Stocks today traded in mixed fashion as material and energy related companies continue to rebound while tech stocks fell. At the close the Dow gained 67 points to finish the session at 17,073 on light volume.
A couple of weeks ago the US Commerce Dept. slapped tariffs on imported steel and the resulting rebound in steel company shares has been big. Today, iron ore followed suit and shot higher by 20% following China’s discussion over the weekend to raise deficit spending levels this year to help stimulate economic growth. The gubment of China wants more infrastructure spending in railway and road projects and this news sparked the biggest single day jump in iron ore prices in history. A cheer went up from miners in the Mesabi ore range of Northern Minnisota. Ore producers in the US and emerging markets all jumped but one needs to ask the question about how long an economy can sustain growth if the stimulus, being artificial in the form of negative interest rates and deficit spending, is the driver of that growth. Only your iron ore miner knows for sure.
WTI crude continued to gain ground in alignment with the news for more stimulus from China and the possibility of a similar announcement in Europe on Thursday. WTI crude ended the day up almost 6% at $37.90 per barrel. North Sea Brent rose as well and finally cracked the $40 price level. While stockpiles remain at historic levels some gurus are saying that recent price hikes might not last.
Gold worked both sides of the fence today before closing the day down $2.70 an ounce to $1,268. Intraday trading saw gold hit a 13 month high.