 | MONEY
|
| HOME | PRICE GUIDE | BUSINESS | SPORTS | OPINION | SPECIALS | STORE | ARCHIVES | CONTACT |
|
|
Three-footed Monster Drops First Shoe - Money Matters for 12/8/05/
Three-footed Monster Drops First Shoe - Money Matters for 12/8/05/05
Continuing from yesterday's exposition on the three economic forces pushing and pulling on US stock markets, the first shoe of the three-footed freak (1. oil and gas prices; 2. retail sales; 3. interest rates) fell hard on the economic footing today as crude oil and natural gas prices spiked up on concerns over cold weather assaulting much of the USA.
The cold snap that has beleaguered states from Texas to Maine prompted a good deal of speculative buying on the commodities exchanges today as light, sweet crude futures jumped $1.45 today to close at $60.66 per barrel.
That move was nothing compared to the spectacular rise in natural gas, the fuel with which more than 60% of America heats their homes, which was up $1.29, to close at $14.99 per 1000 cubic feet, a 9% jump.
So, the economic monster has dropped the first shoe. The second shoe to fall will depend entirely on timing and the whims of the Federal Reserve and the American shopper, who now has to weigh Christmas present buying with staying warm for the remainder of the winter.
Since the Fed won't act until Tuesday of next week and stores are open all day, every day until then, reports from tracking groups around the country should provide some measure of the breadth and depth of consumer retail spending during the all-important holiday season.
It's still a little early - if 16 shopping days remaining can be called "early" - to make solid estimates on holiday shopping. There's usually a lull in the action the first week of December, so the returns from this coming weekend are probably not going to be definitive, though indications are all trending towards a somewhat subdued season for shoppers and retailers.
Cold weather and especially stormy weather certainly doesn't help matters for retailers and the US Northeast is expecting another major storm beginning tonight.
With one foot on the ground, the stomping from the Fed will likely be next and it will hit terra firma with a resounding thud when the Fed governors, purporting to know everything, announce the 13th consecutive rate increase on Tuesday, December 13.
Stocks took it in stride today, dropping another 44 points on the Dow, while the Nasdaq shed only 5 and the NYSE actually eked out a small gain.
But the truth is out: the rally is over, and so are stock market gains for the year.
Those investors smart enough to buy silver or gold are making a killing, meanwhile as both precious metals hit new multi-year highs today.
Silver and gold, silver and gold... has a nice holiday ring to it.
Dow Jones: -55.79; 10,755.12 close
NYSE Advancers: 1840
Nasdaq Advancers: 1559
NYSE New Highs: 138
Nasdaq New Highs: 105
Gold: +4.90; 522.70 close
|
|
