Wednesday, June 3, 2009

Market Reflections 6/2/2009

Markets took a breather following Monday's surge amid talk that stocks and commodities are overbought and particular talk that oil is most overbought of all. But as long as green shoots keep appearing, talk is not likely to turn into selling. Pending home sales, helped by first-time buyer credits, proved much better than expected and point to continuing gains for existing home sales -- a result that would finally justify expectations that the housing sector has bottomed. Vehicle sales proved surprisingly strong in May, showing a 7 percent gain vs. April and pointing to strength in next week's big retail sales report.

The S&P 500 gained 0.2 percent to just under 945. Oil ended at $68.50 ahead of tomorrow's meeting between President Obama and his host King Abdullah of Saudi Arabia who some are saying may offer a cooperative statement on oil prices. Gold ended at $981 with silver just under $16. The dollar continues to fall, reflecting a move out of safety and also questions on the risks of inflation. The dollar index fell 1.0 percent to 78.40 for the lowest level since October.

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