(The Weekly Digest reproduces the morning capsules made available every morning before the market open in the Real Time Feeds to the paying subscribers. )
MODI SWEEPS INDIA, GOOD FOR GOLD
May 16, 2014
Narendra Modi sweeps India’s election trouncing the ruling Congress Party. Modi will have a solid majority in the lower house of parliament and thus should be able to push his agenda through. The core constituency of Modi’s BJP Party is small business, precisely the people who hoard gold. Modi will be under pressure to reduce duties on the import of gold.
The budding rally in gold was killed by great housing start numbers in the U. S.
April Housing Starts came at 1072K vs 975K consensus. April Building Permits came at 1080K vs. 1008K consensus.
Interest rates continue their aberrant pattern of going lower.
Oil is range bound.
Stocks are listless in early trading with a fair amount of buying coming in immediately after good housing numbers.
Gold futures are at $1290, silver futures are at $19.29, and oil futures are $101.93.
S&P 500 resistance levels are 1875, 1900, and 1925; support levels are 1850, 1837, and 1825.
DJIA futures are up 3 points.
COOL CPI FOLLOWS HOT PPI, GOLD FALLS
May 15, 2014
After yesterday’s hot PPI, Core Consumer Price Index (CPI) came at 0.2% vs. 0.2% consensus.
On the news, gold fell below $1300.
Oil is retreating.
In an aberrant behavior, interest rates continue to fall disproportionately to the news and economic data.
Stocks are range bound in early trading.
Gold futures are at $1295, silver futures are at $19.57, and oil futures are $102.08.
S&P 500 resistance levels are 1900 and 1925; support levels are 1875, 1850, and 1837.
DJIA futures are down 25 points.
HOT PPI, GOLD IS FLYING
May 14, 2014
Producer Price Index is a leading indicator of inflation and contributes materially to our models. April Core PPI came at 0.5% vs. 0.2% consensus.
This is a volatile series and it may turn out that April’s number is an aberration but it is worth watching.
Gold is flying and has reclaimed $1300 level. There is violence in South African platinum belt. This is also providing support to gold.
Interest rates continue their contrary to conventional wisdom behavior; interest rates are falling even though inflation number is higher.
Oil is rising.
Stocks are consolidating in early trading.
Gold futures are at $1305, silver futures are at $19.85, and oil futures are $102.06.
S&P 500 resistance levels are 1900 and 1925; support levels are 1875, 1850, and 1837.
DJIA futures are down 7 points.
RETAIL SALES FALL AS STOCKS HIT NEW HIGHS
May 13, 2014
April Retail Sales ex-auto came at 0.0% vs. +0.6% consensus. Unless this data turns out to be adherent, this indicates that the underlying economy may have a period of weakness even though the stock market, at least for the time being, is hitting new highs.
Gold jumped on the news and interest rates fell.
Oil is slightly higher on Russia concerns.
In early trading stocks are moving higher but are up against stiff resistance.
Gold futures are at $1295, silver futures are at $19.52, and oil futures are $101.26.
S&P 500 resistance levels are 1900 and 1925; support levels are 1875, 1850, and 1837.
DJIA futures are up 17 points.
PRO-RUSSIANS CLAIM VICTORY, GOLD RISES
May 12, 2014
Pro-Russians in Ukraine claim that 98% of voters in Luhansk and 89% in Donetsk voted in their favor.
Gold is rising above $1300 on the assumption that the vote will increase geopolitical tensions.
Interestingly, early trading in both stocks and bonds are contrary to gold trading. Stocks are rising and so are interest rates.
Oil is slightly higher.
Gold futures are at $1301, silver futures are at $19.59, and oil futures are $100.42.
S&P 500 resistance levels are 1900 and 1925; support levels are 1875, 1850, and 1837.
DJIA futures are up 53 points.
