Wednesday, November 03, 2004

Hey, there is still an economic world out there, and things continue to get uglier and uglier for 2005.

First off, factory orders in the US are down for the second straight month.
Factory orders fell 0.4 percent in September, the Commerce Department said Wednesday. This is the largest decline in factory orders since April.

The drop was unexpected.

Economists had been forecast factory orders to rise 0.4 percent, according to a survey conducted by CBS Marketwatch.

August orders were revised lower to a fall of 0.3 percent compared with the initial estimate of a 0.1 percent decline.

This is the first two-month decline in factory orders since Nov.-Dec. 2002.
Second, the dollar headed southwards after a few days of stability.
The dollar weakened on Wednesday as dealers shrugged off the relatively quick resolution to the U.S. presidential election and turned attention back to the currency's weak fundamentals. . . .

Analysts had expected the dollar to get a near-term bounce in the event of a swift, decisive election result, and Kerry's concession relieved some of the uncertainty hanging over the market.

But although analysts had warned that any dollar relief rally would be fleeting and probably modest, it has proved even more shallow than most had anticipated.
Third, retail gasoline prices were up again last week, now a national average of $2.034/gal. Prices are now in their third week over $2/gal. Over the last four weeks they've averaged $2.024/gal.; the all-time four-week high set back in May and early June was $2.042/gal.

Finally, US distillate stocks continue to fall even as production ramps up, down 17 million barrels from this time last year. Most importantly, stocks fell in the Northeast, the region most dependent on heating oil. We're well outside the range of average and going in exactly the wrong direction for mid-fall.



But I'm sure George W. will keep us all safe and secure. No worries.

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