The market rebounded in afternoon trading after briefly trading in the red. The anti-dollar trade reasserted itself as oil traded over 1.5% higher and gold jumped another 0.5%. Volume was relatively light and breadth was mixed. All in all it was a relatively positive day as stocks recovered more of their Friday losses with the S&P 500 finishing the day 0.4% higher.
Dubai Update
Most commodities were higher today in the aftermath of Friday’s surprise news from Dubai. The central bank of the United Arab Emirates said that they will stand behind the debts of Dubai World that are owed to foreign banks and that has minimized the default’s international impact.
U.S. Economy
The Chicago Purchasing Managers’ index increased from 54.2 to 56.1 in November, a stronger sign of expansion than expected. The December 2010 eurodollars were up .03 at 98.905.
January lumber closed up its $10 daily limit at $246.20, the highest close in five months, while the Treasury Department met with mortgage lenders in an effort to help more people keep their homes.
Grains and Cotton
The USDA said that South Korea bought 270,000 tons of U.S. corn. March corn was up 4 cents at $4.175.
The USDA said that last week’s export inspections for:
Corn totaled 23.8 million bushels, down 37% from a year ago.
Soybeans totaled 41.3 million bushels, up 3% from a year ago.
Wheat totaled 14.7 million bushels, down 29% from a year ago.
January soybeans closed up 7.5 cents at $10.605.
March cotton finished up .84 at 74.68, helped by today’s cheaper dollar.
This afternoon, the USDA will release its final Crop Progress Report of 2009.
Coffee
Reuters news reported that Brazil’s government is rejecting roughly one-third of the coffee that farmers are offering, due to poor quality. March coffee closed up 3.95 cents at $1.4200, the highest close in over two weeks.
Energies
Yesterday’s 6 to 10 day forecast from the National Weather Service is expecting below average temperatures for most of the U.S. January natural gas fell 34.4 cents to $4.848.
Metals
March copper closed up 5.15 cents at $3.1770 after the shock of last week’s default from Dubai wore down. Also, real GDP in India was up 7.9% in the third quarter from a year ago, better than expected.
Currencies
Statistics Canada said that real GDP was up .1% in the third quarter, but down 3.2% from a year ago, weaker than expected. The December Canadian dollar gained .50 to 94.60.
Japan’s government said that industrial production was up .5% in October. Also, housing starts were down 27.1% in October from a year ago, better than expected. The December yen closed up .0068 at 1.1591, the highest spot close in 14 years.
Bank of Japan Governor Shirakawa and Prime Minister Hatoyama meet this week and some are expecting them to announce more stimulus measures for the economy.
Eurostat estimated that consumer prices were up .6% in the Euro zone in November, the first positive gain in seven months.
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.