Tuesday Outlook: Commodities, Emerging Markets

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Obama and the Democrat leadership want to start releasing oil from the Strategic Reserve as if that’s a policy. Over the weekend I thought maybe oil would rally given both a storm and hostile Iran yet the opposite happened. That’s why they play the game, right?







































Last week was pretty crazy. I stood back from the two-way action and watched the spectacle like many of you. I was also annoyed at developments and sometimes that’s not the best time to be writing commentaries here as opposed to writing your congressman. The government and politicians of both parties are on a spending and giveaway binge such as we’ve never before experienced. Economic troubles combined with an election year spells trouble for those footing the bill.

Today is Fed day. My prediction is they’ll meet, issue strong words about inflation, say it’s both contained and moderating, but as for interest rates, they’ll probably do nothing. There, I’m on the record. This is brave stuff for someone not in the prediction business.

The week is young and we should have more fireworks and special effects from Wall Street, D.C., China and Iran.

Have a pleasant day.

Disclaimer: Among other issues the ETF Digest maintains long or short positions in MZZ, QQQQ, QID, SMN, IEF, PST, TLT, TBT, DBC, DEE, USO, EWZ, and RSX.

Comments

[fatcat:]

I'm too smart to be playing in this market sand box now...but what can I say,I'm addicted!

2008 Aug 05 07:33 AM

[Seeking Advice:]

David, you disappoint me. I normally enjoy reading your charts and commentary and then I read the line, "Obama and the 'Democrat' leadership". The only people who refer to the 'Democratic' leadership as 'Democrat' leadership are the Right Wing talking heads and some 'fine' members of the Republic (or wait... is it Republican?) leadership when they're trying to be 'cute'. You spoil an otherwise nice review with seemingly unnecessary and unprovoked political commentary. I really prefer that my financial analysis reading be as free from bias as possible so that I feel that I can accept it at face value. I read political blogs for political opinions. I read financial/economic blogs for financial/economic enlightenment. Disappointing to see this crop up on your article.

2008 Aug 05 08:10 AM

[naturalsol:]

what do you think about the intentional devaluing of the dollar? could explain some of the ridiculous cash giveaways that have haunted this system for almost 100 years. make way for unified N. American currency, kinda like the Eurozone... ?

2008 Aug 05 08:16 AM

[BigWally:]

Ref: "We have some folks still trying to straighten Yahoo Finance out. They’ve acknowledged their math problem and have been given the remedy. When they incorporate it is another matter."

Please describe Yahoo's math problem or provide URL to it.............

2008 Aug 05 08:44 AM

[gabe borens...:]

At this stage of the market "consolidation",the FED should refrain from implying higher rates in the period ahead.The FED should recognize that the radical spike in the commodity prices ,as the global economies are decelerating,are signs of a massive leveraged speculation. In fact the FED should be easing in order to assist in the market consolidation process and to minimize any unpredictable shocks that could derail the rebound in the period ahead.
By now all of the investors realize ,that financial. sector will not be allowed to fail.The recent losses by the hedge funds do reflect a mega short positions in the financial sector.Based on the fundamentals(there are still outstanding issues),I would expect that sector to outperform the market based on the the shortcovering alone.
Emerging markets economies?-will implode as their economies(mostly) are dependant on high commodity prices.
I would not worry about today's FED's meeting as the recent actions reflect that the FED,Congress and the Administration comprehend the risks.
Record stock market rally is in the making.

2008 Aug 05 09:03 AM

[pchris:]

Why are "democratics" so sensitive?

2008 Aug 05 10:07 AM

[poet1:]

I want an article that has 2 colums, 1 side finance, teh other side political antics. The two are intertwined like snakes.

2008 Aug 05 11:56 AM

[OldLimey:]

Great article, as always. Don't see how political comment can be avoided. This market is pretty much all about politics.

2008 Aug 05 02:20 PM