Market Reflections 5/20/2009

Hedge fund money continues to move into commodities, pushing oil to $62 and gold to $935. Commodities from grains to base metals are all benefiting. A big reason for the move is weakness in the dollar which ended near its lowest levels of the year, at $1.3768 against the euro. Weakening demand for the dollar is tied to inflationary expectations, against which commodities are used as a hedge. The S&P 500 ended at its lows, down 0.5 percent at just over 900. News in the session was headed by FOMC minutes where economic assumptions were cut and that show some policy makers think they may need to further increase their quantitative easing program.