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Trade gaps jumps to record high

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This morning's U.S. trade gap report from the Commerce Department jumped to a record $35.9 billion in April as imports of crude oil, autos, computers and consumer goods surged 4.7% to $116 billion, while exports led by chemicals, machinery, semiconductors and autos rose 2.2% to $80.1 billion.

The report showed that importers are meeting much of the increased demand for goods and services in the United States, while U.S. producers are also benefiting from the global economic recovery, but at a slower pace.

In a separate report, the Commerce Department said the current account deficit widened to a record $112.5 billion in the first quarter.

The current account is the broadest measure of the nation's balance sheet with the rest of the world. It includes trade goods and services as well as capital flows.

Inflows of foreign capital fell 55% to $113.3 billion after particularly strong inflows following September 11 as investors sought the safety of Treasuries.

American capital outflows to other countries also shrank sharply in the first quarter, falling 86% to $13.9 billion. The U.S. dollar's value rose 3% in the first quarter against a trade- weighted group of seven currencies, the government said.

Jobless claims fall by 2,000

Initial jobless claims fell by 2,000 for the week ended June 15 to 393,000, which was not as low as the forecast among economists looking for a jobless claims number of 388,000. The previous weeks jobless claims number was revised upward by 5,000 to 395,000.

The four-week moving average, which smoothes out week-to-week fluctuations, was 396,250, down 7,250 from the previous week's revised average of 403,500.

Continuing claims during the week ended June 8 were 3.8 million, up 23,000 from the preceding week's revised level. The four-week moving average was 3.8 million, down 14,250 from the previous week.

Stock futures edge lower

Stock futures are down fractionally this morning as S&P futures trade down 0.50 at 1,019.80. NASDAQ futures are down 4.00 at 1,099.00 and Dow futures are lower by 15 points at 9,545.

Fair value for the S&P 500 today is $1.78. That price will not change during the day. HL Camp & Company has their computers set for program buying at $3.02 and set for selling at $0.046. Fair value for the NASDAQ-100 today is $6.15.

Treasuries are seeing modest selling this morning as the YIELD on the benchmark 10-year ($TNX.X) rises to 4.761%.

Jeff Bailey
Senior Market Technician
Option Investor

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