Crude Jumps On News While Gold Tries To Find Traction

As West Texas Intermediate soared 3.25% and Apple finally found its wings again today, equities in the U.S. jumped.

Apple turned in its best performance in about four months adding about 4.00%. Oil was up on news (which will be temporary) of outages in Nigeria and interruptions in Venezuela. But there were other movers on Wall Street, especially in the tech and biotech sectors. However, Home Depot rose a strong 2.00% on the day in a sector wholly unrelated.

Berkshire Hathaway gave Apple the nudge it needed to get out of the doldrums it had been in. They bought about $850M in shares. Berkshire also expanded its holdings of IBM, the perennial blue chip that is seeking to get its mojo back. The vote of confidence by Buffet, et al, in IBM is a godsend.

At the same time, Berkshire slashed its holdings of P&G to a few hundred thousand shares, or by 99.5%. The investing giant also sold much of its holding in Wal-Mart.

While Nigerian saboteurs have hurt that country’s output, we expect the Venezuela situation to be much longer-lived and direr. Venezuela is entering one of those socio-political-economic black holes that can take some country decades to emerge from. It would not be surprising if the class-conscious nation landed itself in a civil war, which would definitely debilitate its oil industry.

Some ever-so-slight dollar weakness helped gold and silver but even with some modest regular trading gains, the two leading precious metals performed in a generally lackluster manner. Of course, the strong day in U.S. equities is the real root cause of that.

At 3:30 in New York, the three major indexes are up well over 1.00% with the NASDAQ leading the way. It is up almost 1.50%.

Europe closed mixed (with the German DAX unchanged). Asia was up nicely in Tokyo, Hong Kong and Shanghai.

It is easy to see why, with that kind of stock performances, why any havens were suffering.

The U.S. 10-year bond yield was up and face price down, indicating that the market was looking for buyers to entice.

We spoke briefly about retail store stocks yesterday. It seems that some advisors are touting the very stocks that took it on the chin this reporting period. J.C. Penney; Sears; Wal-Mart; and Macy’s fall into that category one way or another.

It’s time, say these advisors, to get some great bargains and take a ride up on such stocks. We agree in the short term. However, looking at the handwriting on the wall, we are hard pressed to be positive on any retail gambit that isn’t heavy with Amazon, eBay or other online giants.

We discuss this because the S&P is rich in old-line retailers, and when we look to enter trades in the index fund, we have to take into account he bricks-and-mortar weaknesses. Aside from the aforementioned companies, we also have entities like Footlocker, Best Buy and The Gap. Then there is a Baby Boomer-consumer-heavy company like Harley-Davidson. It is down 25% in the last year.

Perhaps it is time for the S&P to realign its components to reflect the circumstances of the contemporary retail picture.

Wishing you as always, good trading,