The price of gold was showing down $8 per ounce early on, which using the “Ure Ratio” seems to suggest that the Dow could drop 70-100 points at the open. Already – a couple of hours before today’s open, headlines were about that “Stock set to slide at opening” were making the rounds.
Although it has been a little slower than I was expecting, we are nevertheless seeing the decline shape up that I outlined a couple of weeks back. In that scenario I suggested that the decline of the dollar was being way overplayed and when too many people start getting on board with an idea (“Quick…buy gold right now…”) it usually means – at least to me – that it’s time to ‘go the other way’ and vote against the herd. I then suggested (to much scorn and derision, I’d add from the Gold $10,000 crowd) that I’d buy some put options at $1,000 and wait for what could be a declined to (you’re not going to like this) as low as $700.
Do I think gold will go that low? No. But, is this a tradable decline? We’ll let account balances at the end of November judge that. It wouldn’t be the first time I’ve gotten the directions right and the investment vehicle wrong, but we shall see.
How much of the recent run-up in gold was so Russia could get top dollar when it was panning to offload $1.7 billion worth of gold? No telling, but since word of their planned sale leaked, gold has been headed down…might be related.
A bit of good news before the open has reduced pressures on gold and stock futures though. And that is….
Improving Durables
A new durable goods report out from Census this morning:
“New orders for manufactured durable goods in September increased $1.6 billion or 1.0 percent to $165.7 billion, the U.S. Census Bureau announced today. This was the second increase in the last three months. This followed a 2.6 percent August decrease. Excluding transportation, new orders increased 0.9 percent. Excluding defense, new orders increased 0.5 percent. Machinery, up five of the last six months, had the largest increase, $1.7 billion or 7.9 percent to $23.4 billion.
Shipments
Shipments of manufactured durable goods in September, up three of the last four months, increased $1.3 billion or 0.8 percent to $172.6 billion. This followed a 1.4 percent August decrease. Transportation equipment, also up three of the last four months, had the largest increase, $2.4 billion or 5.6 percent to $44.9 billion. This was led by nondefense aircraft and parts, which increased $1.4 billion.
Unfilled Orders
Unfilled orders for manufactured durable goods in September, down twelve consecutive months, decreased $3.3 billion or 0.4 percent to $733.6 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 0.4 percent August decrease. Transportation equipment, down eleven of the last twelve months, had the largest decrease, $4.8 billion or 1.1 percent to $426.3 billion.
Inventories
Inventories of manufactured durable goods in September, down nine consecutive months, decreased $3.1 billion or 1.0 percent to $305.0 billion. This followed a 1.5 percent August decrease. Transportation equipment, down two consecutive months, had the largest decrease, $2.0 billion or 2.2 percent to $89.1 billion.
Capital Goods
Nondefense new orders for capital goods in September increased $1.3 billion or 2.5 percent to $53.6 billion. Shipments increased $1.2 billion or 2.2 percent to $56.6 billion. Unfilled orders decreased $3.0 billion or 0.7 percent to $419.6 billion.
Inventories decreased $2.3 billion or 1.7 percent to $132.4 billion. Defense new orders for capital goods in September increased $1.0 billion or 10.0 percent to $10.9 billion. Shipments increased $0.5 billion or 5.1 percent to $11.3 billion. Unfilled orders decreased $0.4 billion or 0.3 percent to $140.3 billion. Inventories decreased $0.4 billion or 1.8 percent to $19.8 billion.
V as in “Vacant”
The Wall St. Journal online story “Landlords Sweeten Pot for Renters” oughta to give you a sense of how bad things are getting in commercial real estate. If you don’t have time to read the whole article, the chart about halfway down the article on the left says it all…vacancies are climbing like crazy.
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All of which has me thinking “Hmmm…what about getting some commercial office space, get the 6-months (or longer) of free rent, have the T.I. package (tenant improvements, yeh?) include a bathroom with a huge walk-in shower,….and seeing what that would cost. Depending on how desperate the landlord is, that’s a strategy to be considered, isn’t it? I mean if we really get to hyper-inflation (late spring 2010) then WTH?
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Or, you could simply move families into hotels that may be headed for trouble. The WSJ story “Hilton debt load weights on Blackstone seems related.
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New home sales – due out in a half hour, are expected to rise 2.6%. Methodology question: Is this ‘deals desked’ or actual closing, huh? Won’t spoil the question with an answer for you… but you see the gap.
Free Marketing Slogan
Word that Coca-Cola Enterprises had better than some thought earrings has spurred the creative juices. Out pops a new positioning statement for them: “Things go better with earnings,…” Like it? Has a nice ring to it, I thought.
Model C
Ford is leaning toward Geely of China for sale of their Volvo unit. Want another positioning statement? Sure: how about “The Great Car of China”? You know, playing off the Great Wall? Picks up on Volvo’s fine safety/reliability ratings…. Not this one either?
It’s Only Tax Money
Talk is that GMAC may go back to the trough for another injection of dough.
Bombings
Middle East bombs are going off like mad lately, it seems. The latest report is that a car bomb in NW Pakistan has killed at least 80 and mounded several times that.
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A lot closer to home, “2 charged by U.S. with plotting attacks” on a Danish newspaper.
Terms Talk & Deal Points
Iran meantime is talking about how it still has a right to nuclear development pn the one hand, while seeking to rewrite proposed deal terms with the West.
Meantime, the Obama administration seems to be hinting (as if having a general address the topic isn’t enough of a hint) that it has a response ready if the talks don’t move along smartly.
Latest rumored strike data is Halloween…but I’ve got a whole pile of ‘strike dates’ posted on the wall and no fresh glass anywhere…