Markets here in the U.S. are looking a bit rosier following Friday’s

Markets here in the U.S. are looking a bit rosier following Friday’s relatively cordial “Fiscal Cliff” discussion between the President and lawmakers. This has given hope to investors that Congress will be able to keep the economy from going over the edge and slipping back into recession. The combination of spending cuts and tax increases will take effect on January 1^st if the President and lawmakers don’t find some common ground before then. Violence in the Gaza strip, between Israel and Hamas, has the world on edge and it doesn’t appear the two sides are willing to talk it out. Gold and oil have pushed higher as the conflict threatens to spill into all-out war. The yellow metal is up nearly 1% after closing Friday’s session at $1715.Gold is now trading at $1730. The rest of the precious complex looks to be riding gold’s coat-tails with a little help from thin trading conditions to start the Holiday shortened week here in the States. Existing home sales will be released at 10:00 am EST. Have a great day!

Hostess Brands, the maker of the beloved Twinkies, intends to close up shop

We can forget about the fiscal cliff or the Mayan prediction of the apocalypse…Hostess Brands, the maker of the beloved Twinkies, intends to close up shop. The world might as well just end now! Fortunately, we don’t have to panic just yet as the company will be liquidating assets and Twinkies will likely live on…Unfortunately, we can’t exactly forget about the looming fiscal cliff. U.S. equities are poised to move higher to end the week as rumor has it that the President and his administration may have an idea of how to avoid the cliff. As they say though, talk is cheap and until action is taken investors will remain cautious. President Obama will meet with lawmakers today to discuss the impending economic turmoil and investors will gauge the tone of the talks for an idea of whether or not the two sides will be able to make progress before the end of the year. The precious complex remains under pressure in early trading. Platinum continues to decline on the back of reports that striking miners have returned to work at the world’s #1 platinum producer, Amplats. The white metal closed yesterday’s session at $1573 but ran into more selling in the Asian markets and is now trading at $1555.50. Palladium has followed suit and now trades at $628 after closing yesterday’s session at $631. Have a great weekend!

Platinum’s march toward $1600, following forecasts of deficits in the wake of continued

Platinum’s march toward $1600, following forecasts of deficits in the wake of continued labor strife in South Africa, has been reversed after reports that workers are returning to the mines at Anglo American Platinum. Amplats, the world’s #1 platinum producer, said workers began returning to work today and that it would take about a week for production to resume. Platinum closed yesterday’s session at $1591.60 but is now trading more than .75% lower at $1578. Palladium looks to have slowed its recent surge as the metal is now trading modestly softer in the early session, down .4% to $638. U.S. initial jobless claims soared 78,000 to 439,000 last week but the jobs data needs to be taken with an even bigger grain of salt than normal as the numbers are skewed by the aftermath of Hurricane Sandy and could be for quite some time. In other data released today, October CPI rose just .1%. Philly Fed manufacturing data will be released at 10:00 am EST. Across the pond, Eurozone GDP readings have indicated that the region is in recession yet again. Eurozone GDP in the third quarter contracted .1%. Have a great day!

I don’t know why everyone’s worried about the fiscal cliff.

I don’t know why everyone’s worried about the fiscal cliff. According to the Mayan’s we won’t even get to Jan. 1, 2013! However, regardless of which catastrophic event does/does not happen, there’s always some economic data to keep us preoccupied.  Earlier this morning the Commerce Department reported a decline in U.S. retail sales in October. Hurricane Sandy is said to be the primary culprit of a .3% decline in retail sales last month. The massive storm that battered the north east is said to be the cause of a 1.5% haircut in auto sales for the month of October. Data from the Bureau of Labor Statistics was expected to have shown a .1% increase in the PPI but that figure actually showed a decline of .2% for the month of October. Later today we’ll get the meeting minutes from the FOMC’s last meeting but no one is expecting anything surprising. The precious complex is trading modestly higher in the early part of today’s session with the exception of palladium. The white metal is continuing to surge higher after yesterday’s >4% move higher following JM’s forecast of a 915,000 ounce palladium deficit. Palladium is up 1.35% on the day, now trading at $645. However, the recent uptick may provide a good opportunity to lock in profits so a correction is not out of the question. Have a great day!

As the President of the United States and lawmakers from both parties play chicken with the

As the President of the United States and lawmakers from both parties play chicken with the proverbial freight-train, the “fiscal cliff”, investor sentiment remains cautious at best. While the consensus seems to be that a deal will be reached, it may not come until the very last minute and, until then, the markets will be left to speculate on the “what if” scenario should the clock strike zero hour. In Europe, Greece’s passing of a budget over the weekend was only half the battle, or perhaps a quarter of the battle, as a meeting to discuss the next tranche of bailout funds for the struggling country has been pushed to November 20^th indicating that the regions finance ministers remain uncertain about Greek staying power in the European Union. A €5 billion debt repayment, due on Friday, has been rolled over but at some point Greece is going to have to pay the piper and that will weigh heavily on any decision by EU leaders to release funds. The euro has slipped roughly .25% and now trades at $1.267.  The precious complex is mixed with gold and silver trading lower and platinum and palladium trading higher. The white metals are seeing support from the release of JM’s Platinum 2012 Interim Review that indicates the platinum market will go into a deficit of 400K t.o. on the back of supply disruptions and lower recycling volumes. Platinum is up nearly 1% while palladium is up more than 1.25%. Have a great day!

 

The trifecta of regional fiscal uncertainty continues

The trifecta of regional fiscal uncertainty continues to weigh on the minds of investors. Japan, the world’s #3 economy, appears on course for recession following reports that the island nation’s economy shrank by 3.5% last quarter. The data comes as a surprise to many economists as the second quarter was revised up to a .3% growth rate. Japan’s Nikkei 225 lost nearly 1% by the close of trading in Asia. In Europe, Greek lawmakers passed a 2013 budget over the weekend, a big step towards persuading lenders to free up more bailout funds. However, with a €5 billion payment on the books for this week, those lenders might not be pulling out the checkbooks just yet. Here in the U.S. consumers seem confident following Friday’s report from the University of Michigan. However, President Obama is scheduled to meet with lawmakers from both sides of the political aisle to discuss the impending “fiscal cliff” and, depending on the amount of political chest-thumping that could result, the confidence may not last long. The precious complex is mixed this morning. Gold is up .3% and well supported at the moment as current economic conditions lead many to believe that the money-printing by the fed won’t end anytime soon. Platinum is trading up .5% on the back of continued labor issues in South Africa. Palladium is relatively flat in early trading. Have a great day!

 

Better than expected data out of China in the overnight sessions had investors hopeful of a change

Better than expected data out of China in the overnight sessions had investors hopeful of a change in direction following two straight days of declines in equities markets. However, better-than-expected industrial output and retail sales in the world’s #2 economy were not enough to ease concerns about global fiscal woes, particularly the upcoming “fiscal cliff” here in the U.S. The Congressional Budget Office has gone so far as to predict that, should the U.S. go over the edge, the economy could see a drop in GDP of .5% and unemployment over 9% by the end of next year. The precious metals complex is pushing higher in early trading with gold up  .5% from yesterday’s close, now trading at $1736. Platinum is the big gainer so far, up nearly 1.5% and now trading at $1565 on the January contract. University of Michigan’s November consumer confidence index will be released later this morning. Have a great weekend!

U.S. stock markets reacted to the U.S. presidential election with a steep sell-off

 

U.S. stock markets reacted to the U.S. presidential election with a steep sell-off as all 3 major U.S. stock indices shed more than 2% on the day. The DJIA cut more than 300 points to end Wednesday’s session below 13,000. Needless to say, gold was well supported and closed yesterday’s session at $1714 and is modestly higher in early trading this morning. However, according to some, this reaction is not all that uncommon following presidential elections. The question is, where do we go from here? With a virtual mirror image of the previous governing body of the U.S. of A, some are skeptical as to whether progress will be made this time around or whether it will be more of the same shenanigans. One thing remains clear, the fiscal cliff is fast approaching and whether we end up the Road Runner or Wile E. Cayote will depend in large part on the ability of both sides of the isle to extend the Olive Branch… with sincerity. Weekly jobless claims here in the U.S.  shrunk to 355,000 last week but many are expecting a revision next week as a large swath of the Northeast continues to recover from a one-two punch from mother nature. In Europe, Greece moved one step closer to securing the bailout funds needed to stave-off financial collapse. The country’s ability to pass steep austerity measures has eased concerns, for now, of a “Grexit” from the EU. Have a great day!

The precious complex is moving higher in early morning trading after a sharp sell-off

The precious complex is moving higher in early morning trading after a sharp sell-off to end last week. The downward momentum across the financial landscape, that was apparent through much of last week, was finally too much to bear on Friday and investors took the opportunity to lock in profits/cut losses and hit the sidelines in preparation for tomorrows U.S. Presidential Election. The Institute for Supply Management will report its service-sector index and more corporate earnings are on tap for the day but none of it really matters as investors are in wait-and-see mode at the moment. After the decision of who will be Commander-in-Chief for the next 4 years, the next big question will surround the “Fiscal Cliff” that is fast approaching. Expect thin trading conditions both today and tomorrow, which could lead to some volatility in the markets. However, until the results of the election are clear we shouldn’t see any significant movement in either direction. Have a great day!

The Chinese government’s official PMI data

The Chinese government’s official PMI data, released overnight, showed the country’s manufacturing sector moving back into expansion mode. The reading came in at 50.2 for the month of October, up from a September reading of 49.8. Any reading above 50 is considered good. While the sentiment boosting data from the world’s #2 economy helped the precious complex maintain yesterday’s end-of-month rally, and even press a bit higher this morning, markets are in wait-and-see mode ahead of tomorrow’s crucial U.S. government jobs data. Other employment data, released earlier this morning, showed planned job cuts jump 41% to 47,724 in October, the private sector added 158K jobs and weekly initial jobless claims fell to 363,000 last week. The deluge of economic data continues with reports on manufacturing, consumer confidence, construction and auto sales throughout the day. Have a great day!