Thursday, September 8, 2011

Great news

     We only got 45 billion poorer last month!

     A report from the Commerce Department showed the trade deficit narrowed to 44.8 billion in July down from 53 billion in June.  The trade deficit is the difference between what we export and import in a given month.  Exports to other countries rose 3.6% to 178.0 billion while imports dropped .2% to 222.8 billion.

     "U.S. exports rose 3.6 percent to a record $178.0 billion, driven by record shipments to countries in South and Central America and higher demand from China and major oil producers. Records were also set for two large categories, goods and services, as well as for capital goods and autos," said Yahoo.

     The weak US Dollar and continuing expansion in the global economy is probably helping our exports. 

     Declining imports were driven by lower oil prices.

     In other economic data, new claims for unemployment unexpectedly rose last week to 414,000 from last weeks upwardly revised 412,000.  New claims data measures people who have filed new claims for unemployment in the last week.  Continuing claims dropped to 3.72 million from 3.75 million in the last week.  There are over 7 million people receiving unemployment benefits in the US right now.   Stock futures dropped on the news.

     We need new claims for unemployment to drop below 400,000 to see sustained positive job gains.

     Stocks opened down today after a huge gain yesterday.  As of 7:21 AM PST, the DJIA was down 21 pts.  Gold bounced back and was up over 2%.  Oil was up .2% to near 90 a barrel and 10 year treasury bond yields were slightly lower to 2.01%.

     European stocks finished mostly higher with the London FTSE up .4% and the German DAX up .1% but the French CAC up .4%.

     The Euro dropped 1% to below 1.40 versus the dollar as Jean Claude Trichet struck a more neutral tone saying economic conditions had deteriorated in the Eurozone and the need for further rate hikes was diminshed.  Trichet had been extremely hawkish over the past year or so raising interest rates in the Eurozone to combat inflation which had contributed to a strengthening Euro.  Mr. Trichet did not signal that he would cut rates to spur growth however, preferring to have a wait and see attitude about future economic data.

STOCKS
     Gold- GLD is up 2% today bouncing back from yesterday's selloff.  From what I can gather, gold sold off yesterday because the Swiss franc sold off.  They had been trading together for awhile.  It made no sense to me because the swiss are going to have to print a shitload of francs if they want to keep their currency peg.  This is bullish for gold of course.  I expect gold to keep rising although there is strong resistance at 1920.  It may keep bumping its head on that level for awhile but eventually it will break through.  Dip buyers stepped in quickly yesterday and today on gold.

     Apple-  AAPL is up nicely in a mixed tape today.  I feel I have missed my opportunity to buy AAPL and don't want to chase it up here.  I think we are in a trading range market and it's best to sell the rips and buy the dips.  Right now we are close to the top of the range so I am looking for some more selling pressure to come in soon.  If we break out past 392 on good volume, I will buy some.

     Bank of America- After yesterday's huge rally, BAC has found some profit taking today down 3.74%.  It was up almost 8% yesterday.  It's probably time to start accumulating banks right here if you have a long time horizon.  Next year at this time BAC is probably much higher.  Me, I don't like to take too much risk so I won't mess around with banks.

UPDATE
     Well the market did not have a pretty finish today.  Ben Bernanke gave a speech today and shortly before he started speaking the market started selling off.  We closed near the lows of the day down 121 pts which doesn't bode well for tomorrow.  Gold rallied almost 3% closing at 1870 and oil closed down .5% to 89. 

     
    


16 comments:

  1. Time for everyone to be more self sufficient

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  2. its times like this im glad i dont live in the US but then again my country is probably in worse debt considering the population..we had to get bailed out by the IMF..

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  3. I think I'll ask the U.S. government to give me a million dollars. It's not like it'll miss a million, considering it lost 45 billion in a month...

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  4. I blame the Federal Reserve. Those evil bastards.

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  5. Interesting, interesting.

    I have a quick question for you, in the situation where a stop/limit sell order needs to have the stop and limit the same would you be better off with just a stop sell order instead?

    If you could reply with a comment or an email that be great.

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  6. @DWei

    To be honest, I do not know much about the ins and outs of stop/limit sell orders because I do not use them. But from what I can gather it would be better to use a stop/sell order when there is a specific price that you want to sell at. Regular stop loss orders subject you to gap risk. For example lets say you have a regular stop order for Apple at 380 and it's trading around 385 right now. If some bad news comes out after the market closes say they miss earnings and the stock gaps down 30 bucks the next day your stop loss order will turn into a market order and you will sell at the open the next day.

    If you have a stop limit order and you set your limit at 380 and your stop at 380 and the stock gaps down to 350 the next day, you will NOT sell because the price is below your limit price. You will have a chance to wait to see if your stock comes back. Of course it could go lower.

    I would say in most cases the two orders would be the same but if there is headline risk in the market and you don't want to be stopped out at a real low price then it makes sense to use the stop limit order.

    I hope I answered your question. Like I said, I do not know the ins and outs of stop limit orders, I just did some quick research on google about them.

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  7. honestly if we would actually get serious about alternative energy a lot of the trade deficit would go away because we wouldn't be importing as much oil

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  8. I see. That's the gist of what I understood as well. Unfortunately the TSX only allows stop/limit orders where the two are the same so that appears to defeat the purpose of it if you ask me.

    Thanks again though.

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  9. Good news for me, suckers. I found 10 dollars in the street. Take that Benny.

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  10. Do it like the Chinese, keep printing til the Chinamen start buying Americans instead of us buying from them.

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  11. Great, only 45 billion poorer! Sounds a lot but I don't think that its that many, in the trade world^^

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  12. @ashlyyy yeah perhaps i am overly simplifying things. It doesn't really work like that. There are more ways for a country to get rich or poor than trade.

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