31 Aug
Daily Market Commentary

Stocks End Relatively Flat In Final Week of August

Long-Term Look At The US Stock Market

Friday, August 31, 2012
Stock Market Commentary:

The benchmark S&P 500 index and Dow Jones Industrial average remain perched just below their recent 52-week highs as they pause to consolidate their recent two month rally. At this point, this appears to be a normal correction however, if the selling intensifies one should quickly adjust your portfolio accordingly. The underlying notion that has helped stocks rally has been further easing from global central banks. Some market participants are hoping that the tepid economic and earnings data we have seen recently will force at least one of the prominent central bank’s hand into another round of easing in the near future. From our point of view, the noose is around the ECB’s neck, not the Fed’s to act.

Monday-Wednesday’s Action- Stocks Perched Below Resistance:

Stocks were quiet on Monday as investors waited for Bernanke’s speech from Jackson Hole on Friday. The big news over the weekend was that Apple (AAPL) was awarded $1billion after winnning its patent dispute with Samsung. It was encouraging to see the latest flurry of merger and acquisition announcements. Kenexa (KNXA) surged 41.4% after IBM (IBM) agreed to purchase the human resources management software company for $1.3 billion. Other M&A news came when Hertz Global Holdings (HTZ) announced plans to purchase Dollar Thrifty Automotive Group (DTG). The transaction, which began five years ago, values Dollar Thrifty at $2.3 billion, or $87.50 per share. In addition, Hertz has announced an agreement to sell its Advantage unit to Franchise Services of North America and Macquarie Capital. Finally, Hudson City Bancorp (HCBK) soared 15.7% after M&T Bank (MTB) said it will acquire the bank in a $3.7 billion deal.

Stocks were quiet on Tuesday as the final week of August dragged on. European stocks slid after Spain’s GDP contracted by a larger amount expected by economists. In the US, Tropical storm Isaac disrupted offshore oil production and made landfall in Louisiana. Interestingly, Wednesday marked the 7 year anniversary of Hurricane Katrina. Charles Evans, President of the Chicago Federal Reserve Bank, said the central bank should “take action now,” and buy bonds for as long as it takes to help stimulate the ailing jobs market and the broader economy.
Stocks continued to consolidate their recent move with another quiet day on Wednesday. On average, the economic news in the US was positive. The Fed’s Beige Book said “economic activity continued to expand gradually in July and early August.” This helped alleviate pressure for QE 3 and bodes well for the fragile economic recovery. The beige book compiles economic conditions from the 12 Fed districts around the country. Q2 GDP was revised up to +1.7% which topped the initial reading of 1.5% and the Street’s estimate of 1.6%. The GDP Deflator was unchanged and showed a 1.6% increase. Finally, pending home sales for July rose by 2.4% which was better than the Street’s forecast for an “unchanged” reading and June’s negative reading of -1.4%.

Thursday & Friday’s Action: Stocks End Week On A Positive Note

Stocks fell on Thursday as fresh EU woes resurfaced and hopes dimmed that Bernanke would announce QE 3 at his annual meeting in Jackson Hole on Friday. The IMF said it sees a “major challenge” in implementing emergency measures for Greece. Separately, Slovak Prime Minister, Robert Fico, suggested there was a 50% chance of a euro area breakup which rattled investors. Economic data from the US was not exciting. The Labor Department said weekly initial jobless claims count totaled 374,000, which was a little higher than the average estimate for 370,000. Meanwhile, continuing claims, fell to 3.316 million from 3.321 million. A separate report showed that personal income rose by 0.3% in July, which matched estimates. Personal spending rose by 0.4%, which was lower than the expected reading of +0.5%. Core personal consumption expenditures were flat month-over-month which missed estimates for a gain of +0.1%. Stocks rallied on Friday even though Bernanke did not announce QE 3 but left the door open for more easing in the future. The “big” news that helped stocks rally came from Europe when Spain announced the creation of a “bad” bank and a rumor spread that Bundesbank President Jens Weidmann, one of the most vocal opponents to the much anticipated ECB bond-buying plan, might resign. Bernanke, as expected, did nothing and left the door open for more easing- if needed. On average, US economic data was mixed to slightly better than expected on Friday.

Market Outlook- Confirmed Rally

From our point of view, the market is in a confirmed rally which means the path of least resistance remains higher. It is encouraging to see all the major averages trade near their 2012 highs! Technically, the 200 DMA line and June’s lows are the next level of support while April’s highs are the next level of resistance for the major averages.  As always, keep your losses small and never argue with the tape. If you are looking for specific help navigating this market, feel free to contact us for more information.
26 Aug
Media Quotes

Adam Sarhan Wall Street Journal Quote: India's Weak Crops Hit Gold

WSJ LOGO


A Dry Spell Means Farmers Can’t Afford Jewelry for Weddings; ‘Where Is the Money for That?’
By TATYANA SHUMSKY in New York and BIMAN MUKHERJI in New Delhi
 
 

A sputtering start to this year’s monsoon rains has forced farmers in India to put their gold-buying plans on hold.
With crops wilting without the heavy seasonal rains that usually start in June, some farmers say it is unlikely they can afford the gold jewelry that is the centerpiece of most Indian weddings.
As the world’s biggest consumer and importer of gold, India helps set the direction of gold prices. The root of much of the demand comes from India’s countryside, home to hundreds of millions of farmers who often bear the burden of adorning their daughters, nieces and sisters with solid gold necklaces, bracelets and earrings.
The Bombay Bullion Association, India’s main gold industry group, estimates that the volume of the country’s second-quarter gold imports slid 60%, to 128 tons, from the year-earlier period, due largely to the weak monsoon so far. Before the start of rainy season, the group forecast a roughly 20% drop in gold imports for 2012, due to a weaker rupee, which makes gold more expensive for buyers in India, and widespread closings of jewelry stores earlier this year to protest new taxes. Now, it is projecting a drop closer to 40%.
Gold investors usually keep a close eye on the weather in India, and many of them are wagering that the weak rainy season will further undermine gold prices that are down almost 10% from the 2012 highs hit in late February.
Gold futures on Tuesday were down $1.70 an ounce at $1,611.20.
Azhar Sheikh Azhar, a 32-year-old farmer with an eight-acre property in Dahegaon Village, India, canceled plans for a lavish wedding with gifts of gold jewelry for his niece this year.
“Where is the money for that when we are having trouble thinking of the next meal for the family?” Mr. Azhar said.
Michael Shaoul, chairman of Marketfield Asset Management LLC, a mutual-fund adviser with more than $2.5 billion under management, has recently bet on lower gold prices as the outlook for India’s harvests worsened.
“In India, the monsoon is another negative factor” in addition to high interest rates, which encourages investors to keep cash in relatively high-yielding savings accounts, Mr. Shaoul said.
Adam Sarhan, founder and chief executive at asset-management firm Sarhan Capital, New York, cited the poor weather in India as a reason for recently dumping gold after holding the precious metal in his portfolio for more than a decade.
“As long as [Indian] demand continues to wane, we’re going to continue to see downward pressure on the price of gold,” Mr. Sarhan said.
To be sure, other factors could quickly overwhelm the gold market and send prices rising. Decisive moves by the world’s central banks to print money in order to stimulate the economy is likely to send gold surging, said James Dailey, lead portfolio manager at TEAM Asset Strategy Fund. Any easing could weaken the dollar or euro—or both—and send investors looking for a hedge into gold, he said.
“The marginal demand from investors in the developed world would overwhelm anything that is going on domestically in India,” he said.
Moreover, some investors point out that India’s dominant role in the gold market has been fading in recent years as its imports of the precious metal slowed.
URL: http://professional.wsj.com/article/SB30000872396390443792604577573253315230004.html

25 Aug
Media Quotes

Adam Sarhan CNBC.com Quote: Gold Climbs to $1,623 on Stimulus Hopes

Reuters


Published: Monday, 20 Aug 2012 | 3:45 PM ET
Gold futures rose to end at $1,623 as platinum prices jumped nearly 2 percent on Monday,  hitting a two-month high after deadly violence at a mine in top producer South Africa triggered heavy speculative buying on supply worries.
Bullion prices edged up as trading volume for U.S. gold futures was on track to hit a 2012 low, while silver jumped almost 3 percent as platinum’s rally triggered short-covering.
Investors bought platinum on worries that mines in South Africa may produce less of the metal after 44 people were killed during a strike at Lonmin’s [LMI.L  640.00  —  UNCH    ]Marikana mine, which accounts for 12 percent of global platinum output.
“Platinum could test its 200-day moving average above $1,500 on the possibility that the Marikana mine can be shut down for an extended period of time or that strike ends up spreading to other mines,” said Phillip Streible, senior commodities broker at futures brokerage R.J. O’Brien.
Spot platinum [XPT=  1525.00    -16.90  (-1.1%)   ] rose 1.6 percent to $1,487.49 an ounce, after hitting a high of $1,492.99 an ounce by 3:03 p.m. EDT, which marked its highest since June 18.
Trading volume of U.S. NYMEX platinum futures was 25 percent above its 30-day average, preliminary Reuters data showed.
Last week, platinum posted a 5-percent rally, its biggest weekly rise since February.
The metal soared 7 percent in the past three sessions, bringing its year-to-date gain to 7 percent, which means platinum has outperformed gold, silver and copper so far in 2012. On technical charts, platinum’s relative strength index is at 69.8, just a hair below 70 which is seen as overbought.
“Markets that are overbought can very easily get a lot more overbought before they go down,” said Adam Sarhan, CEO of Sarhan Capital.
Speculative fervor in platinum futures was evident even as about a third of the workforce trickled back to work at Lonmin on Monday. Analysts said the lost platinum production due to the work stoppage at Lonmin has been negligible so far.
Deutsche Bank said in a note that platinum market’s expected surplus for 2012 “could easily be wiped out” if labor violence prolonged at Lonmin or if the unrest spread to other mines.
Platinum’s climb also benefited sister metal palladium [XPD=  649.23    0.73 (+0.11%)   ], which rose to an eight-week high at $608.50 an ounce in early trade. It was up 0.4 percent at $607.70.
Platinum Discount Narrows
Platinum’s rise narrowed its discount to gold to less than $130 an ounce from above $230 an ounce a week ago.
Platinum’s rally has lifted gold and silver, which have been recently trading in a range on speculation about whether the U.S. Federal Reserve and the European Central Bank  could launch more gold-friendly monetary stimulus  .
Spot gold [XAU=  1669.74    -0.11  (-0.01%)   ] was down 0.3 percent at $1,620.74 an ounce by 3:03 p.m. EDT.
U.S. gold futures [GCCV1  1670.70    0.10  (+0.01%)   ] for December delivery settled up $3.60 an ounce at $1,623.
Silver [XAG=  30.59    -0.18  (-0.58%)   ] gained 2.7 percent at $28.79 an ounce.
Buying by central banks, a major support to bullion prices this year, was evident again last month, after Russia’s central bank said on Monday that it added another 18.7 tonnes of gold to its reserves in July.
URL: http://www.cnbc.com/id/48720030

25 Aug
Media Quotes

Adam Sarhan Investor's Business Daily Quote: Platinum Flying On Mine Turmoil In South Africa

IBD-Investors.com


Posted 08/20/2012 06:21 PM ET
Platinum jumped nearly 2% Monday, hitting a two-month high after deadly violence at a mine in top producer South Africa triggered heavy buying on supply worries.
Investors bought platinum on worries that mines in South Africa may produce less of the metal after 44 people were killed during a strike at the Marikana mine owned by Lonmin, which accounts for 12% of global platinum output.
“Platinum could test its 200-day moving average above $1,500 on the possibility that the Marikana mine can be shut down for an extended period of time or that the strike ends up spreading to other mines,” said Phillip Streible, commodities broker at R.J. O’Brien.
Spot platinum rose 1.6% to $1,487.49 an ounce, after hitting a high of $1,492.99 — its highest level since June 18 — by 3:03 p.m. ET.
The metal soared 7% in the past three sessions, bringing its year-to-date gain to 7%, which means platinum has outperformed gold, silver and copper so far in 2012. On technical charts, platinum’s relative strength index is at 69.8, just a hair below 70, which is seen as overbought.
“Markets that are overbought can very easily get a lot more overbought before they go down,” said Adam Sarhan, CEO of Sarhan Capital.
Speculative fervor in platinum futures was evident even as about a third of the workforce trickled back to work at Lonmin on Monday. Analysts said the lost platinum production due to the work stoppage at Lonmin has been negligible so far.
URL: http://news.investors.com/article/622832/201208201821/platinum-flying-on-mine-turmoil-in-south-africa.htm?ven=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20InvestingRss%20(Investing%20RSS)

25 Aug
Media Quotes

Adam Sarhan Reuters Quote: Gold posts best week since January on stimulus hopes

Reuters


By Frank Tang
NEW YORK | Fri Aug 24, 2012 3:57pm EDT

(Reuters) – Gold prices ended flat on Friday as the market took a breather after surging to a four-month high on Thursday on fresh hopes for a new round of U.S. monetary stimulus.
Platinum posted a second strong week of gains, up 5 percent, and is up nearly 9 percent this month after an outbreak of violence at a platinum mine in South Africa left 44 people dead. The African nation supplies about 80 percent of the world’s platinum.
Bullion was up 3.4 percent on the week, its biggest weekly gain since the last week of January, spurred by minutes of the U.S. Federal Reserve’s August meeting released Wednesday which showed policymakers were ready to deliver more stimulus “fairly soon” unless the economy improves considerably.
A new round of quantitative easing — printing money to buy government bonds to keep long-term interest rates low — fueled fears of inflation further down the track. The first two rounds of U.S. quantitative easing have fuelled a doubling of gold prices in the last four years.
The news lifted gold out of the near $100 range it had held since mid-May and above its 200-day moving average for the first time since March. However, gold’s relative strength index suggests the market might be slightly overbought following a seven-session rally that was snapped on Friday.
“Gold has this week broken out of its well-defined, multimonth downward trendline. That resistance which kept gold in a range in the last several months should become a new level of support, suggesting gold is not going down but going higher,” said Adam Sarhan, CEO of Sarhan Capital.
Spot gold was down 3 cents at $1,670.01 an ounce by 2:22 p.m. EDT (1822 GMT). It hit $1,674.80 on Thursday, its highest price since April.
U.S. gold futures for December delivery settled down 10 cents at $1,672.90 an ounce. Trading volume was about 35 percent below its 30-day average, preliminary Reuters data showed.
Holdings of gold exchange-traded funds, which issue securities backed by physical metal, hit a record 71.253 million ounces, Reuters data showed on Friday.
“The perception that the Fed is closer to QE than any time since this time last year has helped drive gold higher. The preservation-of-capital type money managers will likely find gold more attractive now than they had any time in the past four months when price had been stuck in a range,” said Carlos Perez-Santalla, trader at PVM Futures.
Other precious metals retreated along with gold, with platinum up 0.5 percent at $1,545.49 an ounce, off Thursday’s near four-month high of $1,558.49 an ounce.
World No. 1 platinum producer Anglo American Platinum (AMSJ.J) said on Friday 100 workers had refused to go underground at its Thembelani mine in South Africa, a sign that simmering discontent in the sector has not been contained.
Silver was up 0.4 percent at $30.64 an ounce, while spot palladium slid 0.2 percent to $648.47 an ounce.
(Additional reporting by, Jan Harvey and Charlotte East in London; editing by Jim Marshall)
URL: http://www.reuters.com/article/2012/08/24/us-markets-precious-idUSBRE87501B20120824

25 Aug
Media Quotes

Adam Sarhan Reuters Quote: COMMODITIES-Nine-week rally shows signs of fatigue, gold flat

Reuters


Fri Aug 24, 2012 5:28pm EDT
* CRB index, down on day, logs eighth weekly rise in 9 wks
    * Some say rally petering out as grains, oil short of highs
    * Gold back in favor with best weekly gains since Jan
    By Jonathan Leff
    NEW YORK, Aug 24 (Reuters) – Commodity markets fell for a
second day on Friday as the longest rally since early last year
showed signs of running out of steam, with grain traders having
adjusted to a drought-stricken crop and oil dealers bracing for
a possible release from strategic crude stockpiles.
    Gold was the outlier, holding steady on the day to secure
its biggest weekly gain since January, with traders looking for
U.S. Federal Reserve Chairman Ben Bernanke to drop more hints
about a possible third round of quantitative easing at the
bank’s Jackson Hole, Wyoming, enclave next weekend.
    While other markets succumbed to a degree of technical
selling in subdued summer trade, gold has drawn strength from
breaking out of the $100 range it had held since mid-May and
above its 200-day moving average for the first time since March.
    “That resistance which kept gold in a range in the last
several months should become a new level of support, suggesting
gold is not going down but going higher,” said Adam Sarhan, CEO
of Sarhan Capital.
The Thomson Reuters-Jefferies CRB index, which dipped
0.4 percent, ended the week 0.8 percent higher, its eighth rise
in nine weeks and taking total gains since late June to over 14
percent, the biggest and longest such streak since early 2011.
    Raw materials broke with the broader mood in risk markets
like stocks, which gained modestly, while the euro rebounded
from session lows after central bank sources told Reuters that
the European Central Bank is considering targeting a yield band,
an option gaining favor among central bankers.
    However the decision would not be made before the ECB’s
Sept. 6 policy meeting and it was not clear how wide the band
would be or how the ECB would decide when to intervene in the
bond markets.
    Benchmark Brent crude for October delivery closed at
$113.59 a barrel, falling $1.42, or 1.23 percent after a report
that the International Energy Agency may tap into strategic oil
reserves as early as September after dropping its resistance to
a U.S.-led plan to offset the impact of Iran sanctions.
    But oil was still on track toward the biggest two-month gain
since the start of 2011, up 16 percent since June as deep North
Sea maintenance and hope for further central bank stimulus
stoked prices to the highest since May.
    Corn fell for a third day while soybeans climbed
just before an after-hours crop tour report showed fields in
even worse condition than the U.S. Department of Agriculture
estimated two weeks ago. Some traders expect prices will have to
scale new peaks in order to curb demand.
    On a front-month basis, corn’s blistering 45 percent
surge in June and July — the biggest such gain since the last
devastating drought in 1988 — has stalled as traders come to
grips with the sharply reduced harvest.
    NARROW, NOT BROAD
    Unlike the broad commodity rallies in recent years, the
latest run-up since June has been focused almost wholly on oil
and grains, with metals and soft commodities sitting it out,
analysts at Barclays noted in a report on Friday.
    “With fundamental risk still tilted to the upside in these
two sectors and anticipation of QE3 starting to boost the more
sluggish precious metals markets as well, we would be very
cautious in fading this rally just yet,” they said in a note.
    Gold, one of the world’s best-performing assets since 2008,
ran out of steam a year ago after hitting a record above $1,920
an ounce, but has lately shown signs of regaining its mojo. It
is up 3.3 percent so far in August, its best gain since January.
    Trading activity on Friday was light, with grains volume a
third below normal and U.S. crude down a quarter. Dealing may
also be limited on Monday, which is a UK holiday, and through
next week ahead of the Sept. 3 U.S. Labor Day holiday.
    Speculators like big hedge funds, a number of which have
been badly burned in the past few years, have remained largely
on the sidelined in recent months.
    The value of managed money holdings in 22 commodity futures
markets stayed at around $60 billion in the week to Tuesday, the
seventh week in a row at that level, with net flows slipping by
a meager $15 million, according to Commodity Futures Trading
Commission data released on Friday.
    FICKLE INVESTORS
    After nearly a decade in which investors steadily plowed
more money into commodity markets, flows have vacillated for
most of the past year, causing some to ask whether the
super-cycle of steadily appreciating prices had ended.
    Barclays estimated that net investor in-flows to commodity
products fell to just $463 million in July, less than a tenth as
much as June, although total assets in the market rose $16
billion to more than $400 billion due to price appreciation.
    Precious metals saw the greatest out-flow, while a
relatively small $400 million flowed into agricultural markets,
despite the onset of the worst U.S. drought in five decades.
    “Investors continue to regard all growth-sensitive assets
with caution at present and that is hampering commodities, with
the situation made worse by the particular sensitivity of
commodities to China where fears of a hard landing and a
potentially sharp contraction in commodity imports remains at
the forefront of investors’ concerns,” they said.
 Prices at 4:45 p.m. EST (2045 GMT)
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    95.98    -0.29  -0.3%   -2.9%
 Brent crude                113.38    -1.63  -1.4%    5.6%
 Natural gas                 2.702   -0.100  -3.6%   -9.6%
 US gold                   1672.90     0.10   0.0%    6.8%
 Gold                      1669.40    -0.64   0.0%    6.8%
 US Copper                  348.35    -0.90  -0.3%    1.4%
 Dollar                     81.633    0.273   0.3%    1.8%
 CRB                       306.040   -1.200  -0.4%    0.2%
 US corn                    808.50    -5.75  -0.7%   25.1%
 US soybeans               1724.25    18.25   1.1%   43.9%
 US wheat                   898.50    -5.75  -0.6%   37.6%
 US Coffee                  162.90     1.05   0.6%  -28.6%
 US Cocoa                  2397.00    12.00   0.5%   13.7%
 US Sugar                    19.58    -0.01  -0.1%  -15.7%
 US silver                  30.621    0.165   0.5%    9.7%
 US platinum               1553.40    -0.50   0.0%   10.6%
 US palladium               652.15    -4.45  -0.7%   -0.6%
24 Aug
Daily Market Commentary

Stocks Snap 6-Week Rally

Matter of Time Until The Next Massive Rally!

Friday, August 24, 2012
Stock Market Commentary:

The benchmark S&P 500 index and Dow Jones Industrial average snapped a 6-week rally after encountering resistance near their 2012 highs. The underlying notion that has helped stocks rally has been further easing from global central banks. Some market participants are hoping that the tepid economic and earnings data we have seen recently will force at least one of the prominent central bank’s hand into another round of easing in the near future. At this point, this appears to be a normal correction however, if the selling intensifies one should quickly adjust your portfolio accordingly.

Monday-Wednesday’s Action- Stocks Hit Resistance:

Stocks were relatively quiet on Monday after a report in a German magazine said the ECB would set a limit for sovereign debt yields for certain debt-laden countries. The report also said that the ECB would step up and buy the troubled bonds if their spreads over safe-haven German bunds exceeded a certain level. Aetna (AET) said it would acquire Coventry Health Care (CVH) for $5.7 billion in cash and stock. Stocks in Europe and Asia were mixed to slightly lower on Monday.
Stocks fell on Tuesday from a logical area of resistance (their 2012 highs). Normally, prior chart highs serve as important levels of resistance which means it might take some “time” before the market can trade above them. However, the fact that the major averages are trading near their 2012 highs bodes well for this rally, the risk-on theme, and the general economy in general. Stocks negatively reversed on Tuesday (opened higher but closed lower) which typically means a change in trend is on the horizon- especially after a 6-week rally. Volume, an important component of institutional sponsorship, remains below average which is also normal for this time of year as most of market participants enjoy the last few weeks of the summer. At this point, we should note that the market is due for a little pullback and adjust our positions accordingly. However, if the bulls continue to send stocks higher we will be along for the ride.
Stocks ended spent most of Wednesday’s session in the red but managed to close mixed to slightly higher after the minutes of the FOMC meeting were released. The minutes showed that there definitely is a serious discussion between members regarding QE3. Fed officials mostly agreed that additional easing would be necessary and help support the anemic economic recovery if conditions deteriorated. That said, there was a general consensus on Wall Street that the fact that the Fed did not shun the idea means that QE3 will happen which bodes well for risk-on assets.

Thursday & Friday’s Action: EU Woes Resurface

Stocks opened lower on Thursday after investors digested the latest round of tepid economic data. The Labor Department said jobless claims unexpectedly rose to the highest level in five weeks. Jobless claims rose by 4,000 to a seasonally adjusted 372,000 which topped the Street’s estimate for a reading of 365,000 new filings. The one somewhat positive data point in the current batch of economic data was that US manufacturing edged higher in August. The “flash” US manufacturing PMI index rose to 51.9 which topped the boom/bust level of 50. The news overseas was less than stellar. The data in Europe all but confirmed that the euro-zone is in their second recession in three years. Even Germany, the region’s economic powerhouse, is beginning to feel the effects of the debt crisis. Data out of China echoed a slowing, not growing economy. China’s manufacturing index slid to a nine-month low, which reiterated the notion that the global economy is slowing, not growing. Stocks were quiet on Friday after durable goods orders topped estimates in July. The two bright spots were aircrafts and automobiles. However, when you remove transportation goods, durable goods slid and missed expectations.

Market Outlook- Confirmed Rally

From our point of view, the market is in a confirmed rally which means the path of least resistance remains higher. It is encouraging to see all the major averages trade near their 2012 highs! Technically, the 200 DMA line and June’s lows are the next level of support while April’s highs are the next level of resistance for the major averages.  As always, keep your losses small and never argue with the tape. If you are looking for specific help navigating this market, feel free to contact us for more information.
22 Aug
Media Quotes

Adam Sarhan Reuters Quote: Copper climbs to one-month high after Fed minutes

Reuters


By Chris Kelly
NEW YORK (Reuters) – Copper prices in New York extended gains to new one-month highs in after hours trade on Wednesday after minutes of the most recent Federal Reserve policy meeting indicated the central bank was likely to further ease monetary policy “fairly soon” unless the economy improves.
“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” the Fed said in minutes to its July 31-August 1 meeting.
“For the most part, the minutes really show that the Fed continues their wait-and-see approach to deciding whether or not they are going to ease,” said Adam Sarhan, chief executive of Sarhan Capital.
“If the Fed really has the intention of making a move sooner rather than later, we’ll see it either in Jackson Hole, or soon thereafter,” he said referring to the Federal Reserve Bank of Kansas City’s meeting in Wyoming on August 31.
COMEX copper for September delivery climbed to a late-session peak at $3.48 per lb, its priciest level since July 20, and more than 2-1/2 cents above its earlier settlement price of $3.4545.
COMEX copper volumes stood at 58,000 lots in late New York business, more than a third above the 30-day average, according to preliminary Thomson Reuters data.
At the London Metal Exchange (LME), three-month copper ended off $5 at $7,605 a tonne, after touching a one-month high at $7,648.
That weakness stemmed from a broader reduction of risk after Japan said its exports slumped the most in six months in July as shipments to Europe and China fell.
But investors were encouraged by U.S. housing data that offered further signs of a modest recovery in the beaten down sector and a decision by the world’s largest miner BHP Billiton to hold off on big projects reflected copper’s tight supply base.
“U.S. data has been one source of upside surprises. It has been a bit more supportive for the metals over the last few months compared with data from Europe and China,” Gayle Berry, an analyst at Barclays Capital, said.
“Given how negative market sentiment is towards global growth generally, any positive data is enough to lend a bit of support to (metals) prices.”
BHP Billiton (BHP.AX) (BLT.L) said it would delay its planned $20 billion Olympic Dam copper expansion and would approve no major projects in the year to June 2013 as it battles escalating capital costs.
“It’s not only them … markets are thinking that if BHP is saying this, who is next,” Bart Melek, head commodity strategist with TD Bank Financial Group said.
Dan Brebner, an analyst at Deutsche Bank said the company’s decision was a “longer-term positive” for the metal markets.
“But I think it reflects not only caution by the mining companies but also their difficulty in seeing how commodities will perform or how metals markets will evolve over the next couple of years,” he said.
Growing speculation that the European Central Bank will soon take action to tackle the debt crisis that has blighted major economies encouraged investors, but they were still wary after previous promises failed to live up to expectations.
Greek Prime Minister Antonis Samaras started a European charm offensive with an appeal to Germans for more time to meet Athens’ borrowing obligations, but he may struggle to make his case in a series of meetings this week with EU leaders.
(Additional reporting by Susan Thomas, Charlotte East and Harpreet Bhal in London, Melanie Burton in Singapore; editing by Jane Baird, Marguerita Choy and Sofina Mirza-Reid)
URL: http://www.reuters.com/article/2012/08/22/us-markets-metals-idUSBRE87J01Z20120822

20 Aug
Media Quotes

Adam Sarhan Reuters Quote: PRECIOUS-Platinum hits 2-month high on S.Africa supply fear

Reuters

Reuters


Mon Aug 20, 2012 1:17pm EDT
* Speculators bet on fall in S. Africa platinum output
* Charts show platinum near overbought territory
* Gold-platinum spread narrows after platinum rally
By Frank Tang
NEW YORK, Aug 20 (Reuters) – Platinum prices jumped nearly 2 percent on Monday, hitting a two-month high after deadly violence at a mine in top producer South Africa triggered heavy
speculative buying on supply worries.
Gold edged up 0.3 percent as inflow into the holdings of the world’s largest bullion-backed exchange-traded fund boosted
sentiment, and silver jumped 2 percent as platinum’s rally triggered short-covering.
Investors bought platinum on worries that mines in South Africa may produce less of the metal after 44 people were killed
during a strike at the Marikana mine owned by Lonmin , which accounts for 12 percent of global platinum output.
The metal soared 7 percent in the past three sessions, bringing its year-to-date gain to 7 percent, which means
platinum has outperformed gold, silver and copper so far in 2012.
 
On technical charts, platinum’s relative strength index is at 69.8, just a hair below 70 which is seen as overbought. “Markets that are overbought can very easily get a lot more
overbought before they go down,” said Adam Sarhan, CEO of Sarhan Capital.
Momentum buying should further underpin platinum after it climbed to a two-month high and on its outperformance in the
metals complex, Sarhan said. Spot platinum rose 1.8 percent to $1,491.49 an ounce, after hitting a high of $1,491.99 an ounce which marked its
highest since June 18.
Last week, platinum posted a 5 percent rally, its biggest weekly rise since February.
Speculative fervor in platinum futures was evident even as about a third of the workforce trickled back to work at Lonmin
on Monday. Analysts said the lost platinum production due to the work stoppage at Lonmin has been negligible so far.
Deutsche Bank said in a note that platinum market’s expected surplus for 2012 “could easily be wiped out” if labor violence
prolonged at Lonmin or if the unrest spread to other mines. Platinum’s climb also benefited sister metal palladium
, which rose to an eight-week high at $608.50 an ounce in early trade. It was up 0.2 percent at $603.60.
 
PLATINUM DISCOUNT NARROWS
Platinum’s rise narrowed its discount to gold to less than $130 an ounce from above $230 an ounce a week ago.
Platinum’s rally has lifted gold and silver, which have been recently trading in a range on speculation about whether the
Federal Reserve and the European Central Bank could launch more gold-friendly monetary stimulus.
Spot gold was down 0.3 percent at $1,620.99 an ounce by 12:33 p.m. EDT (1633 GMT).
U.S. December gold futures for December delivery climbed $4.30 an ounce to $1,623.70.
Silver gained 2.2 percent at $28.64 an ounce. Buying by central banks, a major support to bullion prices this year, was evident again last month, after Russia’s central
bank said on Monday that it added another 18.7 tonnes of gold to its reserves in July.
 
Prices at 12:33 p.m. EDT (1633 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold 1623.70 4.30 0.3% 3.6%
US silver 28.590 0.588 2.1% 2.4%
US platinum 1497.00 23.90 1.6% 7.0%
US palladium 606.80 1.70 0.3% -7.5%
 
Gold 1620.99 5.40 0.3% 3.7%
Silver 28.64 0.61 2.2% 3.5%
Platinum 1491.49 26.99 1.8% 7.1%
Palladium 603.60 1.30 0.2% -7.5%
 
Gold Fix 1615.00 -0.25 0.0% 2.6%
Silver Fix 28.10 -10.00 -0.4% -0.3%
Platinum Fix 1462.00 8.00 0.5% 5.9%
Palladium Fix 598.00 3.00 0.5% -6.0%
URL: http://www.reuters.com/article/2012/08/20/us-markets-precious-idUSBRE87501B20120820

17 Aug
Daily Market Commentary

Another Positive Week On Wall Street

Long-Term Look At The US Stock Market

Friday, August 17, 2012
Stock Market Commentary:

The benchmark S&P 500 index has rallied in 9 of the past 11 weeks which shows how strong this market actually is. The underlying notion that has helped stocks rally has been further easing from global central banks. Some market participants are hoping that the tepid economic and earnings data we have seen recently will force at least one of the prominent central bank’s hand into another round of easing in the near future.

Monday-Wednesday’s Action- Stocks Edge Higher:

Stocks ended mixed on Monday but continued trading in a relatively tight trading range as this market continues to coast through the final weeks of summer. The standout winner for us on Monday was Google (GOOG- which we own for full disclosure). The stock rallied nearly +3% on Monday after announcing plans to cut 4,000 jobs from its Motorola Mobility business and said it will acquire Frommer’s from publisher John Wiley & Sons (JWA). This sent shares of Yelp (YELP) and TripAdvisor (TRIP) lower -7.7% and 4.5% respectively on the news. In other news, the volatility index, or the VIX,  fell to levels not seen since June of 2007! For what its worth, that was four months before the market topped out in 2007 and we all know what happened in 2008.
Stocks opened higher but ended flat on Tuesday after the latest economic data from the US and Europe was mixed to slightly better than expected. US retail sales swelled by +0.8% in July which topped the Street’s forecast for a gain of +0.2%. Excluding autos, retail sales increased by +0.8% which also topped the Street’s expectation for a gain of 0.3%. Overall producer prices rose by +0.3% in July which barely beat the Street’s estimate for a gain of +0.2%. The report showed that core producer prices increased by +0.4% which was higher than the +0.2% consensus. GDP in the eurozone fell slightly in the third quarter however the “big” miss that everyone was expecting did not occur. Wednesday was another flat, light volume, tight trading range day on Wall Street as the summer doldrums remain in full gear. Economic data was in-line to slightly better than expected. Inflation pressures remained at bay evidenced by an unchanged reading in the consumer price index. This missed the Street’s expectation for a gain of +0.2%. Core prices, which exclude food and energy, also missed estimates with a gain of +0.1%.

Thursday & Friday’s Action: Merkel Sparks Broad Risk-on Rally

Stocks rallied on Thursday after German Chancellor Angela Merkel backed the European Central Bank’s efforts to combat the euro zone debt crisis. Merkel publicly supported ECB president Mario Draghi’s comments that the ECB will do whatever it takes to defend the euro. Merkel made it clear that his comments echoed views of other European leaders. News on the economic front was mixed. The Philly Fed survey fell for the fourth consecutive month while weekly jobless claims rose to a seasonally adjusted 366,000, matching expectations. The Commerce Department said housing starts unexpectedly fell last month to a seasonally adjusted annual rate of 746,000 units. The report also lowered June’s initial reading which is not ideal. Stocks on Friday were quiet as investors digested the latest round of economic data. US consumer confidence jumped to its highest level since May which bodes well for the broader economy. The Conference Board said leading indicators rose +0.4% in July to 95.8 which topped the Street’s estimate for a gain of 0.2%.

Market Outlook- Confirmed Rally

From our point of view, the market is in a confirmed rally which means the path of least resistance remains higher. It is encouraging to see all the major averages trade back near their 2012 highs! Technically, the 200 DMA line and June’s lows are the next level of support while April’s highs are the next level of resistance for the major averages.  As always, keep your losses small and never argue with the tape. If you are looking for specific help navigating this market, feel free to contact us for more information. That’s what we are here for!
12