Stocks managed to avoid losses again in November as the S&P 500 finished the day flat. The dollar index sold off again, but stocks didn’t respond. As we begin to see the dollar near its 2009 lows this could become an increasing headwind.
A survey by the Blue Chip Economic Indicators expects real GDP to be down 2.4% in 2009, but up 2.7% in 2010, an improvement from their estimates of a month ago. The December 2010 eurodollars were up .02 at 98.61.
The National Association of Home Realtors said that existing home sales were up 11.4% in the third quarter and up 5.9% from a year ago. January lumber finished up $2.00 at $209.20.
The U.S. Treasury sold $25.0 billion of 10-year T-notes at a median yield of 3.42% and a bid-to-cover ratio of 2.81.
Moody’s Investor Services said that they believe that AIG will be able to pay off the $44 billion credit line that they received as part of the government bailout. So far, the U.S. government has poured $182 billion into AIG.
Grains and Cotton
The USDA’s 2009-2010 U.S. ending stocks estimate of:
Corn was reduced from 1.672 to 1.625 billion bushels.
Soybeans was increased from 230 to 270 million bushels.
Wheat was increased from 864 to 885 million bushels.
Sugar was increased from 836,000 to 1,016,000 tons.
Cotton was reduced from 5.40 to 4.90 million bales.
December corn closed up 8.5 cents at $3.945 after today’s reduced production estimate. January soybeans ended down 4 cents at $9.68.
The USDA’s 2009-2010 world ending stocks estimate of:
Corn was reduced from 136 to 132 million tons.
Soybeans was increased from 55 to 57 million tons.
Wheat was increased from 187 to 188 million tons.
Cotton was reduced from 56 to 54 million bales.
December cotton closed up 1.44 cents at 69.05, the highest in thirteen months, helped by today’s reduced production estimate from the USDA.
The USDA said that they expect beef production to be down 3% in 2009 and down 1% in 2010. They kept their estimate of the 2009 average steer price at 83.32 cents per pound. For 2010, they expect choice steers to average 90.5 cents per pound. December cattle were down .35 at 84.60.
The USDA expects pork production to be down 1% in 2009 and down 3% in 2010. They raised the 2009 price estimate for barrows and gilts from 39.69 to 40.19 cents per pound (54 cents lean). For 2010, the average price estimate was kept at 44.5 cents per pound (60 cents lean). December hogs ended down .17 at 55.62.
Who would have thought? According to USAgnet.com, analysts are saying that sales of orange juice have gone up the past six months, partly because people are seeing it as a way to stave off the H1N1 virus. January orange juice was down .0080 at $1.1520.
The U.S. Department of Energy’s (DOE) Short-Term Energy Outlook said that they expect West Texas Intermediate crude oil to average $77 a barrel this winter. They also expect retail gasoline to average $2.70 a gallon this month, up from $2.55 in October.
For 2010, the DOE increased its estimate of world oil demand from 84.8 to 85.4 million barrels per day. December crude oil ended down .38 at $79.05.
Tropical Storm Ida hit Dauphin Island, Alabama this morning with winds down to 45 m.p.h. Heavy rain is expected along the coasts of Alabama and the Florida panhandle. No reports of significant damage to oil or gas rigs are expected from the storm. December natural gas fell 20.3 cents to $4.467.
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.