Possible Recessionary Market Indicators?
Oil prices are at a 7-month high
Oil prices held steady in Asian electronic trading Tuesday after hitting a seven-month high in New York the previous day amid concerns that Iran's nuclear standoff and violence in Nigeria could undermine supplies.Light, sweet crude for May delivery rose 1 cent to US$68.75 a barrel on the New York Mercantile Exchange, midmorning in Singapore.
Chief among the oil-market fears these days are Iran's nuclear standoff with the international community and violence in Nigeria that has forced the shutdown of more than half a million barrels a day of supply. Both Iran and Nigeria are members of OPEC.Another source of concern is that more than 300,000 barrels per day of Gulf of Mexico production remains off the market as a result of last summer's hurricanes.
Gasoline prices up 17 cents a gallon in the last 2 weeks
NEW YORK (CNNMoney.com) - American drivers are being socked with skyrocketing gasoline prices and could even see shortages this summer as refineries struggle to switch additives that make cleaner burning fuel.
Nationwide, average gas prices shot up another cent and a half Monday to $2.676 for a gallon of regular, according to a survey by AAA. A year ago the average was $2.272.
The jump adds to a trend seen over the last month or so.
Over the last two weeks gasoline prices have surged 17 cents per gallon, said Trilby Lundberg, publisher of the Lundberg Survey, which tallied prices March 24 and April 7 for its latest survey released Sunday.
Dollar was up—Fed may raise rates more than initially anticipated
April 10 (Bloomberg) -- The dollar advanced for a third day against the yen on anticipation the Federal Reserve may increase borrowing costs twice more this year as the economy strengthens.
Traders have been increasing bets the Fed will raise its main rate to as high as 5.25 percent since a government report on April 7 showed the economy added more jobs than economists forecast. Yields on 10-year U.S. Treasuries near four-year highs may also attract demand from international investors.
Gold Speeds through $600—a 25 year high
SINGAPORE (Reuters) - Gold spiked to $600.40 an ounce on Tuesday, its highest since December 1980, as funds bought on worries about inflation, Middle East tensions and uncertainties over the dollar's outlook.
Silver tracked gold's gains and rose to another 23-year high before retreating, while platinum paused for breath after hitting a record high the previous day.
"We're there mate, we've done it," said Darren Heathcote, head of trading at N M Rothschild in Sydney.
Tensions in the Middle East over Iran's nuclear intentions, uncertainty about the dollar's outlook, worries about rising energy costs and speculation that central banks will diversify into metals have also boosted gold's appeal
Silver also climbs to new 23 year high
Gold prices rose to 25-year highs in Asia, as investors bought the metal to hedge against inflation. Silver climbed to a 23-year high and copper rose to a record in Shanghai.
Reports the U.S. is planning military strikes against Iran, the world's fourth-biggest oil producer, pushed up energy prices and boosted the appeal of safe haven assets.
Investment funds are also pouring money into commodities such as copper, used to make wires and pipes, betting their returns will beat those on stocks and bonds.
``There's a heightened level of funds coming into the metals in the second quarter,'' said Mark Pervan, head of research at Daiwa Securities SMBC in Melbourne. ``The higher oil prices also bode well for'' precious metals.
Central banks are rumored to be buying gold
The upward march in commodity prices picked up even further pace overnight as a combination of geopolitical tensions over Iran, supply concerns, fund diversification and sheer momentum drove prices higher across precious, base metal and oil markets.
Alongside the geopolitical concerns are worries about the US dollar at a time of mounting imbalances in the world economy. Central banks are rumored to be buying gold as a hedge against a collapse in the greenback, while momentum-chasing funds are jumping on the bandwagon.
Something is up in the world and the markets are talking. I believe we will soon see a rapidly slowing economy as higher energy prices and interest rates begin to hurt the already overextended consumer, while simultaneously US housing inventories swell causing home prices to fall--taking away the wealth effect and US consumer spending (70% of our economy).
It's probably a good time to get ready for the looming recession--right around the next corner... IMHO, I believe it'll be a monster this time.