Stocks plunged on the day as investors continue to re-evaluate the massive rally in stocks over the last 6 months. Stocks fell 2% on the day as the banks, transports and energy stocks continue their move lower. The dollar rallied almost 0.5% and the Vix spiked almost 12%. Daily Futures has the action from all markets:
U.S. Economy – Shifting Theme?
The U.S. Commerce Department said that durable goods orders were up 1.0% in September, but down 24.1% from a year ago. The December 2010 eurodollars ended up .065 at 98.405 ahead of tomorrow morning’s third-quarter GDP report.
The U.S. Census Bureau said that new home sales were at an annual rate of 402,000 in September, down 3.6% on the month and weaker than expected. So far in 2009, new home sales are down 27% from a year ago. January lumber fell $2.00 to $192.50.
The U.S. Treasury sold $41 billion of 5-year T-notes at a median yield of 2.30% with a bid to cover ratio of 2.63, the best sign of demand in two years.
The stock market and most commodities traded lower today with concerns that the economy is too week to keep supporting their recent up-trends.
Grains and Cotton
December corn was down 1.75 cents at $3.69 with better chances for harvest activity in the next ten days.
December cotton ended down .17 at 66.88, pressured by today’s stronger U.S. dollar.
Statistics Canada said that there were 11.82 million hogs in Canada on October 1st, down 7.3% from a year ago. Low hog prices and an expensive Canadian dollar have made it especially hard on producers this year. December hogs finished up .52 at 55.95.
Recent strength in the U.S. dollar triggered selling in sugar, in spite of tight world supplies. March sugar closed down .72 at 21.93.
The U.S. Department of Energy (DOE) said that crude oil supplies were up 800,000 barrels last week to 339.9 million barrels. Supplies of gasoline were up 1.7 million barrels and heating oil supplies were unchanged. December crude oil dropped $2.09 to $77.46.
The DOE also said that refinery use increased from 81.1% to 81.8% last week. Over the past four weeks, gasoline demand fell to up 1.9% from a year ago while distillate demand was down 13.1% from a year ago.
ConocoPhillips said that they earned $1.5 billion in the third quarter, down from $5.2 billion a year ago.
December natural gas closed down 21.6 cents at $5.066, the lowest close in six weeks, with mild U.S. temperatures ahead of tomorrow’s weekly inventory numbers.
December copper fell 6.85 cents to $2.9305, the lowest close in a week, with concerns that the U.S. economy is too soft.
Australia’s Bureau of Statistics said that consumer prices were up 1.3% in the third quarter from a year ago, the smallest annual gain since 1999. The December Australian dollar fell 1.81 cents to 89.47, the lowest close in two weeks, as today’s report weakened the case for raising the interest rate.
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.