The market has completely reversed the impact of the Dubai sell-off. The market was back to its old tricks today as the dollar sold off and stocks rallied 1.2%. Oil and gold each rallied over 1% as the Euro gained 0.5% on the dollar. Daily futures has the action from all markets:
The National Association of Realtors said that its index of pending home sales was up 3.7% in October to the highest level since March of 2006. From a year ago, the index is up 32%. January lumber hit new contract highs early, but ended down $4.20 at $242.00.
The Institute of Supply Management’s index of manufacturing fell from 55.7 to 53.6 in November, weaker than expected, but still a sign of expansion.
The U.S. Census Bureau said that construction output was at an annual rate of $910.8 billion in October, up slightly from September’s pace and down 1.6% from a year ago.
The Johnson Redbook index of U.S. retail sales showed a gain of 5.2% in the first four weeks of November from a month ago. From a year ago, sales were up 2.6%.
The March U.S. T-bonds closed down 1.03/32nds at 121.20/32nds, pressured by fading concerns over the default in Dubai.
Grains and Cotton
The USDA said late yesterday that only 79% of the corn crop was harvested. The hang-up appears to be in North and South Dakota where only 40% and 58% of the crops have been harvested due to wet and moldy conditions. December corn was down 3 cents at $3.997.
The USDA said today that 116,000 tons of U.S. corn was sold to unknown destinations in 2010-2011.
According to Dow Jones Newswires, Colombia’s Federation of Coffee Growers said that the coffee crop will total 8.1 million bags in 2009, down from 11.5 million bags in 2008. March coffee ended up .0070 at $1.4270.
Late yesterday, the USDA’s Florida Weather Crop Report said that last week’s rain “was not enough to relieve the mild drought conditions being experienced in eastern portions of the citrus producing area.” January orange juice gained a penny at $1.2030, the highest close in five weeks.
February gold jumped up $17.90 to another new record high at $1,200.20, on the back of the weak U.S. dollar and Federal Reserve’s low interest rate policy. March silver finished up 68.5 cents at $19.21, the highest close in 16 months.
Tired of missing out on the rising price of gold, Barrick Gold announced today that it has stopped all hedging operations.
The Chinese government’s index of manufacturing was unchanged at 55.2 in November, the ninth consecutive month of expansion. March copper closed up 5.40 cents at $3.2310, the highest close in 14 months.
The Reserve Bank of Australia increased its interest rate from 3.50% to 3.75%, as expected. It was the third consecutive month of increase. The December Australian dollar closed up 1.18 cents at 92.48.
Is the unemployment rate peaking in Europe? Eurostat said that the unemployment rate in the Euro area was unchanged at 9.8% in October. The December euro finished up 1.03 cents at $1.5094.
The Bank of Japan said that they will make 10 trillion yen ($125 billion) of three-month funds available as a form of emergency lending to help the economy. The December yen fell .0051 to 1.1540.
The Chartered Institute of Purchasing and Supply index of manufacturing in the U.K. fell from 53.4 to 51.8 in November, weaker than expected, but still a sign of expansion.
An index of manufacturing for the Euro area from Markit Economics increased from 50.7 to 51.2 in October.
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.