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.
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.
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.