The Almighty Dollar Dictates Day for All Assets

The almighty dollar is dictating the day for all assets, from U.S. equities to the prices of commodities. Given the Bank of Japan and the European Central Bank needs to stimulate struggling economies, the dollar should continue to display near-term strength. In a global economy, the impact is mixed for U.S. corporate entities which engage in both importing and exporting, and so the SPDR S&P 500 (NYSE: SPY), SPDR Dow Jones Industrial Average (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ) are mixed and relatively unchanged. However, commodity prices are being forced down, and international markets are rallying, especially Japan.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Almighty Dollar

Economic Events

Federal Reserve Chairman Ben Bernanke addressed the Chicago Federal Reserve Bank’s Banking Conference. Bernanke’s speech was titled Monitoring the Financial System. At 2:00 PM ET, Kansas City Fed Bank President Esther George addresses the economy in an appearance in Jackson, Wyoming.

The Monthly Treasury Budget will be reported for the month of April at 2:00 PM ET. Economists expect the tax receipt heavy period to produce a budget surplus of $107.5 billion, versus the deficit of $106.5 billion reported in March. Over the past 10 years, the average surplus for April has been $49.7 billion.

Commodity Markets (9:45 AM ET)

WTI Crude	-2.1%
Brent Crude	-1.9%
RBOB Gasoline	-1.5%
NYMEX Natural Gas	+0.25%
Gold Spot	-2.1%
Silver Spot	-1.9%
COMEX Copper	-0.1%
CBOT Corn	-0.6%
CBOT Wheat	-0.8%
CBOT Soybeans	0.0%
ICE Sugar	+0.3%
ICE Cocoa	-0.8%
ICE Orange Juice Conc.	-0.6%
CME Live Cattle	-0.1%

Dollar strength is forcing down commodity costs across the board on a dollar price basis. That one sentence is all you need to know, along with a quick reference of the commodity price action above. Can this trend continue? As long as the ECB and the BOJ need to stimulate their domestic economies it can, but it will not last forever, and when the house of cards falls, it will fall hard and fast. Real estate remains my answer to this issue for now, including residential rental property. Later I’ll return to gold and silver.

Overseas Markets

EUROPE	9:57 AM	ASIA/PACIFIC	CLOSE
EURO STOXX 50	+0.2%	NIKKEI 225	+2.9%
German DAX	+0.1%	Hang Seng	+0.5%
CAC 40	+0.3%	S&P/ASX 200	+0.15%
FTSE 100	+0.2%	Korean KOSPI	-1.75%
Greek ASE	-3.35%	BSE India SENSEX	+0.7%

We are seeing very interesting action overseas today. Greece is giving back some of its significant gains booked earlier in the week, I suppose on Greek traders realizing that IMF lip service is matched against burning tongues on Greece’s streets. The Japanese market rallied today as the yen continued to weaken against the US dollar. The yen is down 15% against the dollar so far this year on the Bank of Japan efforts to give life to the Japanese economy.

Corporate Events

Exxon Mobil (NYSE: XOM) is having an audio webcast on its executive compensation scheme. Weyerhaeuser (NYSE: WY) is holding a meeting for analysts. W.W. Grainger (NYSE: GWW) is releasing its April sales data and holding a podcast to discuss the results.

The EPS schedule highlights presentations by Allied Motion Technologies (Nasdaq: AMOT), American States Water (NYSE: AWR), AutoNavi Holdings (Nasdaq: AMAP), Chaparral Energy (NYSE: CPR), Hecla Mining (NYSE: HL) and Sirona Dental Systems (Nasdaq: SIRO). We will also receive earnings news from Abraxas Petroleum (Nasdaq: AXAS), Adept Technology (Nasdaq: ADEP), Apricus Biosciences (Nasdaq: APRI), Astea Int’l (Nasdaq: ATEA), Ballantyne Strong (NYSE: BTN), Beacon Roofing Supply (Nasdaq: BCON), Biospecifics Technologies (Nasdaq: BSTC), Biota Pharmaceuticals (Nasdaq: BOTA), Clean Diesel Technologies (Nasdaq: CDTI), Echo Therapeutics (Nasdaq: ECTE), Entertainment Gaming Asia (NYSE: EGT), EV Energy Partners (Nasdaq: EVEP), Institutional Financial Markets (Nasdaq: IFMI), Lexicon Pharmaceuticals (Nasdaq: LXRX), LMI Aerospace (Nasdaq: LMIA), Pernix Therapeutics (NYSE: PTX), Progenics Pharmaceuticals (Nasdaq: PGNX), RadNet (Nasdaq: RDNT), RCM Technologies (Nasdaq: RCMT), Sandridge Mississippian Trust II (NYSE: SDR), Sterling Construction (Nasdaq: STRL), United Community Financial (Nasdaq: UCFC), Universal Power (NYSE: UPG), Uranium Resources (Nasdaq: URRE), Warner Chilcott (Nasdaq: WCRX), Yongye International (Nasdaq: YONG) and Zhongpin (Nasdaq: HOGS).

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