-- Posted Wednesday, 15 June 2005 | Digg This Article

Market Analysis from CapitalUpdates.com:

More tame inflation data started off the day Wednesday morning with CPI for May coming less than the expected 0.1% at -0.1%, its first fall in 10 months,  and Core CPI coming in less than the expected 0.2% at 0.1%.  With both Core PPI and Core CPI coming in at just 0.1% the last two days, inflation fears seem to have eased regardless of what energy prices may be, as the Core number strips out food and energy.

Business Inventories for April came in less than the expected 0.4% at 0.3%.  Sales increased 1.2%.

The New York Empire State Index for June came in higher than the expected 1.0 at 11.7, rebounding from last month’s mark of -11.1 which was the lowest in 2 years.  The report shows that manufacturing is now believed to be expanding in New York State.

Treasury International Capital data (TIC data), or net foreign purchases of both domestic and foreign long-term securities from U.S. residents for April, were just $47.4 billion.  That is up from March’s $40.6 billion mark, but still less than April’s Trade Deficit of $57.0 billion.  March’s Trade Deficit was $53.6 billion, also much higher than March’s TIC data of $40.6 billion.  This means that there were not enough foreign inflows to fund the trade deficit for the second month in a row, a bearish fact for the US dollar.

Capacity Utilization for May came in higher than the expected 79.3% at 79.4% and Industrial Production came in higher than the expected 0.2% at 0.4%.

The fed’s Beige Book noted today that economic growth was on track and inflation remained moderate through the end of May.  One notable change in the book was that price pressures were now seen as moderate, after saying the prior month that price pressures had accelerated. 

Tomorrow at 8:30AM EST brings Initial Jobless Claims for 6/11 expected at 330,000, Building Permits for May expected at 2.106 million, and Housing Starts for May expected at 2.05 million.  At noon is the Philadelphia fed for June expected at 10.0.

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Oil traded higher this morning as OPEC confirmed a production quota increase of 500,000 barrels per day, though many remain skeptical as to whether they can they meet demand, regardless of declared production increases.  Do they have room to increase capacity since many are already producing at full capacity, and does the world have the refining capacity to deliver that oil to the market?  It is these questions and others that have held oil higher recently.

This morning’s inventory report showed that crude inventories fell 1.8 million barrels, gasoline inventories fell 900,000 barrels, distillates built by 2.5 million barrels, and heating oil built 1.4 million barrels.  This was a surprise draw down in crude inventories, but a nice build in distillates, making for a mixed report.  Traders, though, concentrated on the surprise draw down in crude inventories and pushed oil prices higher throughout the day.  Oil traded as high as $56.75, a two month high, at one point, but fell back off a bit to end with a gain of $0.57 to $55.57.  Prices are now just $2.71 short of the record $58.28 hit on April 4^th.

The 10-Year Treasury note yield traded mixed but mostly higher on this morning’s economic data, but fell off by the end of the day to find its first loss in 6 days.  The yield lost 0.012 points to 4.115% as the June 2005 US Treasury bond gained 5/32 to 116 7/32.

The Dow, Nasdaq, and S&P started off the day higher on signs of subdued inflation, but all three indices soon fell from their near 3 month highs as oil prices and interest rates rose, but all three indices climbed backed in the last hours of trade as oil prices and interest rates fell from their highs of the day.  The Dow gained 0.18% to 10566.37, the Nasdaq gained 0.28% 2074.92, and the S&P gained 0.22% to 1206.58.

Among the big names making news in the market today were the Philadelphia Stock Exchange, Bristol-Myers Squibb, Tommy Hilfiger, Lazard, MCI, Haier and Maytag, Bear Sterns, Goldman Sachs, and JPMorgan.

The U.S. dollar index fell from 9 month highs and lost 0.58 points to 88.70.  The euro index rebounded from 9 month lows and gained 0.75 points to 121.18.  The yen gained 0.10 points to 91.54.

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

Gold and silver traded mixed and near unchanged overnight before starting gains in late London trade and continuing those gains in morning New York trade.  Both metals held their gains throughout the New York session to end nicely higher with gold gaining $1.60 to $428.70 and silver gaining $0.06 to $7.30.

Gold and silver equities climbed about 2% higher at the open and traded mixed from there, but remained higher the entire day to end with nice gains.

More analysis from Peter Spina, contributing author to The Gold Forecaster, see subscription information below in order to receive much more in-depth analysis on the gold and silver markets:

Gold & Silver Stock News Update from GoldReview.com:

There were no major companies in the gold and silver mining industry making headlines today, though there were plenty of Junior Mining & Exploration Stocks making news, as always.

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- Written by Chris Mullen

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-- Posted Wednesday, 15 June 2005 | Digg This Article

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