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FinNews for the week ending October 5, 2012 Top Stories The Labor Department reported that the unemployment rate was 7.8% last month, the first time below 8% since President Barack Obama's inauguration. 114,000 jobs were added, and previous figures were adjusted higher than estimates. 181,000 jobs were added in July and 142,000 jobs in August, "showing that job growth in the third quarter was far higher than in the spring." (1) Economic Releases & Statistics Construction spending fell 0.6 percent, the largest drop since July last year, to an annual rate of $837.1 billion, the Commerce Department said. Economists polled by Reuters had expected construction spending to rise 0.5 percent in August. (2) U.S. home prices rose the most in six years, jumping 4.6% in August. Year on year prices soared in August according to real estate data provider CoreLogic in Irvine. The gauge rose 0.3% from July for its sixth straight monthly increase. (3) Factory orders in the US fell 5.2 percent in August, the largest drop in almost three years but not as bad as the forecast for a 5.9 percent drop. (4) The Institute for Supply Management's services index was up to 55.1 last month, beating forecasts for a drop. (5) The manufacturing index from the same showed 51.5. Numbers above 50 are generally considered positive as they indicate expansion. (6)Stocks & Earnings Zynga, the online game maker, is trading near its lowest level on forecasts for "weak demand" for its games. (7) Global Currencies The Australian dollar dropped to a three-week low against the US dollar following an unexpected interest rate cut from the Reserve Bank of Australia. The central bank lowered its benchmark interest rate to the lowest level since 2009. (8) The Bank of Japan kept its interest rate steady following their meeting, however, speculation persists that they may introduce easing in the next meeting on October 30. (9) Oil & Energies Crude oil supplies were reported as having dropped by 500,000 barrels versus a forecast for an increase of 1.5 million barrels. Supplies are 8.4 percent above levels at the same time last year. Gasoline supplies increased by 100,000 barrels versus forecasts for them to remain unchanged. Distillates were down 3.7 million barrels versus forecasts for a 400,000 barrels decline. (10) Gasoline prices in California spiked following several issues which cut supplies, including problems at a Chevron refinery which was damaged by fire in August. (11) Grains & Field Crops Mid-week price gains in soybeans were attributed to a "bargain-hunting bounce" as buy stops were triggered after prices hit a three-month low. Harvest pressure has been seen in grain markets as better than expected yields are being reported. (12) Informa Economics increased their yield and production estimates, previously trimmed by the US drought. Soybean prices were further bolstered by news that China had purchased 180,000 metric tons. Beneficial rains were seen in the winter wheat planting areas of the US, further pressuring prices. (13) Lobbyists are suggesting that Russia may export up to 15 million metric tons of wheat for the 2012/13 season. Nearly 7.5 million metric tons have already come from Russia since the marketing year began. (14) Cotton quality may see a negative impact from rains during harvest time. Plexus Cotton Ltd is reporting that only 25 percent of the cotton was picked ahead of the rains. (15) In North Korea, inclement weather may lead to a shortfall in the rice harvest, which may deliver a yield lower than expected. The growing season was first hit with drought, followed by typhoons and flooding in many areas. (16) Precious Metals South African mining companies - Gold Fields and AngloGold - are likely set to have talks with mineworker unions as early as next week. Several mines have had stoppages which diminished gold production following worker strikes. (17) Gold prices in India were lower on subdued demand. (18) 12,000 platinum mine workers at Anglo American Platinum were fired in "an attempt by the company to stem the tide of wildcat strikes." (19) Silver demand in India was seen increased, but purchases were also slower during the two-week holiday period usually inauspicious for new purchases. Peak demand is forecast to arrive ahead of Diwali in November. (20) Other Commodities Dry and windy weather in Ivory Coast cut production by more than 2 percent in the 2011/12 season. Cocoa arrivals were down to 1,475,756 metric tons versus the previous season's total of 1,510,664. (21) Ghana is planning to use irrigation systems to help their cocoa crop to stem the losses of cocoa during periods of drought. (22) The robusta coffee harvest has started in Vietnam and beans are expected to hit the market in large amounts next month. Forecasts place the crop between 24 to 27 million bags. (23) According to the Vietnamese Ministry of Agriculture and Rural Development, the coffee crop output should be the highest ever, over 1.6 million tons. (24) Orange juice prices fell as investors "removed bets" on seasonal hurricane risk to Florida crops. (25) Next Week:
1. http://online.wsj.com/article/SB10000872396390443768804578038150747630398.html 3. http://www.latimes.com/business/money/la-fi-mo-home-prices-20121002,0,345007.story?track=rss 5. http://www.latimes.com/business/money/la-fi-mo-ism-service-economy-20121003,0,1628157.story 6. http://www.mbtmag.com/articles/2012/10/ism-manufacturing-back-track 11. http://www.times-standard.com/localnews/ci_21705460/humboldt-gas-prices-spike-4-89-perfect-storm 12. http://www.reuters.com/article/2012/10/03/markets-grains-idUSL3E8L35FU20121003 13. http://af.reuters.com/article/commoditiesNews/idAFL3E8L53Y120121005 14. http://www.brecorder.com/agriculture-a-allied/183/1245288/ 17. http://www.foxbusiness.com/news/2012/10/05/south-africa-gold-industry-wage-talks-to-start-next-week/ 20. http://online.wsj.com/article/SB10000872396390443768804578036424203444126.html 21. http://www.brecorder.com/agriculture-a-allied/183/1245292/ 23. http://www.reuters.com/article/2012/10/05/markets-europe-coffee-physical-report-idUSEUCOF120121005 25. http://online.wsj.com/article/SB10000872396390444752504578024833216616620.html _______________________________________________________________________________________ Disclaimer: Trading and investing involve a substantial degree of a risk of loss and are not suitable for everyone. Past performance is not indicative of future results. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. The publisher, and/or its affiliates, staff or anyone associated with FinNews, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Information provided is compiled by sources believed to be reliable. Financial Media Corp, and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of the publisher. |
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