(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
EMPLOYMENT DATA WEAKER THAN EXPECTATIONS, GOLD SPIKES
August 2, 2013
The U. S. employment data came much weaker than expectations. Non-Farm Private Payrolls came at 161K vs consensus of 195K and whisper number of 225K.
Inflation is under control. June PCE Core Prices came at 0.2% vs 0.2% consensus. This is our favorite inflation indicator. Year over year PCE Core Prices are up only 1.2%. Prior to the release of the data, gold had fallen under $1285. Immediately after release of the data gold spiked and is trading at $1315 as of this writing. The reason is that the data makes tapper in September less likely.
Oil is slightly pulling back.
U. S. stock futures are also showing moderate pullback.
Gold futures are at $1315, silver futures are at $20.09, and oil futures are $107.22.
S&P 500 resistance levels are 1710, 1725, and 1750; support levels are 1675, 1650, and 1635.
DJIA futures are down 13 points.
PMI DATA FROM CHINA DRIVES STOCKS, GOLD, AND OIL HIGHER
August 1, 2013
Purchasing Manager’s Index (PMI) in China came at 50.3 in July compared for 50.1 in June. Most economists had expected a contraction. This data is driving stocks, gold and oil much higher this morning.
We have repeatedly written that official economic data from China is suspect. In our models, we use privately produced data from HSBC. HSBC is the old Hong Kong Shanghai Bank. HSBC PMI fell to 47.7 in July compared to 48.2 in June.
It is important to remember that in the short-term markets are a voting machine but in the long-term they are a weighing machine.
Today is the first day of August which is traditionally a strong positive day for the stock market.
Gold futures are at $1323, silver futures are at $19.83, and oil futures are $107.
S&P 500 resistance levels are 1700, 1710, and 1725; support levels are 1675, 1650, and 1635.
DJIA futures are up 110 points.
STRONG GDP, THE FED ON TAP, AND INTEREST RATES SPIKE
July 31, 2013
Q2 advanced GDP came at 1.7% vs. 1.1% consensus.
Q2 chain deflator came at 0.7% vs. 1.2% consensus. Chain deflator is an indication of inflation.
Two day FOMC meeting will wrap up today. FOMC will release its statement this afternoon. The statement may move the markets. There is no Fed press conference this time, so we will simply have to read the tea leaves from the written text.
ADP employment number came at 200K compared to consensus of 175K.
Interest rates are spiking due to strong economic data. At this time it is not clear how the stock market will react to the strong economic data. As of this writing the reaction is muted.
Gold futures are at $1322, silver futures are at $19.71, and oil futures are $103.49.
S&P 500 resistance levels are 1700, 1710, and 1725; support levels are 1675, 1650, and 1635.
DJIA futures are down 14 points.
GOLD ON EDGE BEFORE THE FED MEETING
July 30, 2013
The two-day FOMC meeting starts today. Gold bulls are concerned that the Fed will announce tapper. However, the consensus is that tapper will not be announced until September.
Unlike the last several days, there was extensive selling in both gold and silver in Asia.
In the U. S. stocks are likely to open higher.
Gold futures are at $1326, silver futures are at $19.80, and oil futures are $103.69.
S&P 500 resistance levels are 1700, 1710, and 1725; support levels are 1675, 1650, and 1635.
DJIA futures are up 41 points.
WEAK ASIA BUT STRONG EUROPE
July 29, 2013
Asian stock markets were very weak overnight. Europe did not follow. This is a departure from the usual pattern in which Europe has tended to follow the Asian market. The reason may be a wider recognition that the economy in Europe is turning.
Significant buying was seen in gold and silver in Asia. There is no follow through so far in Europe and North America.
The U. S. stock market will start the day out slightly weaker.
Gold futures are at $1327, silver futures are at $19.84, and oil futures are $105.03.
S&P 500 resistance levels are 1700, 1717, and 1725; support levels are 1675, 1650, and 1635.
DJIA futures are down 38 points.
