I get the sense from the broader futures markets that commodities are continuing to weaken because a weaker business climate is bringing a drop in demand for everything. If this is prescient, it may get even uglier! Commodity prices usually only weaken like this when poor business brings soft demand.
Tomorrow morning we will get the monthly jobs report! If it comes out worse than expected (about 75k job loss), stocks could get clobbered. There is a sense in the financial markets this week that even with lower oil prices, the economy is not going to recover. Treasuries continue to rise (interest rates lower) despite the inflation risk because treasuries are seen as the only place for money to be safe.When interest rates drop lower than inflation, people must be really scared! There is a feeling that we may be on the precipice of a new move down if we get some bad news in the next few days.
It looks like Boeing's union is going on strike this weekend. Very bad news! That will probably clobber stocks on Monday if it happens. What stupid union leaders! The unions turned down an 11% pay increase by a vote of 87% against! When I was a union employee, we would have been grateful for such a pay increase! And the timing couldn't be worse for the economy! It will drive down the Dow (Boeing is a big component), hit durable goods orders nationally, and hurt one of America's few thriving businesses at a terrible time for the economy. How many other American jobs depend on strong orders from Boeing that will be hit by this impending strike! This has the potential to plunge the American economy into a spiral of deepening unemployment at a time when the economy can scarcely afford it!
I thought this was interesting: On CNBC this morning, Art Cashin mentioned a statistic that following the two party conventions, whoever is ahead in the polls at that point wins 90% of the time!
