Wall street dips

Wall street dipped in trading yesterday evening after consecutive record highs by Dow Jones and S&P over the last seven weeks.  IBM fell on bearish analyst commentary. Trading was muted with investors holding pat to stocks close to historic levels.  The fading down of  the earnings season weighed in on trading volumes.  Continuous speculation on when US Federal Reserve (FED) would start tapering its bond buying program of monthly USD 85 Billion kept as well investors on the side line.

The US Commerce Department announced yesterday that the trading gap between export and imports in June fell 22,4 %% to USD 34 Billion. This is the lowest level in 3-1/2 years.  Exports touched a record high  suggesting an upward revision to second-quarter growth.  Adjusted for inflation the gap narrowed 17 %% to USD 43,2 Billion. The June deficit is far smaller than the government had estimated. These are arguments for starting to taper in September.

Export numbers showed a steep increase in trade with the Euro zone countries which rose 1,5 %% in June.  Export to the Euro area fell by 5 %% in the first half of 2013. Export to China which has stagnating for some time, saw an increase of 4,5 %% in June and is up 4,5 %% since January 2013.  The better trading balance reflected hefty declines in import of petroleum, industrial supplies and materials.  The drop in the petroleum  imports show that  US is sharply reducing its dependence on foreign oil.

In spite of the better balance of trade figures the dollar dropped against the Euro trading at 1.3309.  The Japanese yen continues to gain ground.  USD/JPY trades at 77,723.  British pound is stronger. USD/GBP stands at 1.5371.  Oil prices have climbed and Brent crude trades above USD 109 a barrel. Precious metals started the week in negative territory. Gold has dipped substantially below the USD 1300 level at 1287 falling as low as 1278. Silver is following a similar down turn trend.

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