A tough month for commodities and things could get worse. While stock prices continued to move sideways again in July -- the Dow industrials are down 0.75 percent since the start of the year seven months ago -- certain commodity prices moved sharply lower last month. Oil took the biggest hit, down 21 percent, while gold saw prices fall 6.5 percent. And the declines are continuing today. Oil has dropped an additional 2.5 percent in early trading and has dropped below $46 a barrel, the lowest level in more than four months. It is all about supply and demand. The world remains awash with oil while global demand is softening. Add into the equation the big increase in Iran oil exports and you are setting the stage for even more price plunges.
A tough month for commodities and things could get worse. While stock prices continued to move sideways again in July -- the Dow industrials are down 0.75 percent since the start of the year seven months ago -- certain commodity prices moved sharply lower last month.
We are actually starting to see some gas prices beginning to react to the fall in oil. After peaking above $4 a gallon, I am seeing some prices at the pump moving lower. One North County gas station I saw this morning had regular unleaded at $3.59. This is probably just the beginning and there's every reason to believe we will see gas with a $2 handle before long as refineries get finished with changing blends and the Torrance refinery gets back into production.
It's back to work for the Greek stock markets this morning. After being unplugged for five weeks as the country dealt with its budget crisis, the markets have reopened with huge losses. The major Greek index is down more than 20 percent with bank stocks taking the brunt of the hit.
The parade of economic reports begins today. The Department of Commerce reported personal incomes rose 0.4 percent in June but spending was up on 0.2 percent. It is just the latest so-so report on the economy. We probably will get more of the same the rest of the week as a series of employment reports are released starting on Wednesday with the ADP survey on civilian employment. It will probably show payroll rose in July by about 230,000, an OK number but not great. Thursday brings the monthly report on layoff announcements as well as the weekly report on initial claims for jobless benefits. Then on Friday we get the official Department of Labor report on payrolls and the nation's unemployment report.
If you are still wondering when the Fed will begin raising short-term interest rates, take a look at the yield today on the closely watched 10-year U.S. Treasury note. A few weeks ago it broke out to above 3.0 percent on the certainty the first rate hike by the Fed in 10 years was right around the corner. However, weakness in the Friday's employment cost index and other readings have sent rates sharply lower, with the 10-year note hitting 2.17 percent this morning, a two-month low.
"Mission Impossible: Rogue Nation" blew away the box offices this past weekend taking in $56 million, well above the anticipated $35 million projections. The fifth in the series starring Tom Cruise has proven to be an amazing success. Here is an interesting factoid: When Wilford Brimley made the movie "Cocoon" in 1984, he was actually only 49 years old. Tom Cruise is 51.