CommStock Israel Investor Insights Newsletter
Israel Investor
Insights Newsletter
Monday, December 29th, 2008
The following report has been prepared as a courtesy
to clients of CommStock Trading Ltd. for general informational
purposes only and is not intended to, and should not, be construed
as any recommendation or advice for any specific investment decisions.
1) Bonds up, dollar steady in post-holiday trade
Treasurys
trade narrowly higher as the dollar is mostly unchanged in
a day devoid of economic indicators.
By David Goldman,
CNNMoney.com staff writer
Last Updated: December 26, 2008: 3:51 PM ET
NEW YORK (CNNMoney.com) -- With few investors trading and fewer
indicators to base trades on, the dollar and government bonds
held tight Friday.
Treasurys resumed trade Friday after the market was
closed Thursday for the Christmas holiday. Some bond market participants
took an extended break, and many foreign investors are off for
Boxing Day.
Despite a record auction of $120 billion in bonds earlier
in the week, the huge increase in Treasury supply has done little
to move bond prices significantly lower or yields higher off their
all-time lows.
Private investor and corporate demand for government
bonds remains high, as the stock and commodities markets continue
the volatility that has persisted throughout the year and especially
in the past three months. Looking for a safe alternative, investors
have opted to buy up Treasurys with the hope that government bonds
will provide a secure investment - if yields are low.
As a result, Treasury bonds have been one of the best
performing assets this year, returning 14.3% to investors, according
to a Lehman Brothers index. Investors holding S&P 500-based
index funds, on the other hand, have lost more than 40% of their
investment so far in 2008.
Most economists say dour economic news will continue
well into next year, and analysts forecast Treasurys will continue
to rise for at least several more months, pushing yields even lower.
Yields on the 2-year, 10-year and 30-year Treasurys all hit record
lows last week before rising slightly in the past three sessions.
Bond prices: The 10-year note edged
up 15/32 to 114 10/32, and its yield fell to 2.16% from 2.14% from
Wednesday. Bond prices and yields move in opposite directions.
The 30-year long bond rose 20/32 to 138 22/32, and yielded
2.6%, down from 2.63%.
The 2-year note rose 1/32 to 99 31/32, and its yield
dropped to 0.9% from 0.92%.
The yield on the 3-month note rose held steady at 0.015%,
though it has been hovering around 0% for two weeks. Yields near
the zero mark on short-term bills are an indication that investors
are completely risk-averse, prioritizing safety above profit.
Libor rates, which have fallen considerably since the
credit crisis' peak in late October, were not tallied Friday due
to the bank holiday in the U.K.
Dollar: The U.S. dollar fell very slightly
against the euro but rose against the yen and pound as investors
digested a barrage of economic data ahead of the holiday.
Analysts said dollar movements were very subtle due
to such low trading volume, and do not reflect any trend or economic
news. Markets were mostly closed abroad.
The euro edged 0.3% higher against the dollar to trade
at $1.4072, from $1.4028 late Wednesday in New York.
The British pound fell 0.2% to $1.4697 from $1.4728.
Against the Japanese yen, the dollar rose 1.5% to ¥90.57
from ¥90.96.
2) Commentary by David Zwebner, CEO of CommStock
Trading
3 days to the end of 2008….and our Kivun Commstock Commodity
Futures Fund (no. 5107966) is still the leading publicly traded
Mutual Fund in Israel for the period January- Dec 2008…….. J
U.S. Economy
The Federal Reserve gave its approval for GMAC to become a bank
on Wednesday. The change gives the company access to more lending
from the Fed and probably saves it from bankruptcy. The September
eurodollars finished up .02 at 98.635.
According to MasterCard's SpendingPulse, U.S. consumer
spending was down slightly in both November and December from a
year ago.
Grains and Cotton
The USDA said that, as of last week, 2008-2009 exports of:
Corn remained down 38% from a year ago.
Soybeans remained up 12% from a year ago.
Wheat slipped from down 15% to down 16% from a year ago.
Cotton improved from down 3% to down 2% from a year ago.
March cotton was down .18 at 46.18.
March corn closed up 14.25 cents at $4.122, the highest
close in seven weeks, and March soybeans were up 37.5 cents at
$9.565, the highest close in six weeks, both boosted by concerns
about hot and dry weather in Argentina and southern Brazil.
Late Wednesday, Mexico banned the importation of meat
from 30 U.S. processing plants in 14 states, reportedly due to
food safety concerns. Some say that the real reason may be that
Mexico objects to the new country-of-origin labeling law that the
U.S. enacted on October 1st. February cattle fell 2.22 to 86.10.
After the close, the USDA estimated this week's beef
production at 352.8 million pounds, down 7.4% from a year ago.
Pork production was estimated at 357.2 million pounds, down .4%
from a year ago.
Energies
Is crude oil getting close to its lows? March crude oil closed
up $2.30 at $40.53, helped by buyers looking for bargains.
Metals
February gold jumped up $23.20 to $871.20, the highest close in
over two months, helped by falling interest rates around the
globe and increased demand for gold coins and bars ever since
the financial panic hit.
Currencies
Japan's government said that factory output was down 8.1% in November,
the largest monthly decline since records began in 1953. The
March yen ended up .0015 at 1.1057.
David Zwebner, CEO
CommStock Trading Ltd.
Tel: +972-(0)2 624-4963
Fax: +972-(0)2 624-4876
www.ecommstock.com
3) A Fan of Forex?
Interested in reading perspectives and analyses on the
Forex market? In learning what factors affect the Forex market
every week and what to be on the lookout for? In getting trade
recommendations? Email mona@ecommstock.com to
get your copy of a weekly Forex report.
4) Closing Prices for Friday, December
26, 2008
Amidex: Amidex35 (Class No Load Shares),
$9.09; Index, 1159.14, Daily Change, .71%; “A” Shares NAV, $7.00.
Global Asset Management: Capital
Appreciation, $179.83; Composite Absolute Return, $768.54; Diversity,
$650.26; GAMCO, $545.33; Interest Trend, $159.91; Trading IV-US$
Class, $145.63; US$ Special Bond Fund, $300.12.
Invesco: Asian Equity Core, $2.77; Bond, $27.13;
Emerging Markets Bond, $14.90; European Bond, EUR 4.4282;
Gilt, GBP 13.13; Global High Income, $8.55; Japanese
Equity Core, $1.05; UK Equity, GBP 4.10.
JPMorgan Fleming: JF Eastern Smaller
Co., $54.79; JF Japan, JPY 10,841; JF Japan Equity, $9.84;
JF Japan OTC, JPY 722; JF Japan Smaller Companies, JPY
25,908; JF Japan Technology, JPY 27,907; JF Korea, $22.33;
Pacific Securities, $137.22; Pacific Smaller Companies
$13.75; Global Bond & Currency, $22.71;
JF America, $30.51; JF Europe, $25.85; JF Germany, EUR
14.02; JF Global Equity, $25.91.
PCP: Emerging Markets, $12.72; Balanced,
$6.48; Aggressive, 5.86.
Platinum (updated once a month – October 2008
Prices): Equity Plus, $81.86.
Scottish Provident: Adventurous 1,
GBP 2.175; Balanced 1, GBP 1.864; USD Adventurous 1, $1.392;
USD Balanced 1, $1.634; USD Cautious 1, $1.712; For
Preference: Baring GUF Eastern Europe, $53.51;
Fidelity Funds International, $21.730; Invesco Asian
Equity Core, $2.860.
Mona Liss
CommStock Trading Ltd
PO Box 7777
Jerusalem 91077
Tel: +972-2-6244963
Fax: +972-2-625 9515
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