Friday, May 7, 2010
More Jobs, Markets Rattled, Gold Touches $1211
It is 5:54 AM. Top up your thermos with some delicious Raine's TGIF Red Label and let's go kick some cow poop in Kitchen's Meadow. That sure would beat trying to figure out these scary markets. Yesterday jitters returned to the marketplace big time; COMEX gold touched $1211, the the VIX or "fear index" hit 40.7, folks rioted in Greece and the U.K had an election that may result in a hung parliament.
To add to this drama, computers hijacked the broader markets for 5 minutes causing a nearly 1,000 point decline in the DOW - the largest point decline in its history. Nobody has quite figured out what happened at 2:42 PM (EDT) but it appears humans were no longer in charge. The Wall Street Journal reports that the $9.5 billion iShares Russell 1000 Value Index Fund went from $59 to around 8 cents in the blink of an eye. Scott Redler, chief strategic officer at T3 Capital Management said, "It happened so quickly, it was like a torpedo...It was mayhem." The ole Colonel was out walking his sidekick, Loquita, and missed all the excitement - sure doesn't buck up one's confidence in the modern marketplace of automated trading, pardner.
So let's have some good news before we hop in the truck and enjoy the afternoon away from these dad blame computers...as Roger Miller once said in a song, "I say dad blame anything a man can't quit!"
Here's the scoop on this mornings job report:
"The U.S. economy added 290,000 jobs in April, the largest gain since March 2006 and more than Wall Street forecast. That followed an upwardly revised 230,000 increase in March. The unemployment rate, calculated by surveying households instead of employers, rose to 9.9%, a sign that more Americans are starting to look for jobs.
Economists polled by Dow Jones Newswires were expecting payrolls to rise by 180,000. The March figure was originally reported as a 162,000 increase. Economists were expecting the jobless rate to remain at March's 9.7% level. Taking into account revisions to prior months, the U.S. economy added an average of 143,000 jobs a month in the first four months of the year." (WSJ, 5/7/2010)
I guess you have to be an economist to understand how going from 9.7% to 9.9% unemployment is OK but I can relate to all the zeroes behind a positive increase in jobs and that deserves a Colonel Yee-ha!
The broader markets are open now and it looks like another squirrley day. COMEX gold has backed down to $1198/oz which is still slightly up from yesterday's closing number after the dash above $1200/oz. The DOW is off another 62 points but Thompson Creek (TC) and POSCO (PKX) are at least showing some green in an otherwise down morning for the Eureka Miner's Grubstake Portfolio. There's some lunch meat in the frig, grab your hat and let's get rolling to the meadows buckaroos!
Enough talk, let's walk the walk:
4-WD is ON - rough roads in the marketplace; the VIX or "fear index" is in 30-40 territory; metals & miners remain on shaky timber with benchmark FCX still trading in the $60s well below its 200-day average of $75 (our new warning level), 10-year Treasurys are safely below 4% preserving a low-interest rate environment
The YELLOW light is on for Stable Markets with the VIX above the 30 level (what's this?)
The YELLOW light is on for Investor Confidence with the possibility of a >10% correction in the broader markets
The GREEN light remains turned on our Fuel Gauge with oil below $80 (although this may only be a brief respite)
A ORANGE light is ON for possible adverse regulation/legislation: Mine Safety Violations, Miner's claim fee, Miner taxation, Cortez Hills, mercury emissions &
General Moly Mt. Hope Water Rights
Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)
NYMEX/COMEX: Oil is down $0.29 in early trading to $76.82 (June contract, most active); Gold is up $1.0 to $1198.3 (June contract, most active); Silver is up $0.135 to $17.650 (July contract); Copper is up $0.0035 to $3.1205 (July contract); Western Molybdenum Oxide sits at $17.75, LME moly 3-month seller's contract moves up to $18.14
The DOW is down 62.65 points to 10457.67; the S&P 500 is down 10.34 to 1117.81. The miners are mostly down:
Barrick (ABX) $43.41 down 0.62%
Newmont (NEM) $54.48 down 0.29%
US Gold (UXG) $3.50 down 0.28%
General Moly (Eureka Moly, LLC) (GMO) $3.69 down 1.60%
Thompson Creek (TC) $10.58 up 2.67%
Freeport-McMoRan (FCX) $66.69 down 3.39% (a bellwether mining stock spanning copper, gols & molybdenum)
The Steels are mixed, (a "tell" for General Moly & Thompson Creek):
ArcelorMittal (MT) $34.30 down 0.52% - global steel producer
POSCO (PKX) $101.71 up 0.67% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is down 0.52% to $1,343,514.42 (what's this?).
Write Colonel Possum at firstname.lastname@example.org for answers to your questions or to request e-mail updates on the market
Headline photograph by Mariana Titus