Just noticing the futures market has common stocks down about a percent. The day will come, soon, when this market is going to ‘break’ and we are going to see a ‘real’ tumble—not these little 1% moves. There simply are too many items weighing on this economy–in particular energy prices as they feed into the cost of pretty much everything.
The price of natural gas and liquified natural gas are simply going to crush consumers this winter–in particular in Europe. It has been a long time since the energy producers have gotten control of their production such that it is short supply. I believe I just heard that the shale producers have spent 50% less on new production this year compared to last year–finally a wise business move (although as a consumer we all want more supply).
Interest rates this morning are in the 1.54% area. With the ADP employment report due out in an hour and then Friday the ‘official’ jobs report released Friday we could see interest rates move a little in reaction to the reports–but it is likely to be small moves – a couple basis points one way or the other. The real potential fireworks are saved for next week when we will see the Consumer Price Index and Producer Prices released–these are what will matter as we move toward a Fed tapering.
Buckle your seat belts and hold on for the next couple weeks–rough road ahead.