Bullish outlook for precious and base metals and bulk mined commodities Macquarie Capital Securities said their short-term outlook is bullish for bulks, minor and precious metals with base metals providing to be tighter than expected due to further supply disruption. Analysts Jim Lennon, Adam Rowley and Max Layton said their favored commodities during the short term are thermal and coking coal, iron ore, platinum, gold, cobalt, manganese, chrome and aluminum. Physical tightness of supply for many commodities is expected to persist into the next decade, keeping prices well above normal for the long term, according to Macquarie's analysis. Meanwhile, rising cash and capex costs are driving high long term expectations.
Home sales dip in March Sales of existing homes fell in March, after registering a modest increase the month before, according to a report by an industry group released Tuesday. The National Association of Realtors (NAR) reported that sales by homeowners fell 2% in March to an annual pace of 4.93 million, down from the February reading of 5.03 million. The number was down 19.3% from 6.11 million a year earlier. "Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets," said Lawrence Yun, NAR chief economist. With a large number of homes to choose from, many buyers are biding their time, he added. The median price of a home sold during the month fell 7.7% to $200,700 from $217,400 a year earlier. In February, the median home price fell 8.2%, which was the largest year-over-year price drop on record.
Fed auctions another $50 billion to banks Battling to relieve stressed credit markets, the Federal Reserve has provided a total of $360 billion in short-term loans to squeezed banks since December to help them overcome credit problems. The central bank on Tuesday announced the results of its most recent auction — the 10th since the program started in December, where commercial banks bid to get a slice of another $50 billion in the short-term loans. It's part of an ongoing effort by the Fed to help ease the credit crunch, which erupted last August, intensified in December and January and took another turn for the worst in March with the sudden crash of Bear Stearns, the nation's fifth-largest investment house.
Crude touches record atop $118 on supply concerns Crude-oil futures rose Tuesday to a new high of $118.47 a barrel as lingering worries over oil-supply disruptions provided support for prices. Crude for May delivery gained nearly $1 to touch the new high in early morning trading on the New York Mercantile Exchange, surpassing the previous record of $118.05 recorded in overnight electronic trading. It was last up 92 cents, or 0.8%, to $118.40 a barrel. Meanwhile, May reformulated gasoline rose slightly to $2.988 a gallon and May heating oil gained 1 cent to $3.3214 a gallon. May natural gas futures fell 5 cents to $10.68 per million British thermal units. At the pump, regular gasoline averaged $3.511 a gallon, a new record high, according to the Automobile Association of America. Regular gas passed $4 a gallon in some gas stations in downtown San Francisco Monday.
Refiners slow fuel production as profits drop A production slowdown at the nation's refineries, now operating at levels last seen in the aftermath of Hurricane Katrina in 2005, couldn't come at a more troublesome time for consumers watching pump prices flirt with $4 a gallon. Such low production rates could create a new set of problems for refiners, already operating at the brink of loss. Utilization rates at 30-month lows threaten to spark probes by lawmakers, who have been holding a series of hearings on the rampant rise in gasoline and diesel prices. "If this operating level persists, the industry will likely see another round of intense legislative scrutiny," said John Kilduff, an analyst at futures brokerage MF Global. U.S. refineries operated at 81.4% of their operable capacity in the week ending April 11, the Energy Department's statistical arm said last week.
Japan's hunger becomes a dire warning for other nations MARIKO Watanabe admits she could have chosen a better time to take up baking. This week, when the Tokyo housewife visited her local Ito-Yokado supermarket to buy butter to make a cake, she found the shelves bare."I went to another supermarket, and then another, and there was no butter at those either. Everywhere I went there were notices saying Japan has run out of butter. I couldn't believe it — this is the first time in my life I've wanted to try baking cakes and I can't get any butter," said the frustrated cook. Japan's acute butter shortage, which has confounded bakeries, restaurants and now families across the country, is the latest unforeseen result of the global agricultural commodities crisis.
Russia looks at all options to invest its oil billions abroad Russia could soon follow the Middle Eastern sovereign wealth funds and invest billions of dollars in direct overseas investments if, as expected, its national welfare fund is given more freedom to invest. Dmitry Pankin, Deputy Finance Minister, said that there was hot political debate about how the fund should be invested. He told The Times: "It is possible to invest ... abroad . ..to buy corporate bonds ... to buy shares. It is less risky to buy government bonds than to buy corporate shares. But we are analysing all proposals." Russia is awash with cash largely because of soaring revenues from its oil and gas. But the country is also struggling with inflation as the economy grows rapidly. For that reason, it is now having to limit government spending on infrastructure even though much of its transport network and other parts of its national framework badly needs to be upgraded.
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