A Melman Minute
By: Leonard Melman
July 31, 2008
Unfortunately, this will have to be a 'quickie" MM
this morning in order to catch an early ferry into Vancouver. However, as of
7:10 AM PDT, several important market moves have already taken place.
Financial markets in the USA have been hit with
three pieces of bad news and, as a result, have opened moderately to the
downside. These include:
-
Higher crude prices which have risen back to
the US$126 per barrel area
-
Sharply rising weekly unemployment claims
which are now at a five-year high
-
Reported GDP economic growth for the Second
Quarter 2008 came in at a lower-than-expected 1.9%. Forecasters had looked
for 2.4%.
As a result, the Dow opened more than 100 points
lower, but quickly trimmed those losses to about 60 points with the TSX down a
similar amount. However, the higher oil prices and weakness in the U.S. Dollar
have pushed the metals higher this AM with gold up about (all prices US$) $13 to
near $920, silver ahead by 30 cents to about $17.75 and platinum and palladium
both up as well. Currency markets, as noted, are showing some weakness for the
Greenback.
One chart we keep our eye on is the Canadian Dollar
as it would seem likely that it would reflect prospects for natural resource
development, which is Canada's greatest economic strength. In recent weeks, we
are seeing some new weakness in the C$ develop, but, for the moment, trading
seems to be confined to a range of about 97 cents to parity.
Must rush. More tomorrow.
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