Morning Market Update March 14

March 14th, 2013 by

Wall St. opens higher this morning in an attempt at ten straight days of gains, but light volume and small gains yesterday may be signalling a top. The dollar index broke through 83 this morning, weighing on all commodities, not just precious metals. Oil is slightly down as inventories grow and global demand forecasts are lowered.

European stocks were trading near five-year highs overnight as two favorably received Spanish bond auctions helped sentiment, but overall EU employment was reported at a seven-year low, drug down by Greece, Italy, Spain and Portugal. This prompted ECB officials to reiterate that accommodative economic policy would be continuing. Year over year German car sales continue to fall, putting pressure on Platinum Group Metals.

In Asia, the Nikkei snapped a two-day losing streak on anticipation of quantitative easing, as the lower house of Parliament approves prime minister Abe’s choices for leaders for the Bank of Japan. Chinese stocks had their first gain in three days in light volume as investors ponder the effects of the government tightening money supply to combat inflation.

In the U.S., first-time jobless claims for last week dropped 10,000 to 332,000 people filing for unemployment compensation for the first time. Analysts were expecting a rise to 350,000 newly-jobless for last week. The four-week rolling average of the newly-unemployed dropped 2,750 to 346,750, a five-year low. Continuing jobless claims dropped 89,000 to 3.02 million.

On the inflation front, wholesale prices jumped, as the Producer Price Index increased 0.7% in February, fueled by a 7.2% leap in gas prices. Core inflation for the last 12 months stood at 1.7% in February, down 0.1% from January, and well below the Fed threshold of 2.5% that would signal the end of quantitative easing.

Precious metals dropped on the release of the jobless numbers, but are climbing back even in the face of rising stocks and a ever-stronger dollar. Platinum is lagging a bit behind the intraday recovery, probably due to the disappointing car sales numbers from Europe.

by David Peterson