CommStock Israel Investor
Insights Newsletter
Monday, February 23, 2009
We are pleased to advise that effective February
1st, 2009, our Fund is being hosted with Altshuler Shaham, ( http://www.invest-as.com/ ) one
of Israel’s leading brokerage firms.
The name of our Fund has now been changed to
Altshuler Shaham (6F) Commstock Commodity
Fund No. 5107966.
We believe that with our new association with
Altshuler Shaham we will be able to provide our customers with
the required level of expertise needed to traverse the difficult
financial challenges ahead.
Our fund is up 3.38 % for January 2009.
Our Fund was one of the two leading Funds for
2008, yielding 21.45% NET.
Details on our Mutual Fund can be found on www.ecommstock.com
Fully regulated, transparent and traded daily
on the Tel Aviv Stock Exchange
1) Dollar in temporary free fall
Decline against major currencies likely
'not going to be sustained,' says analyst, as euro rebounds
from near three-month low.
February 20, 2009: 2:49 PM ET
NEW YORK (Reuters) -- The U.S. dollar fell across the
board in volatile trading Friday as some investors sought to lock
in the currency's steep gains ahead of the weekend.
The euro staged a sharp rebound in midday trading, soaring
above $1.2835, with most analysts saying the move was driven more
by technical factors than fundamental news.
"The triggering of stops has aggravated the move," said
Marc Chandler, global head of currency strategy at Brown Brothers
Harriman in New York. "It is a thin Friday move that is probably
not going to be sustained or lead to follow-through dollar selling
early next week.
The market was also abuzz with rumors that a U.S. bank
rescue plan might lead to nationalization, sending bank stocks
sharply lower.
U.S. Senator Christopher Dodd, who chairs the banking
committee, however told Bloomberg that while the nationalization
of banks is possible, the Obama Administration is trying to avoid
this happening.
The dollar had earlier rallied across the board as tumbling
stocks and worries about ailing banks and the global economy boosted
the greenback's safe-haven appeal.
In midday trading in New York, the euro rose as high
as $1.2838, according to Reuters data, and was last up 0.8% on
the day at $1.2763 It hit a nearly three-month low at $1.2511 on
Wednesday
The ICE Futures U.S. dollar index, which tracks the
value of the greenback against a basket of six currencies, was
down 0.5% at 87.009.
The dollar also fell nearly 1% to ¥93.4, while the euro
was up 0.1% at ¥119.31.
Hopes for a solution to alleviate the euro zone's problems
also lent some support to the euro, traders said. Concerns over
the damage to euro zone banks from a severe recession in Eastern
Europe have weighed on the currency heavily in recent days.
Germany's foreign minister said on Friday a process
had begun to consider how financially strong euro zone nations
could help weaker members of the currency union, though it was
too early to say what measures might be taken.
Frank-Walter Steinmeier, who is also vice-chancellor
in the ruling coalition, made his comments after a report by Der
Spiegel magazine said that the German finance ministry was
looking at possible rescue measures for other euro zone states.
Despite the sharp sell-off in the dollar on Friday,
some analysts said the move is unlikely to be sustained.
"Right now we're in a period where it's not a matter
of looking at what is the strongest currency. It's more which currencies
are the weakest," said Tim O'Sullivan, chief dealer at Forex.com
in Bedminster, New Jersey.
"The Eastern European scenario that's playing out is
having a negative impact on the euro specifically and it's having
a knock-on effect on the pound as well. I think that could be the
theme for the next several months."
2) Commentary by David Zwebner, CEO of CommStock Trading
Some thoughts on the present economic world crisis……
Most, if not all banks in the world, are effectively
bankrupt and governments will have little choice than letting
some go bust while nationalizing others.
The economic situation is only going to get
worse on all fronts which will lead to tremendous social unrest
around the world. Like a snowball coming down a mountain, as
it gets closer to the bottom the velocity increases and we will
be hearing more and more bad news unfolding quicker. More scandals,
which in turn effect the insurance firms, who in turn raise their
premiums which in turn pressure the financial institutions who
are already suffering from massive losses, reduced income and
increased overheads.
Governments run on revenues from taxes, but
as the world economies slow down, so do tax revenues. This will
lead to governments raising taxes and more investigations being
launched by tax authorities… (this may be the only area which
will actually increase employment).
This is of course counter productive to growth,
but governments will prefer staying in power as the lesser of
two evils.
Governments are trying to inflate their economies
by printing money…..but the average man is holding on to his
wealth for dear life. Although Gold is going up as a hedge against
both inflation and a “safe haven” in uncertain times, you can
be sure that governments will not allow the money to go into
Gold instead of into the economy where it can produce more taxes,
so while Gold will continue to rise…(and we have been trading
long gold OPTIONS since the mid $700 level in our Fund) they
will take steps to temper the PACE of the rise….either by taxing
it, or by selling gold on the open market, or both. We recommend
only using GOLD OPTIONS to trade these markets as they are, and
will continue to be, highly volatile.
U.S. Economy
The U.S. Labor Department said that the consumer price index was
up .3% in January and even with a year ago. Excluding food and
energy, prices were up .2% in January and up 1.7% from a year
ago. The December eurodollars finished up .06 at 98.54.
Bad economic news is dominating the markets again today
and most commodities are lower. The March U.S. dollar index has
also been seen as a "safe haven," but today closed down 1.05 at
86.70.
Is the federal government planning to either nationalize
or re-privatize Citigroup or Bank of America? Many commentators
are wondering.
Grains and Cotton
The USDA said that, as of last week, 2008-2009 exports of:
Corn remained down 41% from a year ago.
Soybeans improved from up 14% to up 15% from a year ago.
Wheat fell from down 18% to down 19% from a year ago.
Cotton remained down 2% from a year ago.
May corn fell 3 cents to $3.59.
May wheat ended down a half-cent at $5.305 with warm
and windy conditions in the south-central U.S. where the winter
wheat crop is planted.
Cocoa
May cocoa fell $140 to $2,430, the lowest close in over a month,
pressured by a gloomy outlook for the world economy.
Sugar
The private firm, Kingsman, increased its estimate of the 2008-2009
world sugar production deficit from 9.7 to 11.6 million tons
due to lower production in China and India. May sugar ended down
.11 at 13.06.
Orange juice
Freezing temperatures may hit northern Florida this weekend, but
the citrus crop is expected to remain safely warm. May orange
juice fell 1.10 to a new contract low of 66.30.
After the close, the USDA said that there were 1.19
billion pounds of frozen orange juice in storage on January 31st,
up 42% from a year ago.
Metals
Gold and silver continued to thrive on bad economic news. April
gold closed up $25.70 at $1,002.20, the highest close in eleven
months. May silver finished up 55.8 cents at $14.53, the highest
close in six months.
The International Copper Study Group's preliminary data
showed that world copper production outpaced consumption by 147,000
tons in the first eleven months of 2008, down from a 143,000 ton
surplus a year ago. May copper closed down 5.50 cents at $1.4330,
the lowest close in four weeks.
Energies
May crude oil was down .34 at $42.17 with ongoing concerns about
sluggish world demand.
Currencies
The U.K.'s Office for National Statistics said that retail sales
were up .7% in January and up 3.6% from a year ago, better than
expected. The March British pound closed up 1.39 cents at $1.4438.
Statistics Canada said that its consumer price index
was up 1.1% in January from a year ago. The core price index was
up 1.9% in January from a year ago.
Japan's Cabinet Office downgraded its assessment of
the economy for the fifth consecutive month. The March Japanese
yen closed up .0135 at 1.0731.
Mexico cut its interest rate from 7.75% to 7.50%.
David Zwebner, CEO
CommStock Trading Ltd.
Tel: +972-(0)2 624-4963
Fax: +972-(0)2 624-4876
www.ecommstock.com
|
