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warrior bodhisattva
Super Moderator
Location: East-central Canada
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Two years later: Dow up 37%, S&P up 46%
Although you might not see it on the street or hear about it from your neighbour or your friends and family, but there are strong signs that the American economy is entering a recovery cycle.
The Dow is up 37% and the S&P is up 46% since the end of 2008. This is after the worst of the recession. They still haven't hit their previous highs, but they're inching closer. Based on current trends, it could happen within a matter of months, and most likely before the end of 2011.
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Oil Rises for a Fourth Day as U.S. Economic Recovery May Spur Fuel Demand
Crude traded within 1 percent of a two-year high above $90 a barrel on signs that economic recovery in the U.S. is eroding excess inventories.
Futures climbed as much as 0.5 percent before a government report forecast to show U.S. crude stockpiles declined for a third week. Yesterday, industry data showed a reduction in supplies. The world’s largest economy grew faster than previously estimated in the third quarter, data from the Commerce Department showed today.
Crude for February delivery rose as much as 55 cents to $90.37 a barrel in electronic trading on the New York Mercantile Exchange, the strongest since the two-year peak of $90.76 reached on Dec. 7. It was at $90.05 at 1:39 p.m. London time. Prices have climbed 13 percent this year. Brent crude for February settlement gained as much as 59 cents, or 0.6 percent, to $93.79 a barrel on the London-based ICE Futures Europe exchange.
“Heating demand is high,” said Thorbjoern Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark. “U.S. heating-oil demand was reported 16 percent above normal last week. Economic growth in the U.S. is slow and steady, but there is growth ahead.”
Yesterday, futures gained 1.1 percent to $89.82 a barrel, the highest settlement since Oct. 7, 2008. That was 2 cents below a long-term resistance level on technical charts, the 50 percent Fibonacci retracement of the drop to $32.40 in December 2008 from a record high of $147.27 in July that year.
The U.S. economy expanded at a 2.6 percent annual rate in the third quarter, marking a pickup in growth that may extend into 2011 as companies and consumers gain confidence to spend.
Crude Supplies
Prices gained after the industry-funded American Petroleum Institute reported yesterday that U.S. crude supplies declined 5.8 million barrels to 342 million last week. Gasoline inventories dropped 2.9 million while middle distillates increased 16,000 barrels, the API said.
“There’s no doubt that we’ve seen a tightening in the market’s balance over the last few months,” Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said in an interview with Rishaad Salamat on Bloomberg Television’s “On the Move Asia” program. “A lot of it does depend on what you see for the demand picture going forward.”
Crude also rose after U.S. holiday retail sales data, a key economic indicator, advanced. Same-store sales at a selection of U.S. retailers posted their biggest holiday jump, according to a chain-store sales index released yesterday by the New York-based International Council of Shopping Centers and Goldman Sachs Group Inc.
Heating Oil
The Department of Energy will release its oil-inventory report in Washington today. The data may show U.S. crude stockpiles fell last week as refiners on the Gulf Coast reduced their assets for tax savings at the end of the year, according to a Bloomberg survey.
Supplies dropped 3.4 million barrels in the seven days ended Dec. 17 from 346 million, based on the median estimate of 14 analysts. Stockpiles in the previous week slumped 9.85 million as imports fell.
Gasoline inventories may have increased 1.5 million barrels from 214.8 million, the survey showed. Analysts were split over whether stockpiles of distillate fuel, a category that includes heating oil and diesel, declined or gained.
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Oil Rises for a Fourth Day as U.S. Economic Recovery May Spur Fuel Demand - Bloomberg
One way of measuring an economy is by tracing the consumption of resources, and, of course, oil is no exception. The American economy is expanding modestly and it's having an effect on oil prices. This isn't necessarily good news, considering high oil prices are one of the pressures placed on economic expansion; however, increased oil demand a sign that the economy is improving.
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The U.S. economy expanded at a 2.6 percent annual rate in the third quarter, marking a pickup in growth that may extend into 2011 as companies and consumers gain confidence to spend.
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If this growth is maintained, 2011 could be viewed as a key year marking a transition from recession to recovery and to eventual expansion.
More:
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[...]
“Jobless claims continue to trickle lower, which is very important,” said Boris Schlossberg, director of research at online currency trader GFT Forex in New York. “The whole bet is that 2011 will be there year will be positive gains in economic data. That’s why you see dollar-yen coming back up.”
[...]
U.S. bookings for goods like computers and communications gear climbed 2.6 percent after a 3.6 percent decline in October that was smaller than previously estimated, figures from the Commerce Department showed today in Washington. Total orders dropped 1.3 percent, depressed by volatile demand for aircraft, and bookings excluding transportation equipment rose more than forecast.
Fewer Americans filed applications for jobless claims last week and the number of people on benefit rolls dropped to a two- year low, reinforcing evidence the labor market is improving.
Initial filings for unemployment insurance declined by 3,000 to 420,000 in the week ended Dec. 18, matching the median forecast in a Bloomberg News survey, Labor Department figures showed today in Washington. Those already collecting benefits fell in the previous week to 4.06 million.
Another Commerce Department report today showed consumer spending rose in November as incomes climbed. Household purchases advanced 0.4 percent after a 0.7 percent gain in October that was larger than previously estimated. Incomes rose 0.3 percent and the Federal Reserve’s preferred price measure showed inflation remained below policy makers’ comfort zone.
[...]
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Dollar Declines as Improving U.S. Economic Outlook Buoys Demand for Risk - Bloomberg
- Are you seeing any significant shifts in the general economic atmosphere/outlook?
- Are things more optimistic now than they were in 2008/2009?
- How was 2010 in general?
- Do you have hope for 2011?
- Do you think lessons have been learned from the experience of the past two years?
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Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön
Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot
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