Posted by admin on July 5, 2009 under Commodity & Futures News | 
Oil bounced off its highs last week and started trading in a clear downtrend. Brent crude oil lost more than 3 percent to finish around 66.65 per barrel last week. This was below the 34 day moving average which is a key level for technical analysts. The 34 day moving average is integral in the Fibonacci sequence created by Italian mathematician Leonardo Fibonacci. The sequence deals with the ratio between prices and is used by technicians to identify support and resistance levels. The commodity was hitting new eight months highs of around 73.50 per barrel near the end of June. It has since lost $7 a barrel and is expected to go lower over the next week. However continuing attacks on oil interests in Nigeria could push crude higher despite the technical signals. Either way we are still a far cry from the almost $150 a barrel we were seeing at this time last summer.
The economic data set to be released this week for commodities is on Wednesday the EIA Petroleum Status Report. The report is released weekly and contains data on petroleum inventories in the United States. Released a day later on Thursday is the EIA Natural Gas Report. Essentially the same report but for natural gas, detailing the inventory of natural gas stored underground in the US, also released weekly. Both reports are released by the Energy Information Administration and contain information for the week ending on the previous Friday.
Gold prices also fell from the top end of their recent trading levels. Even though on Friday the precious metal jumped more than two dollars a troy ounce it closed out the week at 932.80, over $9 lower than its high the previous week. Silver prices also followed suit dropping off of late June highs of more than $14, to end the trading week at around $13.40. While gold prices are expected by many to go significantly higher (some analysts say above $1000 per ounce in the near term and over $1200 an ounce by the end of the year), they seem to have paused and are trading in tandem with both falling oil prices and dropping equity prices.
Over the past few weeks oil and precious metals have been trading in concert with stock markets and for next week it is believed stock traders will be focused on earnings to drive any momentum. One company reporting earnings next week that both equity and commodity traders will be watching is Chevron. The consensus estimates on Wall Street for the energy drilling, refining, and generation company are for $1.18 profit per share versus $2.90 per share in the same period a year ago. They report on Thursday, July 9th after the bell. The stock (CVX) has been trading in the $65 to $70 dollar a share range over the past couple months, down from around $100 per share a year ago.
Tags: Chevron, commodity, CVX, economy, energy, gold, investing, oil, silver, Stocks, wall street
Posted by admin on under Stock Market News |
It was one of the worst pre-July 4th holiday trading sessions in the history of the stock markets. The Dow Jones Industrial Average lost more than 223 points or 2.63% in what was a very broad based decline. For a significant portion of the trading day all 30 of the Dow components were in the negative. The technology heavy Nasdaq lost nearly 50 points or 2.67% as well and the broadest measure of the three, the S & p 500 Index was off 26.91 points or 2.91%. A large amount of the selling was attributed to the worse than expected non farm payroll report released this morning.
The employment situation report contains the unemployment rate, nonfarm payrolls and wage information. The report as a whole was mostly in line with the low end of expectations, however payrolls came in at -467,000 well off the largest estimates of -435,000 and a substantial miss from the median consensus estimates of -350,000. The unemployment rate came in slightly better than consensus at 9.5%. Also initial jobless claims were better than expected neither of which helped the markets as they continued to focus on the payrolls throughout the day.
This week Citigroup was again in the headlines when it decided to piss people off in several new ways. With the government adding new restrictions on employee bonuses the bank decided to raise salaries, some up to 50%, in order to retain people they consider “key employees”. In a totally unrelated press release Citi said it would be raising rates on the credit cards of up to 15 million customers. Citigroup was among the biggest recipients of federal aid receiving more than $45 billion in TARP funds. Since 2006 their stock has tumbled 95% and over the last six quarters they have lost close to $36 billion.
Another very unpopular company was in the news this week, American International Group or AIG effected a 1 for 20 reverse stock split on Wednesday. The measure was overwhelmingly approved by shareholders, but the stock fell over 22% on the day. Before the split the stock was trading at $1.16 per share on Tuesday, but was down more than 20% in the pre-market on Wednesday and closed the day at $18.08 per share. Executives said the move was necessary to prevent the stock from being delisted from the New York Stock Exchange. In a strange coincidence the NYSE erroneously posted a suspension and delisting notice of AIG on the NYSE’s website, the notice was removed once the error was discovered.
Overall the stock markets have turned decidedly negative for the week and it was one of the worst first weeks of July in the history of the markets. For next week earnings should be the driving factor for stocks. Alcoa reports its earnings on Tuesday which traditionally kicks off earnings season. Chevron, 3com, Progressive Corp among others all report their earnings as well. Next week is pretty light on economic data releases the most important ones to watch are jobless claims on Thursday and Consumer Sentiment on Friday.