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 |
The stock markets had a rough day on Tuesday, giving up virtually all of the gains made on Monday. The Dow Jones Industrial Average lost 82.38 points or almost one percent, the Nasdaq gave up 9 points or half a percent and the Standard and Poors 500 Index, the broadest of the three, was down 7.91 points or 0.85 percent. The Dow was actually in positive territory this morning until the release of the consumer confidence number of 49.3 for June. A big drop from the 54.8 number in May and huge miss of the consensus estimates that were as high as 56. With the consumer being two thirds of the economy this was a painful miss for the markets.
Despite Tuesdays losses the Dow still finished the second quarter with a gain of 838.08 or 11.01%. It was one of the best quarters for the Dow in more than five years. Because of the rough first quarter the Dow Jones is still negative year to date by 3.8%. The Standard and Poors 500 index had its best percentage gain in a quarter in over a decade, tacking on more than 15%, but year to date the index is only up by 1.8%. The technology heavy Nasdaq has been the best performer over both periods gaining 20.1% in the second quarter and 16.4% on the year. Some of the best performing stocks on the quarter were Genworth Financial (GNW), Office Depot (ODP) and Ak Steel (AKS). Some of the worst performing stocks were KeyCorp (KEY), CIT Group (CIT) and Eastman Kodak (EK).
Sealy Corporation the largest global manufacturer of bedding, reported their second quarter earnings after the bell today. Net sales were $298.5 million down from the $375.4 million in the same period a year ago. The net loss turned out to be 0.06 cents per diluted share and was below analysts estimates. The company cited a very difficult retail environment and said they expected a challenging retail environment moving forward. The stock (ZZ) was unchanged on the day at $1.96 per share.
Trading volumes have been increasingly falling since May but after the big consumer confidence surprise trading may step up over the next couple days on the release of more economic data. For Wednesday we have the ADP report, motor vehicle sales, the ISM Manufacturing Index and Construction Spending among others.
The motor vehicle sales report is another measure of consumer spending and is the unit sales of domestically produced cars and light duty trucks. A strong number here is viewed by investors to signify economic growth.
The ADP report is an employment report representing 24 million U.S. employees in the private sector (non government). It is typically released the day before the Bureau of Labor Statistic’s non farm payroll report. The employment statistics also shows data on wage trends and wage inflation helping the federal reserve in determining monetary policy.
The Institute for Supply Management Manufacturing Index surveys over 300 manufacturing firms on different aspects of business including employment, inventories, production, and new orders. Readings above 50 indicate an expanding factory sector. May’s number was 42.8 and the estimates for June are for an increase to around 45.
For tomorrow Wednesday July 1 if any of these economic release drastically surprise in either direction we could see an increase in volume going into the July 4 holiday. Also six companies will report their earnings tomorrow including Constellation Brands Inc. (STZ) estimates are for 0.32 cents per share and General Mls Inc. (GIS) estimates are for 0.80 cents per share.
Tags: ADP, commodity, Constellation Brands, DOW, economy, General Mills, ISM Manufacturing, markets, Nasdaq, SandP, Stocks