The markets are heading south again and the flight back to gold is on. So much for the recovery even if we are still well above the lows of last week.
- Gold is giving the market scare all over again…. Gold is up $28.00 and change at $1,822.20.
That 2.14% 10-Year Treasury auction of last week is now sounding like a bargain… The 10-Year Treasury yield hit 2.07% on last look.
S&P futures are down 31 points , NASDAQ futures are down over 50 points and DJIA futures are down 250 at 11,132….
News coming out of Europe is the biggest culprit. News that a half-billion Euros was extended to one undisclosed bank in Europe has the markets thinking that a blow-up is lurking again. Italian banks were in some cases down by the max limit. Trading in Russia on the MICEX was halted for technical reasons. Austria is supposedly asking for collateral on loans to Greece… another questionable “AAA” rated nation. The ongoing fears of a financial transaction tax, a truly silly idea, are only growing rather than abating.
Morgan Stanly downgraded the global growth targets this morning although we would note that the downgrade is not that much and frankly it is late with zero as far as new observations.
The economic data is heading the wrong way. CPI rose to 0.5% in July rather than a 0.2% expected. So much for the notion that commodity price drops are curbing inflation. Oh well, companies gave notice in May that they were going to raise prices and it seems like they actually managed to do so. Weekly jobless claims went back over 400,000 to 408,000 and the prior sub-400K number was just revised to 399,000…. lets count it almost 5 months of over 400,000 for all practical purposes. Besides that, the Gallup poll this week shows unemployment rising in August and that is a leading indicator ahead.
There has been a string of attacks in southern Israel, with mixed reports on the real fatality count. The fear is obvious: tensions will rise, yet again… And now there are reports that Obama is demanding that Syria’s Assad needs to step down.
Another day, another dollar less!
JON C. OGG
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