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Thursday, January 7, 2010

Morning Market Report

Here's the headline from today's CNBC, "Stocks Skid as Dollar Gains"

Stocks opened lower on Wall Street as a rising dollar pressures commodity prices and outweighed another round of positive news in the job market — and some better-than-expected retail-sales reports.

The weekly first time jobless claims came out and they were at 434,000. That's a rise of 1000 but better than expected. The four week average is also at a 16 month best. Of course, as long as this reverse dollar/equity pattern continues, all other data takes second fiddle.

Bonds are relatively unchanged this morning however they mostly turned for the worse yesterday following my last report. The ten year is even at 3.82%, or five basis points higher than this time yesterday. The yield spread between the two and ten year is back up to 3.81%. It's again testing all time highs. Meanwhile, the three month t bill is continuing to improve. It's now at .041%. Crude oil continues its climb. It's at $82.83 a barrel. That's the highest in months. Gold is at $1131 and it continues to sneak back up after touching $1080 an ounce a couple weeks back.

It was a bloody day in the Far East and its shaping up to be the same way in Europe. The Hang Seng in China was down .66%, the NIKKEI in Japan was down .46%, and the Straits Time Index in Singapore was down .59%. Meanwhile, in Europe, the FTSE in London is up .32%, the DAX in Germany is down .14%, and the Spanish index is down .61%.

The Dollar, as reported earlier, is rallying. It's .58% against the Euro, it's up .43% against the British Pound and it's up 1% against the Japanese Yen.

Heading into the 11 AM hour on Wall Street the three indices have essentially gotten back to even. The Dow is up 7 points, the NASDAQ is down 4 and the S&P is up less than 1. The pattern has broken a bit between the inverse relationship of the dollar and equities.

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