Precious metals stabilized overnight, as short-covering activity kicked in after Thursday’s losses. Metals are still bruised by an over-reaction to the release of the FOMC meeting minutes on Wednesday.
The dollar is weaker again today, even though it hovers near a four-month high against the yen. The euro hit a four-YEAR high against the yen in overnight trading, with the big economic news out of Europe being continued evidence of a strong recovery in Germany. The Ifo business confidence index in the EU’s largest economy hit its highest point since April 2009, rising to 109.3 from October’s 107.4. Analysts were expecting a miniscule increase to 107.7.
The news leading the charts however, is the Dow closing at 16,000 for the first time in history. The NASDAQ opened higher, while the Dow and S&P 500 opened a little lower than flat, but all are feeling their way towards new records in early trading.
The yield on the 10-year Treasury note is easing this morning, back down to 2.77%. Yesterday’s sale of 10-year TIPS (Treasury Inflation-Protected Securities) sold at the highest yield since July 2011, in an effort to attract buyers. These inflation-protected Treasuries have lost 7.55% this year, the largest calendar year loss in the program’s 17-year history.
Expect cautiousness to end the week, as U.S. markets prepare for a short trading week for Thanksgiving. Markets will be closed on Thursday, and be open only a half day on Friday to end the month. Funds may sell into the record levels to lock in profits for the year, especially as more big names in finance warn that the stock market is in a bubble.