Gold Rises but Markets Seek Direction

We again faced a non-committal day in a non-committal period of investing and trading. Yes, gold rose in spite of a stronger dollar, but it was not plowing full-steam ahead but rather moving gingerly. Factoring in the stronger dollar today, gold was up a little more than $2.00 per ounce (Silver was essentially unchanged.)

Bond yields rose around the globe, but seemingly only as they tried to get back up off low levels that were practically artificial. (The U.S. 10-year yield bounced up to 1.85%.)

Oil rebounded after a three-day losing streak but had little effect DJIA or S&P 500 stock prices.

The euro was down slightly against the U.S. dollar, but the yen and British pound continued to fall markedly against the buck. Revived dollar strength seems to fly in the face of data, although admittedly the data was mixed.

Initial jobless claims fell 3,000 to 258,000, while durable goods for September unexpectedly fell. Pending home sales rose 1.5% in September, above expectations for an increase of 1.2%, according to a host of economists polled by Reuters.

The durable goods report had a silver lining, however. Bookings for non-military capital goods excluding aircraft dropped 1.2%, thus wiping out a 1.2% August gain that was revised upward from initial assessments, said the Commerce Department.

Even with the decline, bookings over the three months ended in September rose at a 5.2% annualized pace, indicating the worst of the persistent investment slump is over. (Orders for non-defense capital goods excluding aircraft are a proxy for future business investment in items like computers, engines and communications gear.)

Nevertheless, for the most part, analysts and investors could not decide which way to take the markets.

Equities around the world were off to moderately up. Asia did the most poorly. In Europe, the FTSE was the only major index that showed upward movement. In the U.S., we find ourselves puzzled as fear seems to be ruling sentiment. Maybe all the earning results are mixed into prices and yields but it’s noteworthy that corporate earnings have done better than expectations.

According to data from Earnings Scout, 50% of S&P 500 components have posted results as of this morning. Seventy-three percent beat earnings estimates while 61% beat sales/income targets.

Wishing you as always, good trading,