Stocks soared during today’s session as investors digested the Fed’s accommodative stance and positive retail sales data. The potential for a consumer recovery and high liquidity has investors anticipating further economic recovery. The S&P was up 2% on the day.
U.S. Economy
The U.S. Labor Department said that jobless claims were down 20,000 last week to 512,000, less than expected. The December 2010 eurodollars closed up .055 at a new contract high of 98.495 after the Federal Reserve said yesterday that the federal funds rate is likely to stay low “for an extended period.”
The Labor Department also said that non-farm productivity was up an annual rate of 9.5% in the third quarter, the largest gain in six years. Unit labor costs were down 3.6% in the third quarter from a year ago.
Grains and Cotton
The U.S. is enjoying another day of clear skies and mild temperatures. Yesterday’s 6 to 10 day forecast from the National Weather Service is expecting above average temperatures over the eastern two-third of the U.S. with above average precipitation in the southeastern U.S. December cotton closed down .70 at 67.41.
The USDA said that, as of last week, 2009-2010 exports of:
Corn remained up 12% from a year ago.
Soybeans improved from up 9% to up 10% from a year ago.
Wheat improved from down 35% to down 34% from a year ago.
Cotton improved from down 33% to down 31% from a year ago.
Even though wheat exports improved on the year, last week’s sales were the lowest in four months. December wheat finished down 8.75 cents at $5.122.
Brazil’s Ag Ministry said that they expect soybean production of roughly 63 million tons in 2009-2010, a little more than the USDA’s 62 million ton estimate. November soybeans dropped 28.5 cents to $9.67.
Livestock
The USDA said that weekly net sales of beef totaled 9,000 tons last week, down from 11,300 tons the previous week. December cattle ended up .10 at 86.35.
Coffee
According to Dow Jones Newswires, Brazil’s coffee crop is expecting hot and dry weather this week. December coffee ended up 1.35 cents at $1.4210.
Energies
The U.S. Department of Energy said that underground supplies of natural gas were up 29 billion cubic feet last week to 3.788 trillion cubic feet. Supplies are now up 11% from a year ago. December natural gas closed up 5.7 cents at $4.782.
Currencies
The Bank of England met and kept its interest rate unchanged at .50%, as expected. It also expanded its program of quantitative easing by 25 billion pounds. Also, the U.K.’s Office for National Statistics said that manufacturing output was up 1.7% in September, better than expected. The December British pound ended down .0007 at $1.6582.
Source: Daily Futures
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.
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