the sustainability of the recovery in housing. Existing homes sales data came in well below expectations and stocks remained low throughout the day. Research In Motion is reporting a nightmare of a quarter as I type so the weakness could continue into tomorrow. Daily Futures wraps up the action across all markets:
The U.S. Labor Department said that jobless claims were down 21,000 last week to 530,000, less than expected and the lowest since July 11th. The December 2010 eurodollars were up .055 at 98.335.
The National Association of Realtors said that existing home sales were at an annual rate of 5.10 million units in August, down 2.7% from July’s pace and weaker than expected. Even so, the inventory of homes represents an 8.5-month supply at the current sales pace, the lowest since April of 2007. November lumber ended down .80 at $173.90.
The U.S. Treasury sold $29 billion of seven-year T-notes at a yield of 3.005%, lower than expected.
Several commodities are selling lower today with concerns about the possibility of weaker demand ahead. The December U.S. dollar index jumped up .82 to 77.115, the highest close in two weeks.
Grains and Cotton
The USDA said that, as of last week, 2009-2010 exports of:
Corn fell from up 60% to up 33% from a year ago.
Soybeans fell from up 80% to up 69% from a year ago.
Wheat improved from down 43% to down 41% from a year ago.
Cotton improved from down 37% to down 35% from a year ago.
December corn closed up 6.25 cents at $3.365 with talk that some northern U.S. states may see frost early next week.
The USDA said that 20,000 tons of U.S. soybean oil were sold to unknown destinations.
The southeastern U.S. has had plenty of rain lately and today, more rain continues to fall on the cotton crop in the Mississippi River delta. December cotton ended up .13 at 64.81.
The USDA said that net sales of beef totaled 9,900 tons last week, down from 15,100 tons the previous week. October cattle were down .35 at 86.10.
December coffee fell 7.10 cents to $1.2930, hurt by today’s strong U.S. dollar.
According to IHS Cambridge Energy Research Associates, the oil industry discovered 10 billion barrels of new oil reserves in the first half of 2009 and is on track for their best year since 2000 (see NY TImes article). The new finds are said to be the result of major investments made early this decade when oil prices hit new highs. November crude oil fell $3.08 to $65.89, the lowest close in nine weeks.
The U.S. Department of Energy said that underground supplies of natural gas were up 67 billion cubic feet last week to 3.525 trillion cubic feet. Supplies are now up 17% from a year ago. November natural gas closed up 14.2 cents at $4.896, the highest close in seven weeks.
London inventories of copper were up 8,925 tons today to 340,875 tons, the most in five months. December copper finished down 9.85 cents at $2.7095, the lowest close in over seven weeks, also hurt by today’s weak existing home sales report.
December gold dropped $15.50 to $998.90, the lowest close in nearly two weeks, pressured by today’s commodity sell-off.
The December British pound closed down 3.56 cents at $1.6060, the lowest close in eleven weeks, after Bank of England Governor King suggested to a newspaper that a drop in the pounds value would be helpful to the economy.
Source: Daily Futures
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.