Farewell, Adieu, Auf Wiedesehen, Good-bye

LAST BLOG BY DR. BOB

Stocks rose from the dead; the Dow added back 1.34% to 12,276 and markets overseas rose. The dollar was up to  ¥118.23/$ and $1.3115/€. Oil prices dropped 2.58% to $60.05. Gold stabilized at $650.00. On HedgeStreet, oil and the euro dominated trading.

Several important releases are coming this week: the current account, PPI and core, CPI and core, and industrial production and capacity utilization.

LAST BLOG – CONTACT INFO

If you have current issues to discuss, write to robert.dubil@business.utah.edu. I’ll shoot you an e-mail back. Over and out.

Markets Rocked by a Selloff

LAST WEEKLY BLOG BY DR. BOB

Stock markets around the globe were rocked by a sharp selloff sparked by, depending on who you believe, the drop in China, Alan Greenspan’s recession prediction or a UFO landing in western Texas. After a more than 100% rise of the Shanghai index last year, a 10% correction is nothing for a market with a closed capital account. Greenspan said that there is a probability of a recession, not that it will happen for sure. So that leaves the UFO as the most likely explanation. The more so that it wouldn’t be the first time that one landed in Texas … More importantly, the 10-year Treasury yield dropped 16bp to 4.515% and the yen staged a huge 3.51% rally to ¥116.85/$. The euro rose only 0.21% to $1.3194/€. Oil prices rose another $0.50 to $61.64. Gold dropped an incredible $42.20 to $641.50 and no one talked about it. A definite slowing is happening in the U.S. economy, and the yield curve has inverted even more – the 3-month Tbill yields 5.122%, the 30-year Treasury 4.651% – but an economic meltdown will not happen. This week has economic data relevant to the plight of our economy. On HedgeStreet, oil dominated trading capturing 30% of the volume.

ECONOMIC RELEASES THIS WEEK:
Monday: ISM Services 57.0.
Tuesday: Productivity +1.7%, orders -4%.
Wednesday: Crude inventories, prior 1.421m.
Thursday: Initial claims 335K. Non-farm payrolls 100K, unemployment 4.6% and the rest unimportant. Trade balance -$60.0bn.

CHINA TO BE THE BIGGEST POLLUTER  … GORE’S CARBON FOOTPRINT … JOLIE TO ADOPT AGAIN … McLATTE

China will be become the biggest emitter of CO2 by 2009. But the Europeans will not stop blaming the U.S. for melting Greenland, speaking English and forcing them to eat junk food … Al Gore got an Oscar (surprise!) for his ‘inconvenient truth’. Meanwhile Al apparently enjoys a giant pool at his Tennessee home, heated by conventional heaters using more energy per month that a family of four over a year. Good for him! … Angelina filed papers in Vietnam to adopt another baby. What’s wrong with a poor baby from Philadelphia? … McDonald’s will add sub-$3 lattes to its menu this year. They’ll be microwavable in 20 sec, have 60g of trans fat and you’ll be able to supersize them to 64 oz for 29 cents. God help us all.

LAST BLOG – CONTACT INFO

This is my last regular weekly blog. If you have current issues to discuss, send me an e-mail to robert.dubil@business.utah.edu. I’ll post answers here once a month or shoot you an e-mail back. Next week’s blog will be short and final.

Oil Rise Will Temper Growth

OIL AND GOLD UP AGAIN

Oil prices shot up 2.95% last week to reach $61.14. Gold added 2.14% to reach $683.10. That sent U.S. stocks down; the Dow lost 120 to close at 12,647. However, markets overseas were up. The Nikkei reached a seven-year high at 18,188; the FTSE closed at 6401. The markets in China and Taiwan were closed for the Lunar Year. The dollar slid to $1.3166/€ against the euro and rose to ¥121.09/$, despite the move by the BofJ to raise the rates. Continued suprime troubles and Iran worries drove the Treasurys up slightly; the 10-year yielded 4.678%. The rise in oil prices, if it is sustained, may shave the healthy GDP gains this year, and lets hope that the rise in gold does not augur resurgent inflation pressures. We may end up with slower growth, but more inflation, despite recent rosy Fed pronouncements. On HedgeStreet, oil and gold dominated the volume; silver and the euro were active too. New real estate contracts were introduced.

ECONOMIC RELEASES THIS WEEK:
Tuesday: Durable orders -2%, consumer confidence 109, existing home sales 6.24m.
Wednesday: Q4 GDP 2.4%, deflator 1.5%. New home sales 1.09m. Crude inventories published, prior 3.694m.
Thursday: Income 0.3%, spending 0.4%. Initial claims at 325K. Construction spending -0.4%. Auto sales 5.1m, trucks 7.3m, total down 0.3m. ISM index at 50.0.

OSCARS

Who cares… The 30th annual National Wild Turkey Convention at the Gaylord Opryland Resort in Nashville drew 5,000 visitors. Diamond Rio entertained at the award banquet. Comedian T. Bubba Bechtol and champion caller Preston Pittman attended. A live auction of guns and jewelry was held.