Spain is kidding itself and Europe by going around and saying that they do not need a bailout. The fact of the matter is that they do, and badly. The longer it is put off, the more they will need and the worse the recession will get. That will only require the ECB to allow inflation to increase a bit more and in the long run it shall only help commodities appreciate in value.
We are also looking to the jobs numbers today for a hint on how the economy is performing. Lately the job market has been week with numbers constantly missing the consensus and by large numbers at that. It will be interesting to see exactly how the market interprets these numbers and whether good numbers are actually bad news moving forward as they could hurt Romney's (the market's pick for President) chances of winning the election.
Oil & Natural Gas
Just as we predicted yesterday, SandRidge Energy (SD) shares did make a move off of that $7/share level and moved higher by 0.38 (5.43%) to close at $7.38/share. The stock closed just off the highs for the day and traded almost 16.6 million shares, with both of those facts pointing to how strong that move was. The volume was roughly 60% higher than normal and we think even bears would be hard pressed to find something negative from yesterday. We continue to believe that this one moves higher through the end of the year based on their development plans for their large land holdings in Kansas and Oklahoma and external factors such as Chesapeake Energy's (CHK) divestiture of a stake in its landholdings in the Mississippi Lime play.
We were correct to believe that a good Romney performance would benefit the coal stocks, and Alpha Natural Resources (ANR) and Arch Coal (ACI), two of the more volatile stocks in the sector, saw shares rise smartly after Governor Romney's comments during the debate. The candidate indicated that he was a supporter of coal and that clean coal had a place at the table for energy production should he get the chance to assemble an administration. Alpha Natural saw shares rise $0.43 (6.83%) to close at $6.73/share on volume of 22.2 million shares. Arch saw shares rise $0.49 (7.90%) closing at $6.69/share and trading 20 million shares in yesterday's session. Coal is a sector which investors will effectively hitch onto the election news cycle and we shall see shares move in tandem with Romney's chances of victory. It shall be a great time for day traders to make moves here, but it shall be quite frustrating for regular investors with the volatility resulting from the election.
Kinross Gold (KGC) saw shares rise to 6 month highs after moving higher by $0.65 (6.23%) to close at $11.08/share. As does gold, shares in Kinross continue to trend higher and we would look to see if shares can break through the $11.50/share area. As long as gold can continue the winning streak, it should continue to be able to drag gold stocks higher, especially Kinross. The stock is well off of its 52-week highs which were set earlier in the 52-week cycle, but we really do like the price action here over the past quarter. There are other gold stocks out there with better momentum and fundamentals but Kinross should move higher as it attracts buyers looking for a little more bang for their buck by investing in gold players which have lagged .