Gold has traded between $1,652 and $1,661 so far today…as of 7:45 am Pacific, the yellow metal is unchanged at $1,660…Silver has gained 26 cents to $30.30…Copper is up 4 pennies at $3.57…Crude Oil is off 21 cents to $90.77 while the U.S. Dollar Index is flat at 79.61…this is an abbreviated version of BMR Morning Market Markets due to the holidays…we hope you enjoyed a peaceful and enjoyable Christmas…
U.S. Jobless Claims At Lowest Level In 4.5 Years But Consumer Confidence Dips
The number of Americans filing new claims for unemployment aid fell last week to nearly its lowest level in 4 1/2 years, a possible sign that employers have picked up the pace of hiring…initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 350,000, the Labor Department said today…the prior week’s figure was revised to show 1,000 more applications than previously reported…after spiking in the wake of a mammoth storm that ravaged the East Coast in late October, the weekly levels of new claims have now dropped to their lowest levels since the early days of the 2007-09 recession…the four-week moving average fell 11,250 last week to 356,750, the lowest since March of 2008…the news wasn’t so good regarding the consumer confidence index which tumbled to a 4-month low of 65.1 in December from a downwardly revised 71.5 in November, in statistics released this morning by the Conference Board…economists had expected a reading of 70.0, according to a Reuters poll…
U.S. Approaching Its Legal Borrowing Limit, Political Games Continue In Washington
The Treasury Department said yesterday the government would hit its legal borrowing limit by Monday, setting in motion emergency measures to keep the government operating for several more weeks and serving as a reminder that the nation’s budget wrangling could continue well into 2013…the Treasury’s financial maneuvering is designed to put off until February or March the prospect of a full-blown debt crisis…Treasury Secretary Timoth Geithner’s two-paragraph letter to Congress didn’t specify when the emergency measures might be exhausted, blaming the “significant uncertainty that now exists with regard to unresolved tax and spending policies for 2013″…
The White House and congressional leaders have shown no signs of progress toward crafting an agreement to avoid the year-end tax increases and spending cuts known as the “fiscal cliff” which in reality more resembles a “fiscal slope”…politicians will likely end up likely playing the “blame game” (Democratic Senator Harry Reid has already started by blaming the House GOP this morning for “intransigence”)…they likely won’t start getting serious about putting a deal together until the new Congress reconvenes January 3…it’s a lot easier to vote for a retroactive tax “decrease” than a tax hike…there’s really no urgent need to cut a deal by New Year’s Eve despite all the media hype regarding that date…the world as we know it won’t come to an end on January 1…
Today’s Markets
“Fiscal Cliff” jitters have some investors on edge, however…the Dow is down 75 points and the TSX off 25 points as of 7:45 am Pacific…we’re closing out 2012 with a very bullish view of the Venture Exchange which managed to hold critical support this month despite several negative influences including tax-loss selling, weakness in Gold, and the mainstream media’s “fiscal cliff” hype…technically, the Venture is nicely positioned for a strong move to the upside during the upcoming first quarter…the Venture is currently up 2 points at 1188…
TSX Chart Update
We haven’t given a technical update on the “big board” for a while, so below is a 2.5-year weekly chart from John on the TSX…the overall trend has a bullish tone to it (note the bullish divergence between price and the RSI) which leads us to believe there will be a breakout in the near future above the symmetrical triangle…
Shanghai Composite Finally Breaks Out
Technically, the big story in the global markets so far this week is the breakout in China’s Shanghai Composite, a development the mainstream media has missed but that’s certainly not surprising…the Shanghai has been caught in the grips of a down trendline since April, 2011…this Index over the last few years has also closely paralleled the Venture Exchange with the Shanghai typically leading the way…so this week’s breakout is highly significant in our view and also reflects a strengthening of the Chinese economy…below is John’s 2.5-year weekly chart…the Venture needs to surge above 1275 in order to get above its down trendline that has also been in place since early 2011…
The Shanghai closed today at 2206…
Nice to see the venture up today when everything else is red. Won’t it be nice once this “cliff” b-s is put behind us? But I have a feeling the US govt. will only kick the can down the road rather then deal with the issue.
Comment by Tony T — December 27, 2012 @ 12:33 pm
The whole “fiscal cliff” issue is a great example of media-inspired hysteria. First, it’s not a “cliff” – it’s no more than a gentle slope as January begins to unfold. And you’re right about kicking the can down the road, Tony. That’s all they’ll do – at some point in January, there will be a deal to retroactively roll back most of the automatic tax hikes, and most of the automatic spending cuts. Washington is certainly not serious about cutting spending. Government will continue to grow. The debt will continue to pile up. And that’s what will underpin Gold as an alternative to depreciating currencies and hyper aggressive central bank easing (the Fed’s balance sheet is expanding again to the tune of $85 billion a month, and Japan is about to go on steroids). The Venture will get through December without going to a new low. It has successfully re-tested the earlier lows, despite tax-loss selling, weakness in Gold, and the “fiscal cliff” fear mongering. This is the time to be bullish.
Comment by Jon - BMR — December 27, 2012 @ 1:23 pm