-- Posted Sunday, 29 May 2005 | Digg This Article

Market Analysis from CapitalUpdates.com:

Note:  All US markets are closed Monday in observance of Memorial Day.

Personal Income for April came in as expected at 0.7% and Personal Spending came in lower than the expected 0.8% at 0.6%.  No, that is not a misprint.  Americans actually did take in more than they spent last month for the first time since Microsoft’s dividend inflated incomes last December.  Personal Spending for March was revised up from 0.6% to 0.9%.  “The report's price gauge tied to spending patterns and excluding food and energy costs, Federal Reserve policy makers' preferred measure for tracking inflation, rose 0.1 percent last month and was up 1.6 percent from April 2004. The increase in prices is expected to keep central bankers raising their target interest rate by a quarter percentage point in coming months, economists said.”  The PCE Price index rose 0.4%, but the Core PCE Price Index of 0.1% for the month and 1.6% year over year is pretty tame inflation wise for this preferred fed indicator, and it soothed inflation fears.

The revised figure for May Michigan Sentiment came in higher than the expected 86.0 at 86.9 and April’s mark was revised up to 87.7 from 85.3.  Since April’s number was revised up, the current reading for May is the lowest mark in Sentiment in over 2 years.  High energy prices and worries over potential soft patches and housing bubbles are blamed for the recent downturn in sentiment.

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Oil traded higher overnight and this morning heading into a long holiday weekend that is expected to boost demand as many Americans hit the road and buy up gas around the country to start the summer driving season.  Oil gained $0.84 to $51.85 on Friday and is up $5.05 or 10.79% on the week.

Bonds traded mixed and near unchanged in a shortened trading session Friday, with tame economic data having little impact on traders looking to get an early start on the weekend.  The 10-Year Treasury note yield lost 0.008 points to 4.073% as the June 2005 US Treasury bond gained 1/32 to 116 14/32.  For the week, the yield is lower by 1.26% and the bond is higher by 0.4%.

The Dow, Nasdaq, and S&P started off the day mixed and spent most of the morning lower before moving slightly higher in afternoon trade to end Friday with small gains.  The Dow gained 0.05% to 10542.55 on Friday and is higher by 0.67% on the week.  The Nasdaq gained 0.22% to 2075.73 on Friday and is higher by 1.42% on the week.  The S&P gained 0.10% to 1198.78 on Friday and is higher by 0.8% on the week.  All three indices sit at over 2 month highs.

Among the big names making news in the market Friday were Qwest and MCI, Pfizer and Viagra, Amerindo’s Alberto Vilar, Fannie Mae, Viacom, CSFB and Alcan, AIG, Ford, and Lampert.

All eyes are on the French this weekend as they vote on the EU constitution.  A “no” vote is expected and is priced into the market, so if the French surprise the world and approve the EU constitution, expect the euro to rally broadly.  “Treaty supporters say rejection in Sunday's vote would kill the constitution and weaken France in Europe. Opponents say a "No" would force the EU to redraft the treaty, giving more protection for social services and workers.”

China remained firm Friday in response to Treasury Secretary John Snow’s testimony before Congress Thursday, saying they would take a cautious approach to reforms.

The U.S. dollar index fell from 7 month highs and lost 0.39 points to 86.46 Friday and is lower by 0.15 points on the week.  The euro index rebounded from 7 month lows Friday and gained 0.75 points to 125.83 and is higher by 0.38 points on the week.  The yen remained unchanged at 92.65 Friday and is higher by 0.28 points on the week.

This week’s economic reports:

There are no economic reports this next Monday with all US markets closed, so a busy economic week starts off at 10AM EST on Tuesday with Chicago PMI for May expected at 62.0 and Consumer Confidence for May expected at 96.0.  Highlights for the rest of the week include the ISM Index on Wednesday and jobs data on Friday.

Gold & Silver Report from GoldSeek.com & SilverSeek.com: 

COT Gold Report - May 27, 2005

COT Silver Report - May 27, 2005

Gold traded mixed and near unchanged in choppy trade both in overnight and early New York trade, but was able to find nice gains in late morning trade and ended the session with a gain of $1.80 to $419.30.  Silver also traded mixed and near unchanged over night, but was able to find nice gains throughout the New York session and ended the day with a gain of $0.13 to $7.27, a new one month high.  For the week, gold is higher by $2 or 0.48% and silver is higher by $0.33 or 4.76%.

Gold and silver equities gained throughout the day Friday, with many stocks ending at their highs of the day.  The new gold ETF’s traded a bit higher Friday morning before doubling their gains around noon EST as gold jumped in COMEX trade.  GLD and IAU also ended near their highs of the session.

For the week, XAU is higher by 7.1%, HUI is higher by 8.7%, GDM is higher by 7.59%, GLD is higher by 0.53%, and IAU is higher by 0.65%.

Gold & Silver Stock News Update from GoldReview.com:

More news surrounding the failed merger between Harmony and Gold Fields, AngloGold Ashanti’s second share subscription of Trans-Siberian Gold, Kinross Gold’s status updates on their late financial statement filings, ECU Silver’s update on sales at their Velardena property, and Sino Silver’s new CFO were among the big stories in the gold and silver mining industry making headlines Friday.

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- Written by Chris Mullen

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-- Posted Sunday, 29 May 2005 | Digg This Article

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