Commodities are Getting Clobbered

This is an interesting day in the market. Commodities are getting absolutely clobbered. Oil is down nearly $2 a barrel, and gold is off about $20 an ounce. I can’t remember a drop that big. According to Reuters, it’s the biggest fall since 1993. Given today’s action, I would think that bonds would be higher, but they’re not. Yields all across the curve are higher today.
There’s also an unusually wide spread today between cyclical stocks and consumer stocks. The Cyclical Index (^CYC) is down 0.89%, while the Consumer Index (^CMR) is up 0.20%. It’s rare to see such a wide gap between those indexes. This signals that the market thinks the economy is softer than expected.
Some of our defensive stocks are doing well like Sysco (SYY) and Biomet (BMET). But that’s being offset by weakness is economically sensitive stocks like Harley-Davidson (HDI) and Home Depot (HD). The Buy List is down about 0.35% today, which is better than the S&P 500 which is off 0.62%.

Posted by on February 7th, 2006 at 2:39 pm


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