The rally continued for the 5th consecutive day today as stocks rose about 0.85%. The rally was led by tech and oil shares which rallied after an upbeat forecast from Texas Instruments and rising demand for oil. It now appears highly unlikely that the Goldman Sachs 1060 target price won’t be hit before year-end.
From Daily Futures:
The U.S. Labor Department said that jobless claims were down 26,000 last week to 550,000, less than expected. The December 2010 eurodollars closed up .095 at a new contract high of 98.32.
The U.S. Census Bureau said that exports were up $2.7 billion to $127.6 billion in July while imports were up $7.2 billion to $159.6 billion, resulting in net imports of $32.0 billion.
The U.S. Treasury sold $12 billion of 30-year T-bonds for a yield of 4.238%, the lowest since March. The December U.S. T-bonds closed up 2.01/32nds at 120.12/32nds.
Grains and Cotton
The USDA said that South Korea bought 176,000 tons of U.S. corn. December corn closed up 5.5 cents at $3.152 in spite of talk that tomorrow’s USDA estimates may increase.
October hogs closed up .97 at 52.42, the highest close in five weeks, helped by signs of packer demand and possible bargain-hunting. Also, USDA Secretary Vilsack is trying to help pork producers by asking the media not to call the H1N1 virus “swine” flu.
Cocoa and Sugar
December cocoa closed up $34 at a new contract high of $3,067 and October sugar closed up .80 at 21.79, both helped by concerns about tight supplies and a weak U.S. dollar.
The U.S. Department of Energy (DOE) said that crude oil supplies were down 5.9 million barrels last week to 337.5 million barrels. Supplies of gasoline were up 2.1 million barrels and heating oil supplies were up 600,000 barrels.
The DOE also said that refinery use stayed at 87.2% of capacity last week. Over the past four weeks, gasoline demand was up 2.2% from a year ago while distillate demand was down 5.6% from a year ago.
OPEC agreed at their meeting in Vienna “to leave current production levels unchanged for the time being.” They also noted that “market fundamentals remain weak, refinery utilization rates are low and product inventories have risen considerably.” November crude oil ended up .45 at $72.27.
The U.S. Department of Energy said that underground supplies of natural gas were up 69 billion cubic feet last week to 3.392 trillion cubic feet. Supplies are now up 17% from a year ago and up 17% from the five-year average. November natural gas jumped up 37.9 cents to $4.249.
Australia’s Bureau of Statistics said that the unemployment rate was unchanged at 5.8% in August, but 27,100 jobs were lost, weaker than expected. The December Australian dollar was up .21 at 85.66.
The Bank of Canada met and kept its interest rate unchanged at .25%, as expected. They also said that they expect the rate to stay unchanged until the end of the second quarter in 2010. The December Canadian dollar was up .20 at 92.71.
Statistics Canada said that exports were up 3.3% in July to C$30.3 billion while imports were up 8.3% at C$31.7 billion. The result was net imports of C$1.4 billion in July.
The Bank of England met and kept its interest rate unchanged at .50%, as expected.
Japan’s Cabinet Office said that machinery orders were down 9.3% in July to the lowest level since records began in 1987.
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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