The market is pushing back to highs Thursday, rebounding from a slight pre-market drop. Economic data this morning was mixed, with jobless claims slightly higher than expected, leading indicators slightly weaker than expected, but an outstanding Philadephia Fed survey. The index read 35.9 vs. 21.0 expected, and was the highest reading since January 2004. The employment component saw its highest reading since April 1972!
Precious Metals
Precious metals gold and silver have been strong in today’s session as inflation pressures are starting to become more visible. Earlier this week, UK and China officials reported higher than expected inflation, and this morning CPI data showed slightly higher than expected inflation.
The results are not unexpected, as the Fed has stated its desire to chase inflation rather than curtail it, but the question becomes: if inflation starts to accelerate but employment remains a concern, will the Fed raise rates? At this point, based on their previous actions, I think it would take an extremely high level of inflation for them to consider that path.
iShares Silver Trust ETF (SLV) is up 2.5% on the day, busting out to new highs above $30.50. Gold continues to, ironically, play second fiddle to silver, as the yellow metal still trades some ways off its highs. The SPDR Gold Trust ETF (GLD) is up 0.6% today. We like both metals for higher prices in the near future. If this keeps up, they are going to have to start giving silver medals to the winners of the Olympic events.
Intel Surging
From the Morning Call this morning, Intel Corporation (INTC) pushed higher early, knocking on the door of the neckline of the head and shoulders pattern before being turned away. The chip maker has become a sort of value tech dinosaur, but price action is price action and the momentum pick up through the $22-22.10 level.
Also from the Morning Call, Walter Energy, Inc. (WLT) is bouncing back from some early weakness. The stock trades very erratically, but still feels like it will break its mini-downtrend in the near future. Wynn Resorts, Limited (WYNN) is still hanging up in a tight bull flag near the highs. We will believe there will be another great breakout trade in WYNN after a stellar earnings quarter. First Solar, Inc. (FSLR) is acting well, breaking out from the upper level triangle pattern in the morning and holding higher.
Apple Holding Lower Amid Jobs Health Worries
Apple Inc. (AAPL) continues to hold lower after gapping down this morning on renewed fears about Steve Jobs’ health. Jobs reportedly has been seen several times entering a California cancer center, leading to speculation that his health situation could be more grave than previously thought. In the short-term it is hard to say how the stock will trade with this dark cloud hanging over it, but long-term we continue to be Apple bulls, with or without its visionary leader. Jobs has built enough brand equity and created such a culture of innovation that is hard to see everything come crashing down if he passes. One man does not make a company, especially one with he size and scope of Apple. Besides, you should not be investing in AAPL under the assumption that he will live forever.
*DISCLOSURE: Scott Redler is long INTC, AAPL, LVS; Short SPY. John Darsie is long WYNN, AAPL, GLD, SLV, WLT.
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