The Journal of Commerce Industrial Commodity Price Index (JOC), which tracks the prices of 18 industrial materials including cotton, burlap, steel, copper, plywood, ethylene and crude oil, posted its biggest weekly advance ever (dating back to 1985) last week, increasing 6.9% to 77.49. The gain extends the advance the index began in early April when it was just above the five-and-a-half-year low it set in December. The JOC is now up 21.6% (to 77.49) from its Dec. 18 low of 63.70.
The JOC tends to correlate well with data such as the Fed's industrial production statistics and the Institute for Supply Management's monthly purchasing managers index, and the latter saw a big increase in April, to 40.1 from 36.3 in March. The JOC is also correlated with the U.S. producer price index, indicating a bottoming in the PPI, which in March was down 3.5% on a year-over-year basis. The JOC also correlates well with basic materials stocks.
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Tony Crescenzi Blog Libor Falls to New Record Low 5/11/2009 9:55 AM EDT A decline in worry about counter-party risk is putting further downward pressure on Libor.
Tony Crescenzi Blog Fed Rate Expectations Rise Slightly 5/8/2009 3:27 PM EDT The market sees a bit more chance that the Fed will raise rates by the first quarter of 2010.
Tony Crescenzi Blog Inventories Fall but Remain at a High Level 5/8/2009 1:09 PM EDT While we're seeing 'green shoots,' we still have a way to go before a virtuous cycle begins.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic, The Money Market,
first published in 1978 by Marcia Stigum, and The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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