Friday, June 4, 2010
Tetraphobia Grips Markets On Bad Jobs Report
It is 5:47 AM. Have a brimming cup of Raine's Red Label TGIF java...oh, avoid the fourth cup on the hook. You say you're not superstitious about the number four? Neither is the ole Colonel but days that start like this may alter my belief system. The number 4 (四) is considered an unlucky number in Chinese culture because it is nearly sounds like the word "death" (死). China is a major influence on the fate of metals & miners so maybe we should take note, it is after all the 4th day of June.
A few minutes ago the U.S. Labor Department released their monthly jobs report and it ain't pretty - watch for the number 4: 431,000 jobs were added in May instead of the expected 550,000 and 411,000 of these were temporary census jobs. The private sector only added a paltry 41,000 jobs in May after a whopping 218,000 in April. The news drove copper to 4-month lows and the euro to 4-year lows (although some of this is due to new debt worries bubbling up in Hungary). Enough "four" you? That's a bad Friday pun for even this old boy. Here's copper tumbling into bear country:
Leaving "fours" alone for a moment, the overall employment number notched down from 9.9% to 9.7%. The overseas markets are unimpressed and we're just opening here on our turf. Nuts - metals & miners are falling down mineshaft #4. Let's go sit with the happy little folks on the haystack in Mariana's headline photo, the weather is nice - have a beautiful weekend and we'll sort through all this global hubbub bright and early Monday!
For the brave (or masochistic) reader, let's walk the walk:
4-WD is ON - rough roads in the marketplace; The VIX or "fear index" remains in the low 30s, still above our 25 level threshold; metals & miners remain on shaky timber with benchmark FCX falling below mid-$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 YELLO light is turned on for Commodity Reflation with copper trading below $3/lb
The YELLOW light remains on for Stable Markets with the VIX above the 30 level (what's this?)
The YELLOW light remains on for Investor Confidence with the possibility of a greater than 10% correction in the broader markets
The GREEN light remains turned on our Fuel Gauge with oil below $80
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 $1.74 in early trading to $72.37 (July contract, most active); Gold is down $2.8 to $1207.2 (August contract, most active); Silver is down $0.321 to $17.610 (July contract); Copper is down $0.0710 to $2.9370 (July contract)
Western Molybdenum Oxide is at $16.00; LME moly 3-month seller's contract moves up to $17.01, LME cash seller moves up to $17.01 (hey, some good news...except this is yesterday's close).
The DOW is down 168.38 points to 10,086.90; the S&P 500 is down 17.30 to 1085.53. The miners are getting clobbered:
Barrick (ABX) $41.92 down 0.90%
Newmont (NEM) $54.08 down 0.44%
US Gold (UXG) $3.91 down 2.01%
General Moly (Eureka Moly, LLC) (GMO) $3.54 down 3.81%
Thompson Creek (TC) $9.19 down 2.21%
Freeport-McMoRan (FCX) $64.73 down 2.74% (a bellwether mining stock spanning copper, gols & molybdenum)
The Steels are melting, (a "tell" for General Moly & Thompson Creek):
ArcelorMittal (MT) $28.19 down 3,23% - global steel producer
POSCO (PKX) $93.38 down 4.85% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is down 2.11% to $1,308,051.81 (what's this?).
Write Colonel Possum at email@example.com for answers to your questions or to request e-mail updates on the market
Headline and series photographs by Mariana Titus