Friday was a quiet trading day that closed out a volatile week. Volume was very light once again, but market internals were quite strong. Breadth was positive by 1.8:1. The Euro rallied substantially on the session and triggered sizable moves in commodities, however, the major indices were unable to post big gains. Oil was 2% higher while copper closed 2.4% higher. The VIX once again traded down by a little over 1%. The VIX has now traded down in 12 of the last 13 sessions. Selling was heavy at the close and the indices finished with marginal gains of 0.1%. Stocks closed the week lower by 0.4% – not a bad performance considering the onslaught of bad housing news and overall volatility.
From Daily Futures:
U.S. Economy
The U.S. Commerce Department said that real GDP was up 1.4% in the fourth quarter of 2009 and up .1% from a year ago, roughly the same as last month’s estimate. The June 2011 eurodollars were up .025 at 98.48.
The National Association of Realtors said that existing home sales were at an annual rate of 5.05 million units in January, down 7.2% on the month and weaker than expected. The June U.S. T-bonds closed up 24/32nds at 117.22/32nds.
The University of Michigan’s consumer confidence index fell from 74.4 to 73.6 in February, weaker than expected.
Is this improvement? AIG said that it lost $12.3 billion in 2009, up from a loss of over $100 billion in 2008.
Grains and Cotton
The USDA said that China bought 113,000 tons of U.S. soybeans for 2010-2011. May soybeans were up 11.5 cents at $9.615.
May corn was up 5.75 cents at $3.89 with ongoing concerns about planting conditions this spring.
July wheat closed up 15 cents at $5.312, blamed on month-end short-covering.
Livestock
The USDA said that beef production totaled 2.08 billion pounds in January, down 2% from a year ago. Pork production totaled 1.81 billion pounds, down 11% from a year ago. April hogs closed up .67 at 72.80.
After the close, the USDA estimated this week’s beef production at 488.1 million pounds, down .3% from a year ago. Pork production was estimated at 437.3 million pounds, down 1.6% from a year ago. April cattle were up .17 at 91.92.
Coffee
According to Agrimoney.com, Fortis Nederland predicted that world production of arabica beans will exceed demand by almost 7 million bags in 2010-2011. May coffee closed up 1.40 cents at $1.3120.
Metals and Energies
April gold closed up $10.40 at $1,118.90 and May crude oil was up $1.48 at $80.01, helped by today’s weaker U.S. dollar. May copper finished up 7.40 cents at $3.2840.
Currencies
Japan’s Trade Ministry said that factory output was up 2.5% in January, better than expected. Retail sales were up 2.6% in January from a year ago, much stronger than expected. Japan’s Statistics Bureau said that the consumer price index was down 1.3% in January from a year ago. The March yen closed up .0034 at 1.1253.
Housing starts in Japan were down 8.1% in January from a year ago, but better than expected.
The U.K.’s Office for National Statistics said that real GDP was up .3% in the fourth quarter of 2009, but down 3.3% from a year ago. Also, its index of services was down 1.4% in December from a year ago. The March British pound closed up .0001 at $1.5245.
Eurostat said that consumer prices were up 1.7% in January from a year ago. The March euro jumped up .0077 to $1.3621, spurred by talk that Greece and Europe have agreed to a plan that will give Greece aid in return for cutting their budget deficit.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.