Markets generally adopted a slightly more defensive tone on Friday. In the US, utilities and consumer stables managed small gains, but financials, consumer cyclicals and IT fell. Intel (INCT) dropped 2.9%, the steepest retreater in the Dow, as Bank of America said computer-chip supply may overwhelm demand. Dell (DELL) tumbled 7.2% after profit decreased by more than half, and a larger than expected loss at US home builder DR Horton (DHI) hurt their stock. In aggregate, the US market did manage to pare most of the losses, however, after the Labor Department reported a decline in mass layoffs. There was no first tier data. I did note that the ECRI’s weekly leading indicator remains elevated, albeit with signs that it might be rolling over.

Gold surged another $13 in Asia Monday morning to a new high and oil is up on Iranian war games. US stocks look primed for a triple digit day with, of course, basic resource stocks and oil producers likely to be at the vanguard of the move with the weaker Dollar / strong commodities bullish risk assets correlation trade, again. We’ve also just had the Existing Home Sales data which blew expectations out of the water with a 10.1% month on month gain to 6.1 million against expectations of a 2.1% rise to 5.7 million. More BBQ lighter fuel to throw on the bulls fire today.