Pre-Market News and Views
This morning the S&P 500 e-mini futures(ES H1) are actually trading higher by 1.00 point to 1321.25 despite the surge higher in oil. Oil is trading higher today by $2.18 to $106.60 a barrel. This is a new 52 week high for crude as the violence in Libya continues to escalate. Other nations in the Middle East and Northern Africa continue to face protests and riots. This crisis in the region does not seem to be going away very soon.
The Asian markets were mixed overnight as the Nikkei 225(Japan), Hang Seng Index(Hong Kong), and Sensex Index(India), all traded lower last night. However, the important and highly followed Shanghai Index(China) traded higher by 1.85 percent. Whenever, the Shanghai Index is strong many of leading commodity stocks in the U.S. will be strong to start the day. Traders should watch Cliffs Natural Resources Inc.(NYSE:CLF), Freeport McMoRan Copper & Gold Inc.(NYSE:FCX), and Southern Copper Corp.(NYSE:SCCO) to be active at the start of the day.
The European Union continues to have problems this morning as the Greece debt is downgraded three levels by Moodys. Portuguese yields are also rising again to extremely high levels. This tells us that the European Central Bank has probably already stepped in and is purchasing Portuguese debt to keep the yields from surging further. When actions such as this is done by the central banks gold, and silver will usually trade higher and that is the case this morning. Gold and silver are both making new multi year highs this morning. The Currencyshares Euro Trust(NYSE:FXE) is trading higher before the opening bell at the NYSE by 0.30 cents to $139.58. Obviously, when the Euro is trading higher that means that the U.S. Dollar Index is declining. Anyone that is holding a dollar in their pocket this morning just lost a little more of their purchasing power. The U.S. Dollar Index is trading lower by 0.08 to $76.29. The U.S. Dollar Index has declined by 14.0 percent since June 7, 2010 when it was trading at $88.70.
Yields on the U.S. T-Note are trading higher this morning by 0.046 to 3.538%. This week the U.S. Treasury is going to auction off $66 billion in debt. The government will auction $32 billion of three-year notes tomorrow, $21 billion of 10-year securities on Wednesday, and $13 billion of 30-year bonds on March 10.
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