March 16, 2013 at 11:36 AM EDT
More ‘big-picture’ worries dropping by the wayside?
Saturday, March 16, 11:30 a.m. Business Insiders: “In the early hours of Saturday morning in Europe, the Eurozone and IMF announced a 10 billion euro bailout for Eurozone member Cyprus, whose economy is tied closely to Greece’s and is in a similar dire state.”  The Wall Street Journal: ‘Talks Open a Window for Deal on [...]

Saturday, March 16, 11:30 a.m.

Business Insiders: “In the early hours of Saturday morning in Europe, the Eurozone and IMF announced a 10 billion euro bailout for Eurozone member Cyprus, whose economy is tied closely to Greece’s and is in a similar dire state.” 

The Wall Street Journal: ‘Talks Open a Window for Deal on Deficit!’ “Two weeks of bipartisan meals, closed-door meetings and dueling budget proposals have opened perhaps one last window for the White House and Congress to reach a deficit-reduction deal before a likely fight over the debt ceiling this summer.  Lawmakers say they now see an opportunity to forge a comprehensive plan between now and July or August.”

Was Commodity Warning For Economy Another False Alarm?

As I have written before, consumers understandably like to see prices for commodities decline, the more the merrier, particularly gasoline and energy costs.

Many fundamental analysts also take commodity price declines as a positive for the economy, on the theory that consumers will have more spending money in their pockets, and manufacturers will have lower costs, so hopefully greater earnings.

Investors tend to also take declining commodity prices as a positive for the stock market on the same reasoning.

Unfortunately, history doesn’t confirm the optimism.

As a five-year chart of the CRB Index of Commodity Prices shows, declining commodity prices usually indicate demand for goods is dropping and the economy will soon be in trouble, which in turn is a problem for the stock market.

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For instance, the CRB Index of Commodity Prices plunged 57%, from 470 to 200 in 2008-2009. Good for the economy and stock market? Not hardly. The severe 2008-2009 ‘great recession’ and severe bear market in stocks accompanied the decline in commodity prices, and saw the S&P 500 also plunge 57%.

Before the economy slowed in the summer of 2010, and the stock market experienced the double-digit decline that summer, commodity prices had rolled over to the downside again.

And before the economy began to slow again in the summer of 2011 when the S&P 500 experienced a 19% decline that summer, commodity prices began to decline again.

Now, after only a brief recovery last year, the CRB Index of Commodity Prices has been back to the downside since last fall in spite of the economic recovery being back on track after last summer’s stumble, and in spite of the stock market being in a significant favorable season rally.

But is that another false alarm as took place in early 2010?

The jury is still out on that. But on the short-term charts, the CRB Index is trying to rally again. Is it just another short-term rally attempt doomed to fail again at a lower high, or the beginning of a recovery?

And it was reported this week that both the Producer Price Index and Consumer Price Index jumped an unexpected 0.7% in February (although the core rate, with the costs of food and energy removed rose only 0.2%). 

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To read my weekend newspaper column click here: Remain Invested But Alert! 

Subscribers to Street Smart Report: There is important information in the ‘premium content’ area of this morning’s blog, and there will be a hotline later today in your secure area of the Street Smart Report website.

Yesterday in the U.S. Market.

A narrow trading day to a negative close. The Dow traded in a narrow range of just 70 points between in intraday high and low, in spite of huge volume associated with the quadruple-witching expirations that took place. Trading volume was 1.8 billion shares traded on the NYSE, 2.1 billion on the Nasdaq.

The Dow closed down 25 points, or 0.2%. The S&P 500 also closed down 0.2%. The NYSE Composite closed down 0.1%. The Nasdaq closed down 0.3%. The Nasdaq 100 closed down 0.3%. The Russell 2000 closed down 0.1%. The DJ Transportation Avg. closed down 0.1%. The DJ Utilities Avg closed up 0.7%.

Gold closed up $2 an ounce at $1,591.

Oil closed up $.53 a barrel at $93.56.

The U.S. dollar etf UUP closed down 0.4%.

The U.S. Treasury bond etf TLT closed down 0.5%.

Asian markets closed mixed in their last session of the week.

The Asia Dow closed up 0.8% Thursday night (Friday in Asia).

Among individual Asian markets:

Australia closed up 1.7%. China closed up 0.2%. Hong Kong closed down 0.4%. India closed down 0.7%. Indonesia closed up 0.7%. Japan closed up 1.4%. Malaysia closed down 0.3%. New Zealand closed up 0.1%. South Korea closed down 0.8%. Singapore closed up 0.2%. Taiwan closed down 0.3%. Thailand closed up 0.7%.

Yesterday in European Markets.

European markets closed down yesterday. The London FTSE closed down 0.6%. The German DAX closed down 0.2%. France’s CAC closed down 0.7%. Greece closed down 0.8%. Ireland closed down 1.6%. Italy closed down 0.4%. Spain closed down 0.4%. Switzerland closed up 0.3%.

Global markets for the week.

A somewhat positive week in the U.S. especially for our holdings in the Transportation Avg, Utilities Avg, and Russell 2000. Fractionally positive in Europe, but not elsewhere except for a further spike up in Japan.


THIS WEEK (March 15)
DJIA14514+ 0.8%
S&P 5001560+ 0.6%
NYSE9116+ 0.7%
NASDAQ3249+ 0.2%
NASD 1002799- 0.2%
Russ 2000952+ 1.1%
DJTransprts6272+ 2.1%
DJ Utilities495+ 1.4%
XOI Oils1,360+ 1.0%
Gold bull.1,591+ 0.8%
GoldStcks134.46+ 0.9%
Canada12830- 0.1%
London6489+ 0.1%
Germany8042+ 0.7%
France3844+ 0.1%
Hong Kong22533- 2.4%
Japan12560+ 2.3%
Australia5129- 0.2%
S. Korea1986- 1.0%
India19427- 1.3%
Indonesia4819- 1.1%
Brazil56864- 2.7%
Mexico42605- 3.9%
China2384- 1.7%
LAST WEEK (March 8)
DJIA14397+ 2.2%
S&P 5001551+ 2.2%
NYSE9054+ 2.0%
NASDAQ3244+ 2.4%
NASD 1002804+ 2.1%
Russ 2000942+ 3.0%
DJTransprts6143+ 2.7%
DJ Utilities488+ 1.5%
XOI Oils1,347+ 1.6%
Gold bull.1,578+ 0.2%
GoldStcks133.30+ 0.01%
Canada12835+ 0.5%
London6483+ 1.7%
Germany7986+ 3.6%
France3840+ 3.8%
Hong Kong23091+ 0.9%
Japan12283+ 5.8%
Australia5137+ 0.7%
S. Korea2006- 1.0%
India19683+ 4.0%
Indonesia4874+ 1.3%
Brazil58432+ 2.7%
Mexico44322+ 0.7%
China2426- 1.7%
PREVIOUS WEEK (March 1)
DJIA14089+ 0.6%
S&P 5001518+ 0.2%
NYSE8874- 0.2%
NASDAQ3169+ 0.3%
NASD 1002747+ 0.4%
Russ 2000915- 0.2%
DJTransprts5984+ 0.7%
DJ Utilities481+ 0.7%
XOI Oils1,326- 0.6%
Gold bull.1,575- 0.3%
GoldStcks133.29- 2.2%
Canada12773+ 0.6%
London6378+ 0.7%
Germany7708+ 0.6%
France3699- 0.2%
Hong Kong22880+ 0.4%
Japan11606+ 1.9%
Australia5100+ 1.3%
S. Korea2026+ 0.4%
India18918- 2.1%
Indonesia4811+ 3.4%
Brazil56883+ 0.3%
Mexico43995+ 0.3%
China2469+ 1.9%

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Next week’s Economic Reports:

Next week will be an average week for potential market-moving economic reports, and will include the first new info on the housing industry in a while; New Housing Starts, Existing Home Sales, FHFA Home Prices, plus the Fed’s FOMC meeting announcement, Chairman Bernanke’s press conference, etc. To see the full list click here, and look at the left side of the page it takes you to.

I’ll be back with the next blog post on Tuesday morning at 9:25 a.m.

To read my weekend newspaper column click here: Remain Invested But Alert!

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