Wednesday’s report on the CPI was a little more realistic than Tuesday’s PPI report with the “core” rate up 0.3% versus expectations of 0.2%. Between the Fed getting a little tired of raising rates and the inflation picture continuing to deteriorate, the precious metals are soaring. Gold is well around $635 and silver is trading near $14.50. These numbers are huge compared to where they were just a year ago. Yes, I know, we have been on the sidelines for some time waiting for a good entry point. That’s sometimes what happens in strong markets, you don’t get a chance to get in.
This is unlike the current stock market action which had a strong day on Tuesday and Wednesday’s follow through showed some pretty firm action. Even these strong days leave the market seemingly weak. The NASDAQ Comp did make a new high for the move but it just doesn’t feel like you have to buy right now.
After the market closed on Wednesday, AAPL and INTC announced with both of them adding to their prices even though INTC’s report was very poor indeed, 38% drop in first quarter profit on revenues that were about 5% less. We recall that INTC’s price has dropped below 20 and stays there this evening. Tomorrow’s trading should be very interesting.
A WSJ article slated for Thursday’s edition talks about the “Majority Sees Housing Bubble on Verge of Collapse”. The article says that “more than 70% of US consumers believe a national housing bubble will burst and home prices will collapse within the next year, although 56% believe it’s unlikely to happen in the area where they live”.
Lastly, I was hoping we would have some additional comments on Erick’s comment this week but none was there. The future of the dollar and what to put your money in is something that should be important to most. We will continue to analyze this as time permits. In the mean time, take advantage of these high prices and sell. Otherwise…
Be careful out there…
Dow Industrials: 11,278.77 +10.00
RYVNX: 17.70
RYAIX: 21.49
TLT: 84.38
BEGBX: 13.10
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