Friday, November 30, 2007
Confidence Returning
Markets finished almost flat Thursday. The Dow gained 22.28 points to 13,311.73. The SPX added 0.70 points to finish the session at 1,469.72.
Oil and economic news dominated the session.
This week has seen a decline in energy prices due to rumors that OPEC is set to raise production quotas at their meeting next week. That has given the markets some respite. However, crude rose more than four dollars this morning on news fire damaged a pipeline between Canada and the U.S. By the end of the session, traders figured this was in fact no big deal and oil ended up just 39-cents to $91.04 a barrel.
New home sales rose during October, but only because September’s initial figure was revised sharply lower. New home sales came in at 728,000 on an annualized basis, but this was below estimates for a reading of 753,000. September’s initial reading of 770,000 was revised to 716,000. The silver lining in the report was the decline in inventory levels to 8.5 months from 9.0 months. However, this was a result of builders cutting prices sharply with the median price of a home down nearly nine percent.
In other economic news, jobless claims rose sharply to 352,000 from 329,000 for the week ending Nov. 24. This pushed the four-week moving average higher by 6,000 to 335,250. This will put more pressure on the Fed to cut rates at their Dec. 11 meeting. Odds of a 25-basis point cut fell today to about 50 percent, but this was offset by a gain in the odds of a 50-basis point cut to about 38 percent.
A 0.5% interest rate cut would definitely move these markets. We need to wait to see what the Fed does before making our next play.
Until next time.
Oil and economic news dominated the session.
This week has seen a decline in energy prices due to rumors that OPEC is set to raise production quotas at their meeting next week. That has given the markets some respite. However, crude rose more than four dollars this morning on news fire damaged a pipeline between Canada and the U.S. By the end of the session, traders figured this was in fact no big deal and oil ended up just 39-cents to $91.04 a barrel.
New home sales rose during October, but only because September’s initial figure was revised sharply lower. New home sales came in at 728,000 on an annualized basis, but this was below estimates for a reading of 753,000. September’s initial reading of 770,000 was revised to 716,000. The silver lining in the report was the decline in inventory levels to 8.5 months from 9.0 months. However, this was a result of builders cutting prices sharply with the median price of a home down nearly nine percent.
In other economic news, jobless claims rose sharply to 352,000 from 329,000 for the week ending Nov. 24. This pushed the four-week moving average higher by 6,000 to 335,250. This will put more pressure on the Fed to cut rates at their Dec. 11 meeting. Odds of a 25-basis point cut fell today to about 50 percent, but this was offset by a gain in the odds of a 50-basis point cut to about 38 percent.
A 0.5% interest rate cut would definitely move these markets. We need to wait to see what the Fed does before making our next play.
Until next time.
# posted by Paul @ 3:36 AM 
