By Greg Peel<\/p>\n
Economists were expecting something in the order of a 0.1% increase in US retail sales last night so when a 1% figure was announced a trigger-happy Wall Street decided all talk of an economic slump was gradually moderating enough to send the Dow to a new record high.<\/p>\n
It didn’t last long however, as the US Energy Department countered with news that oil inventories fell for a third straight week, and fears of a return to higher oil prices, driven equally by OPEC production cuts, nipped the rally in the bud quick smart. <\/p>\n
The excitement was further tempered by the realisation that strong retail sales are a sign of inflation, and that the expected-by-many 2007 rate cut series may not be quite so certain after all. The bond market was certainly of this view.<\/p>\n
Having hit 12,368 the Dow retreated to close at 12,317 \u2013 up less than 2 points on the night. There’s no doubting traders on the Street are a confused bunch at the moment.<\/p>\n
Gold followed a predictable pattern as well, initially dipping into the low 620s before settling in New York at US$628.10\/oz. Gold is treading water at present aside uncertain moves in the US dollar. Once again the signals are difficult to correlate, as high inflation is good for gold until a rate rise increases the US dollar which thus is bad. In the meantime, the oil price has jumped a bit again which is good.<\/p>\n
Gold bulls are heartened, however, by a report overnight that the traditional measure of inflation \u2013 the CPI \u2013 is a flawed process and the real measure of inflation should be indexed to the gold price. This suggests 8% inflation in the US, instead of 3%.<\/p>\n","protected":false},"excerpt":{"rendered":"
Surging retail sales drove the Dow to a new high overnight \u2013 briefly.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/52561"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=52561"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/52561\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=52561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=52561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=52561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}