Daily Analysis – Commodities Close Dramatically Higher

SamTrader1

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Equities

Asian markets closed mostly lower as the Kospi fell .7%, the ASX 200 dropped 1% and the Hang Seng slipped .4%. China’s Shanghai Composite rallied .9%. Japanese markets were closed for a holiday.

In Europe, the DAX rose .5% while the CAC40 inched up less than .1%. UK markets were closed due to the royal wedding, contributing to very light volumes across the continent.

US markets posted modest gains fueled by upbeat earnings. The Dow rose 47 points to close at 12810, and the S&P rose .2%. The VIX ended the week at 14.77, indicative of a very low level of market fear.

Caterpillar rose 2.5% after beating earnings and raising its yearly outlook. Microsoft shares tumbled 3% as a drop in Windows sales raised concerns about the health of the PC sector, even though the company beat earnings and sales forecasts.

Blackberry maker, Research in Motion, plunged 14% after lowering its outlook for earnings and revenues.

Treasuries and Commodities

Bonds rose moderately, with 10-year notes up 6/32 to yield 3.29% and 30-year notes up 9/32 to yield 4.4%.

Commodities rallied strongly, with significant gains almost across the board. Crude oil climbed 1.07 to 113.93, and natural gas rallied 2.8% to 4.698. Gold jumped 25.20 to 1556.40, a new record high, and silver added 2.2%, rising to 48.584. Copper continued to under-perform, dropping 1.9% to 4.1655.
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Agricultural futures posted particularly strong gains, as corn surged 4.3%, wheat rallied 3.5%, and rough rice soared 4.9%.

Currencies

The US Dollar’s slide continued on Friday, as the Fed’s loose money policy continues to erode the greenback’s value. The Swiss Franc led the gains, surging 1.1% higher to .8642, and hit a new record high of .8626. The Australian dollar rose .4% to 1.0972, a record high, and the Canadian Dollar gained .6% to .9452. The Yen and Pound both rose .4%, while the Euro eased .1%, reversing from early gains.

Economic Outlook

Economic data was mixed. University of Michigan’s Consumer Sentiment declined to 69.8, slightly below expectations, and Chicago PMI dipped to 67.6 from 70.6 in March, lower than expected. Personal Income rose by.5%, more than expected.

Monday’s reports will include the ISM Manufacturing Index and Construction Spending.
 
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