Markets were firm on Friday capping off a good week for just about everything. Stocks closed higher by 0.6%. The dollar got smashed in relative terms and that laid the foundation for more buying in risk assets. The dollar was down well over 0.5% in terms of every other currency, but the mainstream media will imply that today was somehow a great day for the U.S. economy and stocks.
I don’t know how long we can continue this dollar destruction strategy, but something isn’t right in the market when everything rises every single day. I have a very uneasy feeling about this market as we head into the back end of 2009….The market is beginning to get that “can’t lose” feel again. If you’re an owner of stocks it feels certain that you will be more wealthy tomorrow than you are today. The recent figures on this rally are staggering. We are up 64% since March, 6% in November and 2.5% this week.
U.S. Economy
The U.S. Census Bureau said that exports were up 2.9% in September to $132.0 billion while imports were up 5.8% to $168.4 billion. The result was $36.5 billion of net imports, more than expected.
The University of Michigan’s consumer sentiment index fell from 70.6 to 66.0 in November, weaker than expected.
Grains and Cotton – Soybean exports jump
The USDA said that, as of last week, 2009-2010 exports of:
Corn fell from up 12% to up 10% from a year ago.
Soybeans jumped from up 10% to up 17% from a year ago.
Wheat improved from down 34% to down 33% from a year ago.
Cotton slipped from down 31% to down 32% from a year ago.
Dow Jones Newswires reported that Japan bought 76,000 tons of wheat from the U.S. and 21,000 tons from Australia.
Livestock
The USDA said that net sales of beef totaled 8,400 tons last week, down from 9,000 tons the previous week.
Energies
The U.S. Department of Energy said that underground supplies of natural gas were up 25 billion cubic feet last week to 3.463 trillion cubic feet. Supplies are now up 10% from a year ago.
Currencies
Eurostat reported that real GDP was up .2% in the EU-27 in the third quarter and down 4.3% from a year ago, not as strong as expected. German GDP was up .7% in the third quarter, while GDP in France was up .3%.
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.
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