A big win for the bears heading into the weekend. Stocks declined over 1.2% despite what was spun as very good housing data and earnings that were simply thru the roof. The trigger for the selling appears to be one of our recent concerns: a rally in the dollar. Positive earnings are now broadly expected throughout the rest of the earnings season. The economic data will be in focus. Of particular focus will be the housing data which is showing strong signs of a resumed downtrend. Daily Futures has the action from across all markets:
The National Association of Realtors said that existing home sales were at an annual rate of 5.57 million units, up 9.4% in September and the most in two years. January lumber ended unchanged at $194.00.
Microsoft’s reported earnings were down 18% in the most recent quarter from a year ago, but better than expected.
Grains and Cotton
Its getting old to report, but rain continues to fall over the Midwest, from the Missouri River eastward. December corn started the day higher, but finished down 5.75 cents at $3.977. November soybeans ended up a half-cent at $10.06.
The USDA said that pork production totaled 2.00 billion pounds in September, up 1% from a year ago and a new record high for September. Beef production totaled 2.23 billion pounds, down 2% from a year ago.
December hogs closed down .70 at 53.02 after yesterday afternoon’s cold storage report showed pork inventories up 1% from a year ago, a little more than expected.
After the close, the USDA estimated this week’s beef production at 515.5 million pounds, up 1.9% from a year ago. Pork production was estimated at 469.3 million pounds, up 1.8% from a year ago. December cattle ended up .02 at 87.40.
In the Ivory Coast, the government is considering going back to a policy of minimum price guarantees for cocoa to help encourage more production. December cocoa ended down $27 at $3,365.
December coffee fell 6.50 cents to $1.3715, backing away from prices earlier this week that were the highest in four months.
December crude oil was down .69 at $80.50, pressured by today’s rise in the U.S. dollar.
December natural gas fell 13.3 cents to $5.484, the third consecutive day lower, pressured by abundant U.S. supplies.
The U.K.’s Office for National Statistics said that real GDP was down .4% in the third quarter and down 5.2% from a year ago, weaker than expected. The current recession is now the longest since 1955. The December British pound fell 3.12 cents to $1.6306.
Eurostat said that new industrial orders were up 1.2% in August, but down 22.3% from a year ago. Also, a composite index of manufacturing and services in the Euro zone increased from 51.1 to 53.0 in October, stronger than expected. The December euro was down .0024 at $1.5000.
The unemployment rate in Spain stayed at 17.9% in the third quarter, the highest in the European Union.
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.