Gold is up 3,63% so far this year and the precious metal is trading at $1248,5 at the moment. That is a nice bounce off of the $1200 level. It is not so good for the Dow, which is down 33 points after the bad news on friday. The job growth surprised everyone as Nonfarm payrolls rose only 74,000 in December. Some people are shocked. The S&P 500 ended up 11 points. U.S equities finished the week mixed on the news.
Raw-material prices was down 3,2% this year and this is the worst start to a year since 2007. China is the biggest user of everything, from cotton to pork to zinc and the producer prices declined in December for a 22nd straight month, and this is the longest decline since the Asian financial crises in the 1990`s.
Much has been done of the sharp fall in the unemployment rate to 6,7% and this keeps the Fed on course to start the tapering at this months January meeting, which is January 28-29.
The labour participation rate is at a 35 year low, at 62,8%. It is not a positive thing that so many people have stopped looking for work. Are they really gonna start tapering now?
Hedge funds are cutting their bullish commodity wagers now on signs of slowing economic growth in China and surplus supply.
This year started bad with the major indices trading down the first trading days of the year. This bad starts followed by bad news with only 74000 (non-farm) jobs created in December.
The markets is not as strong as we had thought it might be, and we need some good news now to kick-start the markets again. If not we could lose key support lines. A lot of information is coming out this week.
Very important news is coming from retail sales, housing data, the Fed Beige Book, and consumer sentiment. Earnings reports is on the way too. Bank of America (BAC), Goldman Sachs (GS), J.P. Morgan Chase (JPM), as well as general electric (GE), Wells Fargo (WFC) and Intel (INTC) are some of the large amount of earnings data that will be important to the market this week.
We need a solid week to hold onto technical support.
News today: Federal Budget Balance at 2:00pm (forecast 44,3B – previous -135,2B).
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