Crude Oil Is Over Priced At The Moment

Crude Oil is hovering around US$90/Barrel and is looking expensive at the moment. With almost every adverse news currently being discounted at this price level, new entrants and oppurtunistic specualtors are making a quick buck in this scarce commodity, driving it's price further up. However, with US president talking hawkish against Iranian president along with continued threat from terriorism and fast growing world GDP, and winters in the northern hemi-sphere, crude oil is expected to remain warm, not withstanding
short term corrections.

Crude Oil At US$85/Barrel

Crude Oil has created a new high for itself by crossing US$85/Barrel mark. With winters approaching fast in the northern hemi-sphere along with strong global economic growth coupled with ever increasing dependance on this scarce commodity, is fuelling it's demand, and hence steep prices for this commodity. Agri commodities also are ruling high due to adverse weather patterns in fertile geographic locations, causing severe demand-supply mismatch.
Future for all these commodities looks bright, but for consumers it's a nightmare!

US Job Data

US job data released by labour department beat earlier forecast by experts of 60,000 jobs being added versus fresh data depicting that jobs that added infact are 90,000. This data can make US federal reserve pause in it's rate cut spree. It's very essential for US central banker to hold it's rates so that dollar can be hold steady against Euro, Yen, Canadian Dollar. If he cuts the rates then it might again unleash huge liquidity to riskier assets, which alredy are extreme inflated levels. Also central banks of US and European countries should slow down the level of printing their currency if they want to have financial markets in healthy shape and avoid bursting of equity and commodity bubble in an abrupt manner.

Inflated Equities

Falling dollar is inflating riskier assets like stocks and commodities. Emerging market stocks especially in china, India, Taiwan, Singapore are amid tremendous upward momentum due to huge flow of dollars from dollar investors and this has created extremely expensive equity valuations in some of these markets, especially in India and China. Crude oil too is continously trading above US$80/Barrel and stock markets are ignoring this important commodity price completely. History is evident that whenever crude oil has skaled a new peak, equity too has formed new high! As long as financial markets expect US federal reserve to cut interest rates, equity valuations will continue to be very expensive.

Crude Oil Is Below US$80/Barrel

Crude oil is trading below US$80/Barrel after oil producing countries raise the crude output by 5,00,000 Barrel/day along with reports of rise in oil and gas inventory in the US.
However with winter approaching in the northern hemi-sphere, demand for heating oil will keep price of this scarce commodity warm.

Agri Commodities

Agri commodity like wheat is breaking all price records due to fall in the crop production around the world because of bad weather and global warming. This has sent price of this very important commodity to inflated levels and hence is a cause of concern.

In the years to come, prices of agri commodities will continue to remain firm as global warming will take a toll on crop production along with growing demand due to ever growing population.

Commodities Are Cooling

Commodity prices are cooling off for the past few trading sessions and this is a very welcome sign with regards to overall inflation scenario. Also with concerns of U.S. economy slowing down because of lower consumer spending and weak housing sales and serious credit squeeze in the U.S. mortgage market, commodity prices have began to ease of substantially from their recent highs.

However crude oil is still trading above U.S.$70 per barrel for the past few weeks and is a major concern.

Some Stability In The Dow Jones Is Good News

Dow Jones closed 233 points higher on the back of some bottom fishing by market players. Dollar also climbed to 114.20 against the Yen, after falling continously for the past few trading sessions amid yen carry trade un-winding. History is evident that volatile currency movements can play havoc with stock and commodity markets, as seen this time as well. So keeping a very close watch on important currencies is very much desired if one wants to succeed in financial markets.

Gold Is Stable Amid This Stock Carnage

There is a old saying that in troubled times rely on Gold, well, that's seems to be the choice investors are choosing amid sell off's in stocks across the world. Gold is trading stable at U.S.$660 per ounce and so far escaped the carnage from stocks melt down. This precious commodity will continue to out-perform stocks in the short term as investors will consider it as a safe investment bet in these nervous and volatile times. As their is a serious erosion in the risk appetite of investors/traders, safer investment avenues like Gold and currency like Dollar will find favour. For the few weeks, stocks will bear the brunt of this yen carry trade un-winding currently under way. However, some very selective buying can be made in extremely resilient business fundamentals, but in very small quantities.It's however an individual choice and decision.