Major ETFs tracking U.S. markets struggled to find direction
Thursday amid news that fewer people filed for unemployment
benefits last week. That suggested that the labor market is
improving after job creations climbed in July.
Jobless claims fell from 367,000 to 361,000 below consensus of
370,000 and well below the 385,000 to 390,000 seen before the
start of annual auto shutdowns in early July.
"The clear decline since June provides some corroboration of
the better-than-expected payrolls reading last week," said Jim
O'Sullivan, chief U.S. economist at High Frequency Economics of
Valhalla, NY. "In short, it's encouraging data for the
In afternoon trade, theSPDR S&P 500 (
) lifted 0.09%.
SPDR Dow Jones Industrial Average (
) shed 0.02%.
PowerShares QQQ (
), a basket of the largest 100 nonfinancial stocks on the Nasdaq,
Guild Investment Management believes the market will continue
rising in the short term, correct in September and then rally
again between November and year's end, which is typical of
"European, Asian, and U.S. stock markets will continue to
gradually rally in price as it becomes more obvious that the U.S.
Federal Reserve, European Central Bank and other central banks
are providing liquidity to markets with the intention of seeing
asset prices rise," Guild wrote in a client note. "It is no
secret that they are trying to keep asset prices from falling
into deflation and the world economies from falling into
Last week, the Fed purchased repos for the first time since
Guild wrote: "Since the Fed cannot buy stocks, it must put
liquidity in the markets through other means, for example by
performing repos with banks. Repos are repurchase agreements
where the Fed loans money to banks and, in return, takes
collateral from the banks. This provides liquidity to the banking
"The fact that loans are being made via repos to banks
A) One or more major banks are in trouble and need liquidity
to avoid bankruptcy, or
B) The Fed is anxious to get money into banks' hands soon so
banks can buy assets (stocks and bonds) to help the fight against
those who favor deflation.
"In either case, more money is being added into the system,
and that is bullish for stocks, non-U.S. currencies, and
Natgas ETF Explosion
Among the biggest ETF gainers,United States Natural Gas (
) shot up 4.43%, rebounding from a brief pullback to its 50-day
moving average. But it still trades below its longer-term,
200-day moving average, which could present overhead price
Natural gas is setting up for another possible sell-off,
Waverly Advisors told clients in its daily note.
The increase in U.S. working natural gas inventories nearly
half way through the 2012 injection season was the smallest in 12
years, the U.S. Energy Information Administration reported
Wednesday. Natgas inventories are projected to rise by 1,477
billion cubic feet during the 2012 injection season -- the lowest
since 1991, according to EIA's August Short-Term Energy
"The slow start to the injection season reflects record-high
inventories at the end of this winter, leaving less space to be
filled, and a large increase in natural gas use by the U.S.
electric sector for power generation," the EIA report stated.
But while the increase in inventories is low, the amount of
total gas in underground storage facilities is at a record high
for this time of year. Underground storage capacity is now about
75% full, a level not usually reached until late August or early
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