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Gold Is Still on the Fritz


Today's financial recap and tomorrow's financial outlook.

Gold (NYSEARCA:GLD), the major story of the past two trading days, had a very erratic session today. The yellow metal traded in an intraday range between $1,321 and $1,402 and had multiple $30 moves in either direction. It's likely that this volatility will continue during the coming days and weeks as the market attempts to find a true value. Today's volume in gold was high, but not as high as yesterday's volume. Gold contracts traded north of 400,000 contracts, which was more than 1.5x the open interest.
The S&P recovered from yesterday's drop by retracing 61.8% of yesterday's open, a key Fibonacci level. In individual trading, the only S&P sector that was lower on the day was telecom, while the leading sector was materials, up over 1.5%.
Economic data was generally better. Housing starts rose to 1.036 million homes in March, the highest annualized level since mid-2008. The increase from the prior month's 968,000 rate was led by a surge in multi-family homes. However, building permits showed a sharp decline to an annualized rate of 902,000, down from 939,000 the month prior, which highlights the weaker NAHB housing conditions survey we received yesterday.
As for earnings, Goldman Sachs (GS) beat in the morning, but sold off heavily at the open. Tech giants Intel (NASDAQ:INTC) and Yahoo (NASDAQ:YHOO) also beat. For Intel, in the tech business, even a so-so quarter will be viewed in a more favorable light. Freight company CSX (NYSE:CSX) steadily beat EPS estimates, but more importantly, it raised its quarterly dividend to $0.15 from $0.14 and announced a 2-year $1 billion stock buyback plan.

Tomorrow's Financial Outlook

Tomorrow the economic calendar is pretty bare with only the Fed's Beige Book, a survey of economic conditions from the 12 Fed districts. Earnings releases will play a bigger role tomorrow with Abbott Labs (NYSE:ABT), Mattel (NYSE:MAT), Bank of New York Mellon (NYSE:BK), Bank of America (NYSE:BAC), St Jude Medical (NYSE:STJ), American Express (NYSE:AXP), SanDisk (NASDAQ:SNDK), Steel Dynamics (NASDAQ:STLD), eBay (NASDAQ:EBAY), and Sallie Mae (NYSE:SLM) reporting.
Globally, the UK will release employment figures, and Japan will release its trade balance data from March. Recently, Japan trade data has trended toward a sharp deficit, which has caused the yen to strengthen versus other major currencies. In the UK, the 3-month unemployment rate is expected to stay unchanged at 7.8% with no change in the jobless claims rate.

Twitter: @Minyanville

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