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The US Dollar firmed up a bit as traders cover short positions, and higher yielding instruments fell on profit taking. The US$ was a bit firmer Tuesday, pulling up from its recent 14 month lows, as investors unwound short positions and took profits in high-yielding currencies after a sharp drop in stocks and commodities. The VIX indicator .VIX, Wall Street’s favourite barometer of market volatility, jumped 9.16% Monday, highlighting the skittish sentiment on stocks, and other riskier assets like growth linked currencies. The US$, a safe-haven when doubts about a global recovery emerge, traded firm around the 76 mark against a basket of currencies, posting its best daily gain since September Monday, pulling further away from a 14 month low of 74.94 on Oct. 21. Savvy market observers said the heavy short positioning on the US$ had made many investors hesitant to sell the “greenback” despite the economy’s weak fundamentals. Data late last week showed currency speculators increased their bets against the US$ in the week to Oct. 20 with the value of net short positions rising to US$18.65B from US$17.99B the week prior. Read more

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Goldman Sachs Group Inc’s trading operations helped the dominant Wall Street firm quadruple its earnings, but investment banking results were not as exciting and its shares sold off a bit on the report. Goldman’s compensation packages have drawn some scrutiny, but stayed on to hand out more than US$20B in Y 2009 bonuses, the equivalent to more than US$630,000 per employee and is likely beat a record set for compensation in 2007. The report noted that Goldman’s investment banking and asset management revenues were lower. The bank fell to No. 2, behind Morgan Stanley, in M&A adviser rankings for deals announced globally through Q-3 according to Thomson Reuters. Goldie also dropped a spot to No. 7 in global capital markets. Fixed income, currency and commodities (FICC) trading nearly quadrupled, helping propel overall revenue to a forecast beating US$12.37B. However, the US$5.99B in FICC revenue, driven by credit products and mortgages, lagged Q-2 and fell short of some analysts’ high expectations. Read more

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Intel’s earnings signaled a strong holiday sales season for the computer industry Tuesday, with Q-3 earnings way ahead of Wall Street expectations. The world’s biggest chip maker showed that its business is recovering quickly from the recession, with revenues down only 8% from the previous year, compared to 15% and 26% declines in Q’s 1 & 2, Y 2009. The results make it abundantly clear that computing is essential to people’s lives, proving the importance of technology innovation in leading an economic recovery,” said Paul Otellini, Intel chief executive, in a statement. The company’s results, at the start of the earnings season, boost investor hopes of strong Q-3 performances from technology companies the leaders in this market recovery. Google and IBM report their results on Thursday and are covered in Stock Talk today. Read more

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Alcoa, the USA’s biggest aluminum producer, surprised Wall Street Wednesday by reporting a return to profitability in Q-3 after three consecutive quarters of losses, thanks to rising metal prices and aggressive cost-cutting. The results provided a positive start to the US corporate earnings season from a manufacturer that is closely watched as an early indicator of industrial earnings. Alcoa, reporting after markets closed in New York, was the 1st company in the DJIA to announce quarterly results for the three months to the end of September. Net income was US$77 M or 8 cents a share, down from US$268 M or 33 cents a share in the same period a year earlier but well ahead of analysts’ average expectations of a loss of about 10 cents per share. Revenue was US$4.6B, down from US$7.2B last year, but ahead of Wall Street forecasts. Read more

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Crude Oil prices climbed Monday as US stocks rebounded and the US$ weakend further against the Euro. Light, sweet Crude Oil for November delivery bounced back above US$70 bbl after touching an intra-day low of US$68.05 bbl and ended at US$70.41bbl on the New York Merc, it closed + 46 cents higher than the previous close. Crude Oil got lifted as Wall Street rebounded from the first two-week decline since July, boosted by a report which showed service industries returned to growth after 11 months of contraction. The Dollar declined against the Euro as recovery outlook encouraged investors to buy riskier assets, supporting dollar-priced Crude Oil as it became cheaper for holders of other currencies. In London, Brent Crude Oil for November delivery fell 3 cents to settle at US$68.04 bbl on the ICE Futures exchange.

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Crude Oil stabilized below US$70 bbl as mixed economic data failed to provide momentum in either direction. Light, sweet crude for October delivery ended 9 cents lower at US$67.96 bbl on the New York Mercantile Exchange. The contract earlier rose to an intra-day high of US$69.40 bbl on US stock gains and a weaker US$. Wall Street was driven up by upbeat retail sales after a four day losing streak for the Standard & Poor’s 500 Index. In London, Brent Crude for October delivery fell 54 cents to settle at US$67.12 bbl on the ICE Futures exchange.

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