Trading Now

Trading Now

Sunday, February 22, 2009

OIL COMMODITIES are the buy of the week

These numbers helped oil commodity prices to drop this past week. That means it is a good time to buy oil stocks such as SLB, NBR and ETF's OIH and DIG. Gold however is not a good buy. Gold has been overbought for sometime now and soon will become a good short. So keep an eye on stocks like AUY, NEM, ETF's GLD and GDX.


U.S. CPI Ticked Up

· During February the consumer price index (CPI-U) rose for the first month since July, according to the U.S. Bureau of Labor Statistics. The 0.3% gain followed drops of 0.8% and 1.7% during December and November. Due to those earlier sharp declines the three-month rate of change remained quite weak at -8.4% (AR). The latest increase matched Consensus expectations.

· A 1.7% rise in energy prices led last month's increase in the CPI after having been down during the previous five months. Gasoline prices reversed earlier declines with a 6.0% (-40.4% y/y) increase to an average of $1.79 per gallon of regular. Still moving lower last month, however, were fuel oil prices which fell 2.7% (-19.5% y/y). It was their sixth consecutive monthly drop while prices for natural gas & electricity fell 0.8% m/m (+7.2% y/y).

· Increases in food & beverage prices have very much tapered off from their strong gains earlier this year. A 0.1% uptick followed a like gain during December. That pulled the three month annual rate of increase down to 1.4% after growth as high as 8.7% this summer. Outright declines in meat and dairy product prices as well as much easier growth in cereal & bakery product costs account for the moderation.

· Core prices (CPI less food and energy) showed their strongest increase since August with a 0.2% rise. However, despite the increase the year-to-year gain of 1.7% remained its weakest since mid-2004. Little or no growth in core prices during the prior four months accounts for the moderation.

· Core goods prices rose for the first time since July. The 0.3% increase reversed the prior month's decline but nevertheless left the three-month rate of change at a negative 0.9%. Prices of new & used motor vehicles increased for the first time in a year, but the 0.2% rise left them down 3.2% during that period. Lower prices of used cars paced the decline with a 9.2% twelve month decrease. Apparel prices ticked up 0.3% (-0.9% y/y) while prices for household furnishings & operations ticked lower by 0.1% (+1.8% y/y). Appliance prices were up 2.0% y/y while furniture prices were unchanged y/y. Tobacco prices again were strong during January and they posted a 0.8% increase (+6.1% y/y).

No comments:

Post a Comment


Wikinvest Wire