Equities Earnings Foil Gold
Caterpillar, 3M and GM all posted better-than-expected Q3 results - far, far better than analysts had been predicting, in fact - and the U.S. stock markets reacted heartily, adding anywhere from 1.3% to 1.7% as the afternoon wore on, NASDAQ reacting most emphatically.
Adding a little kick to the party punch was yet another low claims number among those filing for unemployment for the first time.
The dollar against the euro was essentially unchanged but the greenback rose powerfully against the yen. Crude oil and Brent found their inner bull and bounced back from lackluster days recently.
Safe havens in general were under pressure. Gold is down, obviously, but so is the price of the 10-year U.S. Treasury, while the yield was up modestly.
Some analysts are saying that the equities in the U.S. today were limited only by technical resistance. Others claim that in an already-jumpy market, reports of a potential new case of ebola in New York limited upside interest in stocks. The former seems feasible, the latter rather far fetched.
Also nudging the equities was what seems like a swift resolution of the murder of a soldier at Canada's Parliament yesterday. Our hearts are with our neighbors to the north.
There was even good news out of the eurozone. September's manufacturing index there rose, confounding experts who had predicted it to fall significantly from August.
The biggest question for the sustainability of the long bull run in equities is this, though: if Europe, Japan and China stay slow or shrink, can the U.S. economy make it on its own? So far indications show that it can.
Wishing you as always, good trading,
Gary S. Wagner - Executive Producer