The rally began in early September, even after more than nine weeks may remain intact. The embarked pace can continue without brief respite, however, since the market is overbought technically considered. This applies not only to the stock market but also for precious metals.
The price of gold rose to a new record high, closing just below the $ 1,400 mark. Even the silver continued its flight and has since the beginning an increase of almost 60% (green arrow). The technical hurdle of $ 24 was easily taken a few days ago. Even if it is up to the record high of $ 50 before 30 years (see blog of 18 September 2010) is no more technical resistance level, this level earlier than in the second half of this decade will be tested.
The oil price is testing again this year its upper range. A sustained outbreak is fundamentally unjustified, but would primarily be based on emotion. Even the OPEC considers an oil price of about $ 85 per barrel to be unrealistic.
tried since the beginning of October the euro, the $ 1.40 mark to overcome. From $ 1.45 € are to exchange positions again in $, since then the distance to the purchasing power parity, with 15% is too high.
The midterm elections brought few surprises but confirmed the fear that President Obama needs to reign in the second half of his first term as majority Democrats in the House of Representatives. The loss of 64 seats was higher than expected, while the worst performance in midterm elections in 62 years. In the Senate, the clear majority of Democrats fell from 59 seats together to 53. President Obama must now find a political path from the left wing to center, similar to Clinton in 1994 made after the Republican victory in the midterm elections added. This requires pragmatism rather than ideology. Obama is the only way his chances for re-election in two years true.
The labor market data was in October with 151,000 new jobs (green arrow) is better than generally expected, while the two previous months were increased by 110,000 jobs. This underlines once again how unreliable statistics are sometimes initially. If the adjusted figures released one month later, react to market participants barely, even if the original picture changed completely.
the start of the recession in late 2008 led to losses of jobs. As the pink shading indicates the layoffs lasted a full two years and escalated to the first quarter of 2009 to about 750,000 jobs per month. Even after the worst recession since World War II (black arrow) the number of layoffs increased since mid-2009 only gradually from. The state population survey conducted in early 2010 to a sharp increase in the labor market (blue arrow). The demand of jobs increased only temporarily and led very quickly to layoffs (yellow arrow). The annual trend is however seen a gradual improvement in the labor market. Shortly after the end of the recession, the number of jobs fallen over the previous year by 5% (red arrow); now the balance is slightly positive (green arrow). This encouraging development was for Obama but in the midterm elections of late.
Unemployment was just before the recession in late 2007 only slightly over 4.5%, and escalated within almost two years to 10% (red arrow) without demonstrate a clear improvement trend so far. Patience is required here. It requires only 150,000 new jobs each month to the current unemployment rate of 9.6% not to have to rise.
The productivity of American industry has improved in this decade, almost all the time. Only once did in the fourth quarter of 2008, the start of the worst recession since World War II, in a slight decrease over the previous year (red arrow) . Unit labor costs have moderated significantly since two years and the end of 2009 were 3% lower than last year (right green arrow). Similarly, it was the beginning of 2002 (left green arrow). Even today, the unit labor costs are still below their year-earlier level. Increasing productivity and moderate labor costs explain the significant profit improvements of U.S. companies and the low inflation .
silver is hard to stop. gave a new 30-year high it beginning of the week. Since late August, the price of silver has risen by 50%. In the past 10 years, followed by an above-average growth has always a significant decline of 30% to 50% within a relatively short time (blue markers). I advise caution as driving emotions and fundamental facts that recent price trends. Existing positions are to be secured.
My interview with Andreas Scholz of DAF can on the blog of 4 November saw be. Further assessments and specific recommendations on the hotline. The next blog will appear in a week on Monday, 15 November.
Heiko Thieme
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