Good Morning,
While Friday’s Jackson Hole symposium,
highlighted by Chairman Bernanke’s speech, didn’t result in any
definitive stimulus action by the Fed, Mr. Bernanke’s rhetoric did give
investors reason to believe that QE3 is on the horizon. This
promptly pushed the precious metals
complex higher and with the light volume heading into the Labor Day
weekend gold quickly tested the $1700 level while silver breached $32.
Platinum is now above the $1550 mark and palladium was able to pare
losses from earlier
in the week and is now trading above $635. No longer is a crumbling
economic foundation the parameter by which the Fed will decide on
further monetary easing but a merely stagnant economy seems like it will
be enough to tip the scales in favor of QE come the
next FOMC meeting on September 12t– 13th.
Chairman Bernanke cited unemployment, currently at 8.3%, as a cause for
concern and, come Friday’s government jobs data, could further support
the case for an economic booster shot. In the broader
global economy, China’s government manufacturing index showed a decline
to 49.2 from 50.1 indicating that factory activity is contracting.
However, hopes of progress on the European front seem to have
counter-balanced the concern, for now, ahead of the ECB’s
highly anticipated meeting on Thursday. ECB President Mario Draghi is
expected to release details of a bond buying program in the region aimed
at thwarting fiscal collapse in peripheral economies and hopefully
kick-starting a rally out of the current economic
rut. The U.S. Markets will take in the ISM Manufacturing Index at 10:00
am EST followed by July construction spending figures. Auto Sales will
come out throughout the day. Have a great day!
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