Everything Old Is New Again Except For The Interminable Discussion of Fed Rate Increases Which Are Really Old

OK… maybe just one shot of rate rise serum will be called for. Not two, and certainly not three.

That seems to be the story on equities today, which maintained sturdy gains despite a bad print on the Institute Of Supply Management (ISM) November Manufacturing PMI. That came in at 48.6, which signals contraction.

It was the first time in three years that the PMI came in at less than 50.0 and it is the worst performance since 2009. (A reading over 50 denotes expansion; a reading under 50 denotes contraction.)

Yet, in the “go-figure” department, U.S. auto sales screamed out of the starting gate for the month. During November, Fiat Chrysler sales rose 3%, General Motors’ sales rose 1.5% and Ford sales edged up 0.4%.

U.S. vehicle sales have been particularly strong during 2015 and are on track to hit 17 million for the year. Dealers and consumers have complained that there are shortages of the most desirable vehicles.

True, the rise of the U.S. dollar has made a big impact on American exports, but we are thinking that it is the slowdown in the economies of other countries and the attendant loss of purchasing momentum that is hammering manufactures made in the U.S. Note that other manufacturing centers are also faltering.

Another area that has hurt U.S. manufacturing is the sub-sector of oil extraction and transport equipment for energy.

Be that as it may, transports were up in the Dow Jones Indexes, led by airlines, which are profiting from lower fuel costs and more discretionary spending cash in the pockets of consumers.

The regular S&P 500 reading is hovering right at 2100 in New York at 3:45 PM. It is up almost a full 1.00%. The Dow and NASDAQ are also strongly in the green.

Oil is trading down after hours, having risen at settlement by 20 cents per barrel. Brent North Sea continues a precipitous and slightly puzzling drop. Today it fell by almost 1.00%.

We’re looking at increasing volatility in Forex trading because no one knows how the interplay between the European’s Central Bank QE efforts and the Federal Reserve’s upward tweaking of interest rates, which most observers feel is a fait accompli.

The dollar’s 0.65% slip helped push gold up by nearly $4.50 on the day. It should be noted that the weaker dollar is the only thing that fueled gold. Silver and platinum also climbed today. Palladium continued its chronic weakness.

An interesting side note, one of those statistical curiosities we all love occurred today. The Nikkei Index in Japan surpassed 20,000. It has not been at or above 20,000 since August, and is off its 2015 low of roughly 17,000 in January.

Wishing you as always, good trading,