CAT Raises Forecast, Molybdenum Breaks $13

Morning Miners!

It is 6:07 AM and the ole Colonel keeps pinching himself. It seems I just keep writing good news stories lately and that's a little scary. As they say; don't trade the market you think should be, trade the one you have. The Colonel's "lackluster summer market model" just got run over by a CAT D-10 dozer! Although their profits are down 68% from last year (which is understandable), Caterpillar is bullish looking forward in their latest report:

"There is still a great deal of economic uncertainty in the world, but we are seeing signs of stabilization that we hope will set the foundation for an eventual recovery," said [Caterpillar] Chairman and Chief Executive Jim Owens, who noted improved credit markets and stimulus spending, particularly in China, as positive trends. (WSJ, 7/21/09)

Now you're probably thinking that doesn't sound all that positive but someone does; Caterpillar share price jumped over 20% in 2-days from $34 to $41 in early trading this morning. Then we got a pop yesterday in molybdenum prices from $11.50 to $13.25, a level 66% above the April lows of this year. I don't know if Tim Arnold of Eureka Moly, LLC is still in Alaska but I'll bet he's got tears of joy in his eyes wherever he is!


The other big news is Uncle Ben's visit to Capitol Hill this week which may put a slight damper on all this giddy-up go:

"In the first of two days of congressional testimony, Bernanke shed light on the toolkit the central bank can employ to unwind its crisis measures, but made clear to lawmakers that the economy remains too weak to start tightening monetary policy." (WSJ, 7/21/09)


Let's put the hat on the cat and walk the walk:

Oil is up $0.64 to $65.93 in early trading (September contract); Gold is up $2.8 to $951.6 (August contract); Silver is down $0.010 to $13.615(September contract); Copper is up $0.0185 to $2.4875 (September contract); Molybdenum is a drunken sailor at $13.25.

The DOW is up 44.52 points to 8892.67; the S&P 500, up 0.04 points to 951.17. The miners are mixed today:

Barrick (ABX) $35.55 down 0.11%
Newmont (NEM) $42.20 up 0.14%
General Moly (Eureka Moly, LLC) (GMO) $2.37 down 2.47%
Freeport McMoran (FCX) $58.63 up 2.86% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are mixed (a "tell" for General Moly):

Nucor (NUE) $45.54 down 0.60% - domestic steel manufacturing
ArcelorMittal (MT) $36.38 down 0.36% - global steel producer
POSCO (PKX) $93.30 up 0.50%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is up 0.84% to $1,058,563.42

Cheers,

Colonel Possum