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There is no free turkey on Wall Street. Yesterday’s reversal is proved to be short-lived. We started the day in a very negative tone as apparently bulls were more afraid of holding the stocks through holiday than bears. The weekly oil inventory data didn’t help either. But oil retreated amid profit taking. It now seems just a matter of time before the commodity reaching $100 mark. The US dollar got weakened again amid continuing yen unwinding trade. Not surprisingly, gold price moved higher and is now back above $800. I would like to point out that another important commodity – copper – appeared to be very weak recently even in the face of weak dollar. If this trend continues, it may indicate something more troublesome, that is, a slowing global economy. If this is indeed the case, then the last hope that US is able to avoid recession will be taken away. One more thing, S&P 500 index is now negative for the year, meaning most mutual funds are going to lose money for their clients for the first time since 2002. It is indeed a tough year for investors. |
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