Wednesday, August 17, 2005

PPI Cools Bond Market

Today's read on the Producer Prices, up 1%, was a little more like inflation to the bond market. Expectations were for half that and the "Core" rate was up 0.4%, quite a bit higher than the 0.1% expecations and too close for comfort for the bond market.

As the bond market was unwinding its gains from yesterday, the stock market was enjoying a little rally brought to us by HPQ and AMAT to mention a few. The stock market gains were somewhat muted by the end of the day as we see some very heavy trading going on these days, meaning, stocks are having trouble going up, not meaning heavy volume, which there really isn't.

You would think that with the kind of inflation the PPI brought this morning, there would be some upward motion in the precious metals but there was only a large thud. People must think that there will be more Fed intervention pushing up rates and causing less reason to purchase gold. That doesn't make sense but I don't know what is going on. We suffered a little setback in our mining position today. The uptrend in the mining stocks is still in place but we don't like these types of days as bulls in the metals market.

The internet virus or worm we had at work today was still operating and systems were slow and my PC rebooted several times this morning. We like to keep an eye on the markets during the day just because of events that may be going on due to news. Today kept us from that all together. Sometimes work gets in the way but today it was the internet/worm/virus. Hope your computer day was better. Anyway, productivity was poor at many companies around the country due to this virus/worm.

Dow Industrials: 10550.71 +37.26
BGEIX: 11.68 (ouch)

PS There will be no Blog posting early next week due to me being away from my computer. We will post tomorrow evening, Thursday, and then we will post on Wednesday next week unless something spectacular happens on Tuesday and then maybe Tuesday.

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