CommStock Israel Investor
Insights Newsletter
Monday, July 13th, 2009
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) Consumers feel more glum in July
The University of Michigan
confidence index falls in July as the recovery drags on.
July 10, 2009: 10:48 AM ET
NEW YORK (Reuters) -- U.S. consumer sentiment wilted
in early July to the weakest since March, when confidence in the
financial sector and economy were at a low ebb, the Reuters/University
of Michigan Surveys of Consumers showed on Friday.
Consumers' rising concerns about a
protracted economic downturn, job security and erosion of wealth
were the main factors depressing sentiment, the survey said.
Its preliminary index of confidence
for July fell to a reading of 64.6 from the final reading for June
of 70.8.
July's preliminary reading was well
below economists' median forecast for 70.5 and the first fall in
the index since February.
"It underlines the ongoing gloom facing
the U.S. consumer and further delays prospects for a near-term
recovery. That will weigh heavily on risk sentiment," said Brian
Dolan, senior currency strategist with Forex.com in Bedminster,
New Jersey.
After the report, stocks lost ground
and the dollar extended losses against the yen, while Treasury
bond prices added to gains, retesting the session highs on a safe-haven
bid.
The survey's index of consumer expectations
fell to 60.9 from June's final reading of 69.2.
The index of current economic conditions
slipped to 70.4 from June's final reading of 73.2.
"Consumers concluded that the economic
downturn would last longer and their personal finances would not
recover as quickly as they had previously expected," the Reuters/University
of Michigan Surveys of Consumers said in a statement.
Recent income gains were reported by
the fewest consumers in the more than fifty-year history of the
survey, the statement said.
Stocks' recent pullback has put renewed
pressure on household budgets. The S&P 500 index has fallen
about 4% so far in July.
"Consumers reported a larger negative shift in their
longer term outlook for the economy. The majority of consumers
thought that widespread unemployment would persist over the next
five years," the Reuters/University of Michigan Surveys of Consumers
statement said.
"People are probably unhappy with the
employment situation and the increase in energy prices we saw this
spring," said Gary Thayer, senior economist at Wells Fargo Advisors
in St. Louis, Missouri.
Consumers are concentrated heavily
on reducing outstanding debts. "Overextended finances and job and
income uncertainty have made consumers much more saving minded," the
Reuters/University of Michigan Surveys of Consumers statement said.
2) Commentary by David
Zwebner, CEO of CommStock Trading
U.S. Economy
The U.S. Census Bureau said that exports increased $1.9 billion
to $123.3 billion in May while imports fell $.9 billion to $149.3
billion. The result was net imports of $26.0 billion, the least
in nine years. The September U.S. dollar index closed up .38
at 80.43.
The University of Michigan's index of consumer sentiment
fell from 70.8 to 64.6 in July, weaker than expected. The December
2010 eurodollars were up .025 at 98.095.
Grains and Cotton
The USDA's 2009-2010 U.S. ending stocks estimate for:
Corn was increased from 1.09 to 1.55 billion bushels.
Soybeans was increased from 210 to 250 million bushels.
Wheat was increased from 647 to 706 million bushels.
Sugar was reduced from 459,000 to 359,000 tons.
Cotton was kept unchanged at 5.60 million bales.
The USDA's 2009-2010 world ending stocks estimate for:
Corn was increased from 125 to 139 million tons.
Soybeans was increased from 51 to 52 million tons.
Wheat was reduced from 183 to 181 million tons.
Cotton was increased from 57 to 58 million tons.
The USDA said that China bought 110,000 tons of U.S.
soybeans for 2009-2010. November soybeans started the day lower,
but ended up a penny at $9.17.
December wheat finished down 3.25 cents at $5.452, pressured
by today's increase in the USDA's ending stocks estimates for wheat.
October cotton closed up 1.28 cents at 60.39, the highest
close in five weeks with hot and dry conditions expected to continue
in the southern U.S.
Orange juice
The USDA increased its estimate of the 2008-2009 Florida orange
crop from 160 to 162 million boxes. The projected juice yield
was kept unchanged at 1.66 gallons per box at 42.0 degrees Brix.
September orange juice closed up 4.20 cents at 93.60, the highest
close in over a month.
According to Bloomberg news, private analyst Judith
Ganes-Chase predicted that Florida's 2009-2010 orange crop will
be at least 15 million boxes more than the current 2008-2009 harvest.
Metals
October gold was down $3.70 at $914.00 against today's higher dollar.
The General Administration of Customs said that China
imported a record high 475,999 tons of copper products in June.
September copper closed down 2.60 cents at $2.2115.
Currencies
Statistics Canada said that the unemployment rate increased from
8.4% to 8.6% in June with a net loss of 7,400 jobs, not as bad
as expected.
Statistics Canada also said that exports were down 6.9%
to C$28.4 billion in May while imports were down 3.5% to C$29.8
billion. The result was net imports of C$1.4 billion. The September
Canadian dollar was down .13 at 86.02.
The U.K.'s Office for National Statistics said that
producer prices were down 1.2% in June from a year ago, the biggest
annual decline since 2001. The September British pound fell 1.68
cents to $1.6189.
Industrial production in France was up 2.6% in May,
better than expected.
Industrial production in India was up 2.7% in May from
a year ago, more than expected.
David Zwebner, CEO
CommStock Trading Ltd.
Tel: +972-(0)2 624-4963
Fax: +972-(0)2 624-4876
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