Financial Markets Summary
Tuesday, January 13, 2015
- Oil prices dropped during the past week breaking through another level of support at $49 - $47.50 a barrel. Yesterday, the price of oil fell below $46 a barrel. The next area of support is around $42 a barrel, which represents the January 2009 low. Further support is at the 2004 breakout level in the $40 - $37 a barrel area, when the 20 year trading range was broken. The price of oil has not returned to that level in the ten years since the breakout occurred.
- Gold prices have continued the trend of the past couple of months bouncing above and below $1200 an ounce. The trend remains lower.
- The U.S. dollar is at its highest level relative to other currencies since late 2005. Weakness especially in the Euro and Japanese Yen are fueling the dollar strength.
- The ten year U.S. Treasury note yield dropped sharply during the past week. The yield fell below 2% closing yesterday near 1.91%. Support is near 1.86% with further support at 1.61%. The strengthening dollar and the low interest rate environment in Europe and Japan is making U.S. interest rates very attractive to foreign investors and institutions.
- Corn, wheat and soybeans have rallied off their October lows, but are now at significant levels of resistance. A break above resistance could be the beginnings of a longer term rally, while a failure might mean new lows could occur in the months ahead as the downtrend re-establishes itself.
- Real estate remains attractive. The rally from the 2009-2011 lows might have been just the first phase in a multi-year upwards cycle.
Sources: bankrate.com, bloomberg.com, briefing.com, Dow Jones News, Financial Times, finviz.com, Investor's Business Daily, marketwatch.com, seekingalpha.com, Thomson Reuters/First Call, U.S. Dept of Treasury, yahoo.com and individual company web sites and press releases. Leonetti &
Associates, LLC views or opinions are as of a certain date and subject to change without notice. The material contained herein is for informational purposes only and obtained from sources we consider reliable. We make no guarantee as to its accuracy or completeness. References to specific securities and industries/sectors should not be considered recommendations to buy or sell any security or advisory service. Past performance is not a guarantee of future results.