(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers.)
GREAT NEWS FOR AMERICAN ECONOMY MAYBE BAD NEWS FOR GOLD, BONDS, AND STOCKS
October 5, 2012
The just released employment data from the U.S. Department of Labor is great news for the U.S. economy.
Our leading indicator is weekly unemployment claims. We have been telling you for the last several weeks that the data is improving. Weekly unemployment claims that we give a heavy weight to is a leading indicator. The just released employment data is a lagging indicator.
September unemployment rate fell to 7.8% vs 8.1% consensus; non-farm payrolls came at 114K vs 120K consensus and less than 100K whisper numbers; non-farm private payrolls came at 104K vs 130K consensus and under 100K whisper numbers.
Here is where the news gets really good — August non-farm payrolls were revised upwards to 142K from 96K and September hourly earnings rose 0.3% vs prior increase of 0.0%.
On the surface it would seem that this is great news for the stock market. But the markets are perverse. Here is how some money managers are going to react.
- Good economy means less QE in the end. Therefore the thing to do is to sell stocks.
- Good economy means Obama has a better chance of getting elected. Wall Street is mostly Republican therefore, sell.
- Good economy means interest rates are moving up. Therefore bonds are becoming more attractive, so sell stocks and buy bonds.
Most of us will find the foregoing nonsensical. However who said that Wall Street was a sane place.
This should be bad news for gold and silver, but since they are under the control of the momo crowd, the key determinate will be if Smart Money steps in to sell.
Gold futures are at $1784, silver futures are at $34.60, and oil futures are $91.31.
S&P 500 resistance levels are 1465, 1472, and 1480; support levels are 1450, 1444, and 1439.
DJIA futures are up 52 points.
ROMNEY DEBATE WIN HAS IMPLICATIONS
October 4, 2012
Romney debate win has major implications. You will see separate posits in the near future with specifics.
The ECB left rates unchanged. There were no fireworks in Draghi’s press conference.
Gold futures are at $1790, silver futures are at $34.80, and oil futures are $88.87.
S&P 500 resistance levels are 1465, 1472, and 1480; support levels are 1444, 1439, and 1424.
DJIA futures are up 46 points.
SOLID GAINS IN EMPLOYMENT IN THE U.S.
October 3, 2012
ADP data released earlier this morning shows that private sector employment increased by 162,000 in September. The consensus was 133,000.
This is another one in a series of recent data points suggesting that the U.S. economy is chugging along.
Gold futures are at $1773, silver futures are at $34.65, and oil futures are $90.52.
S&P 500 resistance levels are 1444, 1450, and 1465; support levels are 1439, 1424, and 1415.
DJIA futures are up 4 points.
RBA ADMITS MINING GROWTH IS FADING
October 2, 2012
The Reserve Bank of Australia (RBA) in a surprise move cut its bench mark rate by 0.25% to 3.25%. This rate cut is a tacit admission by RBA that the mining boom is fading. Australian economy has been highly dependent on mining and export of gold, silver, coal, copper, iron ore, etc.
Of course, as has been the case lately, the momo crowd will continue to ignore the hard data and continue to attempt to run metals higher.
Gold futures are at $1775, silver futures are at $34.70, and oil futures are $92.65.
S&P 500 resistance levels are 1444, 1450, and 1465; support levels are 1439, 1424, and 1415.
DJIA futures are up 32 points.
NEW MONEY POURING INTO STOCKS, GOLD AND BONDS
October 1, 2012
At the beginning of each quarter, new money pours into the market. This morning new money is pouring in stocks, gold, silver, oil and bonds.
Typically this trend continues for three days.
Gold futures are at $1789, silver futures are at $35.40, and oil futures are $92.79.
S&P 500 resistance levels are 1444, 1450, and 1465; support levels are 1439, 1424, and 1415.
DJIA futures are up 74 points.
