On Friday, the better than expected U.S. jobs number sent the dollar upwards and gold down nearly 5%. But after Ben Bernanke’s speech at yesterday’s Economic Club of Washington he scuppered the suggestion that U.S. interest rates were heading up any time soon. He said, “The improvement in financial conditions this year and the resumption of growth over the summer offer the hope and expectation of continued recover in the new year. However, significant headwinds remain, including tight credit conditions and a weak job market.” This sent the dollar down and reversed the decline in the price of gold.
Today as McDonald’s and 3M earnings disappointed in the U.S. and Tesco failed to hit revenue expectations in the U.K., the Dow was off more than 100 pts and the U.K. Ftse 90 pts. Further debt worries from Dubai also pressurized banks today.
The high volatility of the market underscores that the market is struggling for direction. After seemingly shrugging off Dubai’s worries last week, sentiment seems to be generally weak. However, it is unlikely the market’s will come off too significantly given trading pressure to finish December in strong positive territory.
