It is good to be back! I took a some time off from writing in preparation of the birth our son. My wife and I very happy that our son and first child was born Sunday August 5th. It has been a very happy and wonderful experience. However, now it is time to start writing again; so I am back at my desk and looking forward to resuming my publishing duties.
A Look at Friday’s Market: The Dow Jones Industrial Average closed Friday August 10th at 13,207.95 When I last published on April 13th the Dow Jones Industrial Average had closed the prior day at 12,986.58 This is a gain of approximately 221 points or approximately 1.7% With respects to the other items we follow on a daily basis; Oil closed $92.87 per barrel, down from $103.64 on April 12th. Gold closed $1,620.70 per ounce, down from $1,680.60 per ounce on April 12th. Wheat closed at $8.852 per bushel, up from $6.392 per bushel on April 12th. Corn closed at $8.00 per bushel, up from $6.374 per bushel on April 12th; and finally Soybeans closed at $16.732 per bushel, up from $14.410 per bushel on April 12th.
The grain markets are obviously showing the effects the drought gripping the country. This drought will ultimately end up hitting consumers in the pocket book. While a lot goes into food processing beside the cost of the raw food, we are undeniably seeing significant raw food increases. Over the period of time since I last published, Corn is higher by $1.626 or approximately 25.5%. Wheat is higher by$2.46 or approximately 38.5%; and Soybeans are up by $2.322 or approximately 16.1%. Regardless of how you want to frame it, I see these price increases putting a serious dent in the wallets of most Americans when they go to the grocery store. This will have a negative impact on the U.S. economy.
A Few Thoughts on Monday’s Market: I would not get too excited about the Dow Jones Industrial Average’s recent move above 13,000. On March 15th of this year the Dow Jones Industrial Average closed at 13,252.76 only to move back lower. On April 2nd of this year the Dow Jones Industrial Average closed at 13,264.49 only to move back lower. On May 1st of this year, the Dow Jones Industrial closed at 13,279.32 I think this forms an upward sloping trendline that is upside resistance. At the current levels, I see this resistance coming into play at approximately 13,330 on the Dow Jones Industrial Average. Until the Dow Jones Industrial Average closes above this level, I would not get too excited about the current move higher.
The Bottom Line: I think that once the conventions are over and the race for the White House heats up we are going to be in for a bumpy ride.