Financials & Metals Review On May 25th, 2011

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Stocks are still wavering form concerns about Europe's debt crisis and the Japanese economy. Greece has no ideas on how to control their current debt issue. Japanese exports fell in April and experts are questioning if the country can rebound. Also, the Treasury wants to sell its remaining shares in AIG at $29, which is the low end of where the government was expected to sell them. This would be considered a break-even trade with no profits. (1) Costco announced earnings and showed $324 million in earnings compared to $306 million last year. Net sales rose 16% to $20.19 billion and stores that have been open for 12 months or more showed an increase of 12% in sales. (2) Heavy machinery, airplanes, autos, and computers saw a decrease in orders. Durable goods fell 3.8% and this is the biggest drop in over 6 months. Analysts believe this is a temporary decline and that demand both foreign and domestic is strong. Because of a weak dollar factories have been exporting high volumes in the United States. Over 167,000 jobs have been created on the past 6 months. (3)

The sentiment on the floor seems to have a nervous feel. Traders seem to be hedging positions with treasury, gold, and oil vehicles. This could continue as more sell orders are coming down to the posts. Keep watch for potential trade recommendations.

Take a look to metals market. Precious metals firming up again today with Silver on the rise by more than $1 to above $37 even as the USD strengthens this morning. Precious metals have been climbing higher since the word of the European debt crisis has come into fold again as money is being shifted out of the Euro and into Gold. I look for the Gold market to test $1,535 by this week as these markets are still on the rise. Copper is significantly higher today even as everything else is lower as demand outlook is rising in the base metal. This market trades at $4.09 looking to break $4.11 resistance.

There is risk of loss in all commodities trading. Losses can exceed your account size and/or margin requirements. Commodities trading can be extremely risky and is not for everyone. Some option strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading.


About the Author:
About the Author

A Pitguru's Commodities Writer. Learn Forex trading & Futures Trading seem to be a good way to earn money. Trading in futures and options involves a substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. Learn more about silver futures!



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