Monday, November 9, 2009 12:41 PM
At noon: Hats off to the weak greenback
Allan Robinson
A weak U.S. dollar rally. That about sums up Monday's's trading action.
A plunging greenback helps commodities. It also helps the U.S. multinational exporters. That means higher earnings ahead.
In the U.S., third-quarter earnings reports are basically in, and the fourth-quarter 2009 earnings and first-quarter 2010 reporting season should look very good compared with their comparative quarters a year ago.
There are no major economic reports due out this week with enough weight to knock the U.S. stock market off its pedestal. The Dow Jones industrial index is trading at a new high 52-week high at noon.
The major indexes in both the U.S. and Canada rallied early and gained strength in late morning trading. The Dow is up 1.6 per cent, the S&P 500 1.6 per cent, the Nasdaq 1.5 per cent and the S&P/TSX 1.9 per cent.
The S&P 500, the Nasdaq and the S&P/TSX are not far off their 52-week highs after rallying strongly on Monday.
Gold reached a record high today of $1,111.20 (U.S.) an ounce, according to Bloomberg. It is currently trading at $1,109 up almost $12.
“The G20 group indicated it was not concerned about the weak U.S. dollar and advocated keeping the stimulus measures in place for some time yet, and the Dow Jones, at least, liked that scenario and rose over the 10,000 level again today,” said Bob Tebbutt, vice-president of corporate risk management for Peregrine Financial Group Canada Inc. The index recently traded at 10,176 points up 152.
“Over the next week there will be a number of very important statistics out of China and they will probably be as positive as they have been over the past months,” he said.
