Thursday, October 29, 2009
The Recession is Over (Well...sort of)
It is 5:58 AM and we have a strong pot a'brewin' this morning. Let's start out with some good news - the recession is over. Well, sort of if you take stock in official numbers. The Commerce Department reported this morning that the U.S. gross domestic product (GDP) rose by a seasonally adjusted 3.5% annual rate from July through September. GDP is the broad measure of economic activity in the United States. As reported in the Wall Street Journal:
"The economy's growth was the first since the second quarter of 2008 and serves as an unofficial confirmation that the longest and deepest recession since the Great Depression has ended. The GDP gain was driven by consumer spending, which rose by 3.4%. Economists said the massive stimulus injected by the U.S. government, such as the cash for clunkers program, helped boost consumer spending." (WSJ, 10/29/2009)
The best news was that the GDP number beat economist's estimates who had forecast a 3.2% GDP growth (Dow Jones Newswires survey). Economists are the only working group in America that can boast full employment. That is, of course, the downside. High unemployment elsewhere and diminishing stimulus will extend recovery over many months with expectations of lack luster growth.
Nuts. Let's be thankful for any good news after the beating commodities, miners and steel makers took yesterday. The markets are back on their feet this morning with the encouraging GDP news. General Moly was up nearly 14% in early trading after coming perilously close to $2 yesterday. Phew! If you followed the canine logic in yesterday's article, it appears Henry the Bold is back in charge and Charley the Protector is taking a needed rest (Dogs, Bears, Coyotes and a little Lithium).
Enough talk, let's walk the walk:
4-WD is ON - the VIX or "fear index" is is above 25 ,off-road market conditions are expected to continue (what's this?)
Yellow light is ON for possible adverse regulation/legislation (mercury emissions)
Yellow light is back on for our Fuel Gauge as oil just entered $80 territory again (9:42 AM PDT update)
Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)
Oil is up $1.56 in early trading to $79.02 (December contract); Gold is up $7.1 to $1037.6 (December contract, most active); Silver is up $0.245 to $16.485 (December contract); Copper is up $.0565 to $2.9870 (December contract); Molybdenum is steady at $11.75.
The DOW is up 98.70 points to 9861.39; the S&P 500, up 13.29 points to 1055.92. The miners are break dancing:
Barrick (ABX) $36.19 up 4.66%
Newmont (NEM) $42.58 up 2.60%
General Moly (Eureka Moly, LLC) (GMO) $2.30 up 11.1%
Freeport McMoran (FCX) $76.72 up 4.45% (a bellwether mining stock spanning gold, copper & molybdenum)
Steel stocks are pouring metal, (a "tell" for General Moly):
Nucor (NUE) $40.95 up 2.50% - domestic steel manufacturing
ArcelorMittal (MT) $35.61 up 4.28% - global steel producer
POSCO (PKX) $106.98 up 1.56% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is up 3.31% to $1,174,346.10 (what is this?).
Headline Photograph by Mariana Titus