“Equity and commodity markets advanced, encouraging rotation out of the greenback,” said analysts at Action Economics.

Also noted was that, “The dollar has been driven over the last two days by central bank activity. One is the Swiss National Bank, which appears to be continuing its buying of dollars,” said Meg Browne, a currency analyst at Brown Brothers Harriman.

The Swiss National Bank is publicly committed to stemming any haven-related appreciation in the franc, but as to what it may be doing, said that it doesn’t comment on intervention rumors.

However, the franc’s strength has proven “increasingly self-sustaining,” says Ashraf Laidi, chief market strategist at CMC Markets in New York. It has attracted support because of “broadening risk aversion, short-lived dollar strength and emerging doubts” about euro-zone banks,” Laidi said.

The day’s hard number was from the Labor Department, which said the number of U.S. workers filing new claims for jobless benefits unexpectedly rose for the week ended June 20 by 15,000, to 627,000. Ccontinuing claims—those drawn by workers for more than one week—climbed 29,000, to 6,738,000. Both numbers had fallen the previous week.

Source: Dollar Backs Off

There was a wealth of data, albeit inconclusive, to pick through yesterday. Leading off, the Commerce Department reported that new single-family home sales advanced in April for the second time this year. Sales increased 0.3% from March, to an annual pace of 352,000 houses, a weaker showing that economists expected.

Next, the Labor Department said initial jobless claims fell by 13,000, to 623,000, in the week ended May 23, from a revised 636,000 the prior week. That was a lower number than forecast, and it led Mickey Levy, chief economist at Bank of America in New York, to comment that, “The pace of job declines is lessening … This along with some other indicators points to a trough in the recession.”

Finally, the Commerce Department reported a 1.9% increase in durable goods orders for April, the biggest jump since December 2007. It followed a revised 2.1% drop in March that was more than twice as large as previously estimated. Orders, however, remain stuck near a 13-year low.

While the contraction may be slowing, there are few signs of nascent growth. “We have a tough slog ahead of us,” said Carl Riccadonna, a senior economist at Deutsche Bank Securities in New York. “The recovery is going to be very slow in its emergence.”

The euro got a boost as the European Commission’s gauge of economic sentiment across the eurozone posted a stronger-than-expected rise in May, to 69.3 from 67.2 in April. That was slightly above forecasts, and marked the second consecutive monthly rise for the index, although from historically low levels.

Source: Dollar Declines

Front and Center this morning the Big Dog (euro) has left the porch and is chasing the dollar down the street! I got home yesterday afternoon, rested, and then checked the currencies at the NY closing before they handed the books over to Japan, and saw that the euro had leap-frogged to the 1.39 handle! WOW! What was going on?

Well… First of all… Didn’t I tell you long ago that whenever the fundamentals returned to the markets that had been absent since July of 2008, we would see the dollar return to the underlying weak trend? OK… I don’t know if this is “exactly” what’s happened, but I do know this… The negativity toward owning dollars is growing like a nut-grass weed does on hot summer days. I also know that ever since the euro moved higher than its 200-day moving average on May 8th, there’s been little or no looking back. And… To finish this up, people are beginning to notice the monetary policies of the U.S., the rising deficits, the supply that’s needed to finance the deficits, and… The thought that the U.S.’s credit rating could be downgraded… OUCH! Hey! That’s going to leave a mark!

Seriously though… This would not be a good thing… You know, Bill Gross of PIMCO, the world’s largest bond house, right? I’ve quoted him on quite a few occasions in the past… Well, anyway, Bill Gross, said that he believed that the U.S. would eventually lose their Triple A (AAA) rating…

Don’t look for any answers from that crew on CNBC! Don’t know if you caught my appearance on the CNBC Power Lunch yesterday… But, they had this “lynching mob” ready and waiting for me… I was told by the producer that I would get a chance to tell my “story” on the comment I made the other day about the PPT. (Plunge Protection Team) BUZZZZZZZZ, WRONG! Thank you for playing, there’s a nice parting gift for you at the door! As I tried to put the whole thing into context, one of the “lynch mob” said to me, “You’re losing me”… Oh really? You only have an attention span of 1 minute? Any way… I know, I know, these guys are there to entertain, not inform… and they thought it was entertaining to mock me, rather than listen and maybe have their viewers informed…

OK… I know, my public relations people will be reeling this morning when they read that, but… I just had to get it off my chest. The mass media is so to blame for a lot of this mess we’re in… The sat there and said nothing… They looked the other way, while the Gov’t slowly tears at our Constitution… OK, I had better stop now!

Back to currencies, because THAT’S the story of today! It sure looks like the scene we’ve seen before when the dollar reaches this threshold of major weakness again… It looks like the scene, it smells like the scene, walks like the scene, it must be the scene! The dollar is once again on the threshold of major weakness!

Why do I think the “fundamentals” have come back into play? Well… Bad data… Since July of last year, we’ve been in this funky trading theme that rewarded the dollar, every time things looked bad in the U.S. for the economy… However, in the last week, we’ve begun to see a change… Not a “sea change” yet… But a change… And this is when you want to get in on something, not after the “sea change” has come! Then you’re chasing the market…

Yesterday’s bad data came on two fronts, one that everyone had the chance to see, and one you would have to pay close attention to… 1. Initial Jobless Claims rose again last week. This time to 637,000, which was higher than forecast, and the previous week’s number was revised upward… And then number 2. The Fed left the markets out on a line… You see they did NOT purchase as many Treasuries as the markets believed they would… On the outside that would seem to be a good thing… But underneath the covers, things are different… The markets took this lower bond purchase by the Fed as an indication that they will have to come back and do more later, as the Fed attempts to hold down long term Treasury yields… And in doing so… The dollar will get stuck in the middle. In fact, here’s the dollar’s new song… Clowns (bad data) to the left of me, Jokers (the Fed) to the right, here I am stuck in the middle with you!

Yesterday was also a very bad day at Red Rock for not only the dollar, but stocks, and bonds! You don’t normally see days like that… I read somewhere that there have only been 18 days since 1990 that we’ve seen a day like yesterday! Stocks and bonds both getting sold? Where were the funds going from those sales? Ahhhh grasshopper, this is playing out just as I told you it would when the safe haven buying of Treasuries were reversed… The funds, yesterday, were obviously going toward currencies and metals!

And, the currencies and metals have added to their gains from yesterday in the overnight markets! And going into a thinned out Friday, before a holiday weekend, trading… This could get ugly for the dollar today… If I had been standing on the sidelines waiting to get in, I don’t think today would be the day… Although the currencies might continue this move higher, I just don’t think that chasing a market in a thinned out market, is the prudent thing to do… And on the other side, we could just as easy see a big sell off today… Because, as I always tell you, be yourself! No, wait, that’s Tutor Turtle and Mr. Wizard talking… I always tell you that in thinned out markets, you can see wild swings…

OK… So it wasn’t just the Big Dog, euro kicking sand in the face of the dollar bulls yesterday… All the little dogs were able to get off the porch and chase the dollar down the street too. For instance the Canadian dollar / loonie reached .8875, a level it hadn’t traded at since October of last year! Aussie dollars (A$) has a 78-cent handle, something it hasn’t seen since October of last year… And look at the Indian rupee go! And Gold is $955!

When we return on Tuesday of next week, the data cupboard will be overflowing with data here in the U.S. All sorts of Housing data, which I can’t see as anything good for the dollar, given the new direction and return to fundamentals.

Currencies today 5/22/09: A$ .7835, kiwi .6190, C$ .8870, euro 1.3955, sterling 1.5880, Swiss .9175, rand 8.33, krone 6.3880, SEK 7.5225, forint 199.50, zloty 3.1325, koruna 19.1550, yen 94, sing 1.4430, HKD 7.7518, INR 47.11, China 6.8232, pesos 13.14, BRL 2.03, dollar index 80.15, Oil $61.60, Silver $14.65, and Gold… $955

This week’s highlighted Company…. “My online business, Cool Cribs Lifestyles, started last August and has skyrocketed higher than initial goals ever imagined. We sell high quality Spiritual Living products that have meaning behind them and are chosen with love and care. As so many people are looking for sense behind all the turmoil they see in daily life and on the news, they are reaching out for items to warm their hearts and comfort their souls. This is the niche we fill. We love what we do, provide excellent customer service and offers products chosen with love.

Aside from this, we also sell the coolest retro handsets for cell phones that harkens back to the old days. This is one hot little item we simply can’t keep in stock.”

Source: A Rare Day, Indeed!

Oil rose above $36 a barrel on Friday after the United Arab Emirates joined leading exporter Saudi Arabia in deepening supply curbs in line with OPEC’s biggest ever output cut announced last week.

U.S. crude gained $1.01 to $36.36 a barrel by 1219 GMT, off a session high of $36.90.

London Brent rose 94 cents to $37.55.

“The only positive news (for the market)… came from the UAE,” Olivier Jakob of Petromatrix wrote in a report. “For now at least, Saudi Arabia and the UAE seem to be fully complying with the cuts.”

Abu Dhabi National Oil Co (ADNOC), the main producer in the UAE, the world’s fifth-largest oil exporter, said it would cut supplies of February Murban and Upper Zakum allocations by 15 percent and Lower Zakum and Umm Shaif by 10 percent each.

A source with an Asian refiner said the ADNOC cuts were more than expected.

“ADNOC had already allocated January volumes, but they reversed the decision, so that messes up our schedule,” the source said. “For February, the reduction volumes are very large, so we may need to adjust our ship loadings.”

The allocations follow a decision last week by the Organization of the Petroleum Exporting Countries to reduce supplies by 2.2 million barrels per day.

Saudi Arabia informed its customers even before the OPEC meeting they would be receiving less oil.

The OPEC reduction is its deepest ever as the producer group battles a market slump that has sliced around $110 off the price since a July peak above $147 a barrel.

Oil markets were closed on Thursday to mark Christmas Day.

On Wednesday, U.S. crude had settled more than $3 lower after U.S. inventory data showed a fall in crude stocks, but rises in inventories of refined products and another slowdown in fuel demand.

Negative economic data, including news jobless claims in the United States, the world’s biggest oil burner, had risen to a 26-year high and that consumers had cut spending for the fifth consecutive month in November, deepened the bearishness.

Asian economies, once seen as a guarantee of high oil demand even if the United States faltered, have not escaped.

Japan’s deepening recession is expected to cut oil demand in the world’s third-biggest oil consumer after the United States and China, by almost 5 percent in the year starting April.

Consumption was also seen sliding by 5.7 percent in the fiscal year ending next March, the Institute of Energy Economics, Japan, said this week.

Barbara Lewis, LONDON, Dec 26 (Reuters)

Initial applications for jobless benefits climbed by 58,000 to 573,000 in the week ended Dec. 6, upwardly revised from 515,000 the previous week, the U.S. Labor Department reported yesterday (Thursday).  The figure was the highest since 1982, and far exceeded the median projection of 525,000 put forth by 39 economists surveyed by Bloomberg News.

The increase was due, in part, to a bounce from the week before, which was shorter because it included the Thanksgiving holiday. Government offices were open only four days that week.

Nevertheless, the four-week average, which smooths out fluctuations, stood at 540,500.  That’s the biggest number of jobless claims filed since December 1982, when the economy was also mired in a deep recession. By comparison, there were 337,000 initial claims last year.

Workers claiming continuing jobless benefits also blew through economists’ projections, jumping by 338,000 to 4.4 million, the Labor Department said. Economists had expected 4.1 million. Continuing claims lag initial claims by one week.

“Stepping back from the short-term noise … it is very clear that the underlying trend in claims is still rocketing, as companies throw in the towel and prepare for a long, deep recession,” Ian Shepherdson, chief U.S. economist for High Frequency Economics, wrote in a research note to clients, MSNBC News reported.

Jobless claims are considered by economists to be a snapshot of the health of the labor markets and broader economy.

The U.S. economy has shed 1.9 million jobs so far this year, with payrolls having now dropped for 11 straight months. U.S. companies slashed 533,000 jobs in November, and the unemployment rate grew to 6.7% , the highest since 1974, the government said last week.

“The labor market is facing its worst crisis since 1982, and it is certainly not over yet,” said Harm Banholtz, a U.S. economist at UniCredit Markets and Investment Banking in New York, told Bloomberg News. “One of the most important tasks of the newly elected government is, therefore, to help distressed homeowners and to stimulate the labor market.”

More companies added to the malaise  yesterday as additional layoffs were announced. New Britain, Conn.-based toolmaker Stanley Works (SWK) plans to lay off 2,000 workers and close three manufacturing plants.  Illinois-based foodmaker Sara Lee Corp. (SLE), said it had outsourced 700 jobs overseas, and Office Depot Inc. (ODP) is adding 2,200 cuts of its own over the next three months. The office-products firm is closing 112 stores – about 9% of those in the North American market – and six of its 33 distribution centers.

Looming over the jobless picture is the uncertainty surrounding the $14 billion automakers bailout bill, currently being mulled in the Senate.  But even with a bailout, one – or even all three – of America’s “Big Three” carmakers may fail.
If a bailout doesn’t materialize – or fails to have the desired impact – the results will be catastrophic, according to the Center for Automotive Research.  The Ann Arbor, Mich.- based nonprofit told The Associated Press that if Detroit’s Big Three stopped making cars today and returned to 50% production in 2010 and 2011, it would still wipe out nearly 2.5 million jobs next year.
Job losses of that magnitude would have a profoundly negative impact on the U.S. economy – with horrid ripple effects worldwide – because of the plunge in consumer confidence the resultant job losses and loss of confidence that would result. Fully 70% of all domestic economic activity is powered by consumer spending.  And with the cutbacks some doomsayers foresee, even exporters in developing markets as far away as China and India would feel the squeeze.

Here at home, the mere threat of job losses is being felt on Main Street. According to an Associated Press-GfK poll released Wednesday, 53% of shoppers say they expect to spend less on holiday gifts than they did last year, while 40% will spend the same.

In other words, more than 90% of American shoppers are resisting the urge to splurge and spend more this year than last on friends and family during the holiday period, a time retailers depend on for  as much as 40% of their revenue for the year. That spells big trouble for retailers nationwide, with the possible exception of Wal-Mart Stores Inc. (WMT) , and other large discounters.

Also buttressing the curtailed spending argument is a new poll that says just 20% of shoppers plan to use credit cards for holiday purchases.  That’s down a whopping 33% from 2004. And two-thirds of the consumer surveyed said they would pay off the full balance owed when the bills come due in January, the poll found.

Source: U.S. Companies “Throw in the Towel” – Pushing Jobless Claims to a 26-Year High

• South Africa’s central bank cut a half-percentage point from its benchmark interest rate, marking the country’s first interest rate reduction in more than three years, Bloomberg reported. The growing global crisis, rising unemployment and falling commodity prices are hampering growth for the emerging economy.

• Asset manager BlackRock Inc. (BLK) cut 500 jobs, Chief Executive Laurence Fink said Thursday. Many of the job losses were part-time employees, Reuters reported. BlackRock is the largest publicly traded U.S. asset manager.

• Second-quarter profit rose 13% for Empire Co., owner of Canada’s second-largest supermarket chain. Net income rose $53.6 million and revenue increased 7% for the three months through Nov. 1, Bloomberg reported.

• KB Toys Inc. yesterday (Thursday) filed for bankruptcy protection for the second time in four years and plans to hold going-out-of business sales at its stores immediately. The 86-year-old company said in a filing that its debt is “directly attributable to a sudden and sharp decline in consumer sales,” an indication of how poor this holiday season has been for many retailers.

• Light, sweet crude for January delivery yesterday (Thursday) rose $4.46 to settle at $47.98 a barrel on the New York Mercantile Exchange. Oil spiked 12% earlier in the day approaching $49 a barrel.

• Citigroup Inc. (C) and UBS AG (UBS) yesterday (Thursday) agreed to buy back a total of nearly $30 billion in risky auction-rate securities that the Securities and Exchange Commission said the banks marketed to customers as safe. Tens of thousands of the customers bought the auction-rate securities before the $330 billion market froze in mid-February, the SEC said.

• Bank of America Corp. (BAC) said yesterday (Thursday) that it plans to cut up to 35,000 jobs over the next three years. The bank said the reductions are aimed at eliminating redundancies resulting from its merger with Merrill Lynch & Co. Inc. (MER), as well as the recessionary environment.

Source: Global Investing Roundups Friday, December 12th, 2008

• China’s exports fell 2.2% and imports plummeted by 17.9% in November, pushing its trade surplus to a record $40.09 billion, Bloomberg reported. “The figures are horrifying,” Lu Zhengwei, chief economist at Industrial Bank Co. in Shanghai, said. “Plunging imports show that on top of faltering global demand, domestic demand is also shrinking as the economy cools.”

• Global mining leading Rio Tinto PLC (ADR: RTP) announced it would slash 14,000 jobs (or 13% of its workforce), sell more assets and halve its capital spending. “Drastic times call for drastic measures… They’ve definitely gone into survival mode, which is appropriate given the market circumstances,” Tim Schroeders, portfolio manager at Pengana Capital in Melbourne, told Reuters.

• Despite ascending unemployment numbers, Wells Fargo & Co. (WFC) Chief Executive John Stumpf said Wednesday he is seeing signs of a bottom in the U.S. housing market. “My suspicion is there is some more to go. But we’re starting to see some early signs that maybe we’ve reached the bottom in housing or close to it,” Stumpf said at Goldman Sachs Group Inc.’s (GS) U.S. Financial Services Conference, Reuters said.

• Egypt’s Orascom Telecom Holding landed a contract to provide mobile phone services in North Korea, a company source told Bloomberg. The deal marks the first foreign telecommunications deal on the recluse Communist country’s turf.

• Office Depot Inc. (ODP) will close about 9% of its North American stores and cut 2,200 jobs over the next three months, The Associated Press reported yesterday (Wednesday). The plan to close 112 stores will reduce the chain’s base to 1,163. Office Depot will close 45 stores in the Central United States, 40 in the Northeast and Canada, 19 in the West and eight in the South.

• Solar cell maker JA Solar Holdings Co. (ADR: JASO) yesterday (Wednesday) cut its fourth-quarter revenue and production outlooks as a result of declining demand. The China-based company lowered its revenue forecast to $124 million, from an earlier estimate $191 million to $220 million. The company also cut its estimates for 2008 production output to between 250 and 260 megawatts from 310 megawatts.

Source: Global Investing Roundups Thursday, December 11th, 2008

Meantime, oil feels even more bullish… like everything is conspiring to drive this commodity higher. May futures for West Texan Crude are up another two dollars as I write to $108 and change – and the momentum seems to be building.

I’ll have more on that in a moment, as Garry White explains just why this market is on fire… and how you could profit.

Beat the stampede: tune in at 10am tomorrow for your chance to join Time Trader…

But first, I’ve got some important news for anyone looking to start shadowing the most talked about trader on our books. If you missed last month’s sign-up opportunity, get ready for another chance.

Keep an eye out after 10am tomorrow. As I mentioned in Friday’s Profit Watch, the doors are about to open up again for our Time Trader service. Based on the rush we saw last month, I’m expecting quite a stampede as ambitious traders look to get into the next trade.

I’ll tell you more tomorrow, but here’s a little “heads-up” about what this entails. I want to make sure you are one of the first to read about this opportunity when I send it tomorrow.

First up, this is not the kind of trading where you need to chain your self to your computer. All you need is a mobile phone and to meet some selection criteria to make sure you’re the right kind of investor… and you’re ready to roll.

How just one trade a month made this guy half a million pounds in six months…

You see, Robin Tracey, the mastermind behind Time Trader, makes just one trade per month. That’s all he needs. He’s been utilising this “one trade a month” work ethic for the last ten years and it has helped him become a millionaire. In fact, when we were working with Robin to launch this service, he made half a million pounds in just six months – purely from the trades he made following this strategy.

Adrenalin seekers who want the thrill of trading in and out of the market on a weekly, daily or even hourly basis, this might not be what you’re after – although you could certainly add it to your weaponry (and when you see how it works, you might just give up the manic trader lifestyle and opt for this less stressful one!)

If you’re the kind of trader who’s looking for a less stressful strategy, but with great profit potential, then tune in tomorrow… I’m pretty sure this could be what you’re after.

Profit Watch readers are top of the list – you’re the right calibre

As usual, Profit Watch readers will be among the first to see this opportunity. Robin Tracey is looking for a certain calibre of trader to join him for his next trade and I think you’re more qualified than most. I’ve got you to the top of the list – so take a look tomorrow and see if you’d like to test out this fascinating strategy for playing the markets. There’s nothing else like it that I’ve seen.

I’m quite sure you’re busy – too busy to be watching your inbox, waiting for my message tomorrow. So to make it easy, I’ll make sure I send details at 10am tomorrow – you should have it by 10.30am. Take a look and see what you think – if you like the sound of Time Trader, grab that place while it’s there. The next trade is coming very soon.

$100/barrel: a new base for oil – here’s why it could go higher…

Despite concerns about a rocky global economy, the oil price has found a floor at $100,” says Garry White of Smart Commodities. “WTI futures have hit $106.7 this morning, boosted by a small refining fire at an Exxon operation in Los Angles on Friday, continuing concerns about the dollar and the first fall in Opec output since August last year.

$106.7? That’s old news, Garry – as I write, the price is a few cents shy on $109 for May delivery.

Bloomberg reports: “Crude oil jumped more than $2 a barrel and gasoline rose to a record as investors looking for an inflation hedge and higher returns flocked to commodity markets.

Fine, so oil’s going up – that’s nothing new for regular readers of Profit Watch. We’ve been riding this trend since we launched in 2003. What we really want to know is how long can it last… and what does it mean to us as investors? How can we make money from it?

Garry White has the answer. That’s his thing – he writes about oil, gas, gold, in fact all commodities for his group of resource investors. He’s clear about oil:

Despite the threat of a global recession the oil price has remained above $100. This is not just speculation because, if it was, the oil price would have retracted with the gold price. It has outperformed gold over the last two weeks.

First-quarter earnings season kicks off in the US later day with Alcoa. When the oil companies start posting their corporate earnings I believe they will be significantly above consensus, prompting a re-rating of the sector as a whole.

What “Peak Power” means for oil…

I believe this will continue for the next few quarterly earnings reports – and possibly well into next year if “Peak Power” bites the Middle Eastern oil producers hard.

All this means great news for certain suppliers of other energies. With the oil price remaining above $100 and with subsidised fuel set to become a thing of the past… cheaper, but equally efficient, forms of energy will see a massive surge in demand.

One company I’m tipping is already doing exceptionally well and is set to go from strength to strength as “Peak Power” and reduced subsidies continue to drive up the price of oil.

So Garry’s advice to his readers right now is clear: Buy commodities – and oil in particular. If you’re looking for his specific profit plays – ones you can make easily through your own stock broker with easily traded shares – then just get on board his Smart Commodities letter. You’ll learn all about “Peak Power” and what it means for oil investors.

To find out why oil is one of Garry’s Power Trends – 5 trends that could see smart investors make an absolute killing in the months ahead – click here

Past performance is not a reliable indicator of future results. Your capital is at risk when you invest in shares, never risk more than you can afford to lose. Please seek independent financial advice if necessary.