By now, most people in the world know that the price of oil is falling
rapidly. Metals too. Trading everywhere reflects it.
Yesterday, except for a couple sectors, Energy (XLE -4.7%) and Basic
Materials (XLB -4.3%), markets were generally flat and trading volume was light
ahead of today’s FOMC decision.
At the close, the DJIA (-42.17 -0.37% to 11284.15), S&P Composite (-11.30
-0.90% to 1249.01) and NASDAQ Composite (-25.40 -1.10% to 2285.56) were all
down. The Russell Small Cap index fell -1.68%. But, without the impact of the
oils and metals, the balance of the market saw small gains.
The losing industry groups were the usual commodity players: Oil Services
($OSX -5.8%), NatGas ($XNG -5.1%) and Goldminers ($XAU -4.7%). Airlines ($XAL
+4.8%) enjoyed the lower oil prices even if traders blanched at the
industry-wide loss that exceeded -$6 billion this year.
In extreme Cara 100 trading, which was very quiet, the Canadian exchanges
were closed but the big names of Canada took hits on the NYSE: Potash (POT
-10.4%), Teck (TCK -8.6%), Cameco (CCJ -8.0%), and Suncor (SU -6.9%). Most of
the goldminers also took big hits as precious metal prices sold off.
Overnight, Australia’s All Ords index (-1.52% to 4882.0); Shanghai (-1.86% to
2690.8); Hong Kong (-2.51% to 21949.8); and Japan’s Nikkei (-0.14% to 12914.7)
all closed down, some quite a lot. Hong Kong has had a tough three days and
Australia has sold down from the open this week. On the other hand, India’s
Sensex (+2.63% to 14961.1) lifted strongly, and I noted that the late session
trading elsewhere picked up as it appeared that the Banks would have a good day
in Europe.
At about 8am ET in Europe: the French CAC was up +1.58% to 4349; the German
DAX up +2.23% to 6492; and the UK FTSE up +1.79% to 5415. There has been a
bullish move in these indexes following an open that gained strength as oil
prices pulled back again.
The DJIA futures are at 11353 (+82), which indicates a strong open.
The $USD closed yesterday at $0.7344 (up +0.01%), but so was the Euro
(+0.14%), while the Yen, Pound, and Loonie dropped -0.54%, -0.65% and -0.91% to
92.37, 196.27 and 96.46, respectively.
Today the $USD futures are up to $0.74045, which is strong, and the Euro is
down to 154.41. Crude Oil is down to 119.38/bbl.
The precious metals are getting hammered in the spot market again (although a
tad stronger in the past 30 minutes): gold, palladium, platinum and silver at
8:06am ET are 886.16, 341, 1536 and 16.67 per oz respectively.
Comments & Outlook
With a stronger $USD and weaker spot prices in the precious metals, it
appears to be another bad day coming for the goldminer Bulls. Yesterday, there
were some large losses taken in this group.
For tells in the metals market, I watch Teck (TCK in NY and Toronto) and
Xstrata (XTA in London). Whoever trades those two stocks really knows what they
are doing. XTA on the LSE is up right now about +1.6% btw.
