U.S. Stock Futures, Dollar Decline as Gold Gains as U.S. Debt Talks Stall

Source: Bloomberg

U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will slump after rallying within 1.4 percent of a three-year high, as the dollar dropped and gold climbed as failure to raise the federal debt limit intensified concern of a default.

S&P 500 futures expiring in September declined 1 percent to 1,327.60 at 7:26 a.m. in Tokyo, and Dow Jones Industrial Average futures lost 119 points, or 0.9 percent, to 12,502. The dollar slipped 0.8 percent versus the Swiss franc, 0.3 percent against the yen and 0.2 percent versus the euro. Gold futures added as much as 1 percent to a record $1,617.70 an ounce.

House Speaker John Boehner told Republicans that there’s no agreement on a plan for raising the ceiling before a default threatened for Aug. 2. A Republican congressional official said Boehner, speaking by telephone to lawmakers, is reporting that discussions are continuing. The impasse has boosted the chance S&P will cut the U.S. credit rating from AAA within three months to 50 percent, the company said July 21.

“Stock markets around the globe will look to price in a greater uncertainty premium on account of political squabbles in the world’s largest economy and the increasing risk that it may lose its sacred AAA rating,” Mohamed A. El-Erian, chief executive officer and co-chief investment officer at Pacific Investment Management Co., wrote in an e-mail. His firm is the world’s biggest manager of bond funds. The most likely scenario is a “last minute political compromise will avoid a default, but will leave the AAA rating extremely vulnerable,” he said.

Read more: http://www.bloomberg.com/news/2011-07-24/u-s-stock-futures-dollar-decline-as-gold-gains-as-u-s-debt-talks-stall.html

I'm sending my investments into 50% cash tomorrow.

...and I put the other $20 into gold.

:rofl:

that speck of gold dust in the vault?:evilgrin:

....I didn't actually get any gold, it was just a piece of paper with the word "gold" written on it. But it was written with a really nice pen!

You prefer buying high rather than low??? Tomorrow will be a good buying opportunity...hell, all week should be good.

The moment they pass some piece of shit bill will be a buying opportunity. I anticipate the markets going down more this week before a deal. Of course I always anticipate the Cleveland Browns will win a Super Bowl. LOL.

the only way it would drop way down is if there is no deal next week and we default. Even that will be all psychological and will be the best buying opportunity.

Incidentally, I'm all green today so far. :shrug:

while making money on short side, win win.

Some people stand to lose a lot if a deal is suddenly struck. This is a gambler's trap.

Of course, that is what Wall Street loves.

Get ready for another tumble in our economy.

I don't think Republicans are going to like the result.

We need to run a populist candidate at this time.

Gold for August delivery gained as much as $22.80, or 1.4 percent, to $1,624.30 an ounce and traded at $1,616.90 by 7:59 a.m. on the Comex in New York. Immediate-delivery gold was 1 percent higher at $1,616.98 in London after reaching a record $1,624.07.

http://www.bloomberg.com/news/2011-07-25/gold-surges-to-record-as-u-s-debt-impasse-threatens-default-aaa-rating.html