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For the week beginning Monday, October 17th

Commodity markets got off to a bumpy start today as hopes for a comprehensive package of European support measures were tempered by statements from German officials and U.S. manufacturing numbers were somewhat mixed.

In London, Reuters reports that LME official 3-mo. copper started the week in positive territory at $7,570/mt, as did official 3-mo. aluminum at $2,227/mt, before trailing off later in the session. In New York, COMEX copper for December delivery traded as high as $3.4635/lb. today before dropping back to around $3.38/lb. by mid-day.

Other commodities were also mostly flat to weaker this afternoon, with NYMEX crude for November delivery down below $86.50/bbl as COMEX December gold futures fell to around $1,670/to. On Wall Street, stocks also opened the week in negative territory, with the Dow Industrials off over 1% this morning as the yield on 10-year Treasury notes dipped below 2.2%.

With most eyes on Europe’s attempts to address the ongoing debt and financial sector woes this week, the economic news in the U.S. got off to a slightly better than expected start as the Fed reported today that industrial production in September increased 0.2%, while manufacturing advanced 0.4% for the month and 3.9% year-on-year. The positive news was offset somewhat by a negative report on manufacturing in the New York region (-8.5), the first regional manufacturing report for the month of October.

Later this week we’ll get new figures on the U.S. housing market, inflation, regional economic reports, and the Conference Board’s Leading Indicators.

Guest Blogger: Lynn Reaser, Ph.D. Fermanian Business & Economic Institute Point Loma Nazarene University fbei.wordpress.com

Q&A with Dr. Lynn Reaser Posted on October 5, 2011

Q: Should the U.S. try to weaken the dollar?

No: The dollar has strengthened recently as the U.S. has become a “safe haven.” While America certainly has its problems and interest rates are at rock-bottom levels, we look safer than many other regions. Questions over the ability of Greece to avoid default and the very survival of the Eurozone make the euro unattractive. A global recession could pummel many of the developing countries.

But, should the U.S. hope for or work for a weaker currency? The U.S. economy really needs stronger household and business spending both domestically and abroad. While a lower value of the dollar might provide some boost to exports, subsequent efforts by other countries to depreciate their currencies to maintain competitiveness would be sharply counterproductive. A weaker dollar would produce winners and losers. Manufacturers and farmers would likely benefit from stronger sales abroad. Investors would see higher returns on their overseas investments. Consumers, however, would likely pay higher costs for imported goods and domestic substitutes, while foreigners might be more reluctant to finance our deficit if they expected the dollar to continue to slide.

The U.S. needs to continue to improve its competitiveness through investing in technology, encouraging innovation, and improving its education system. A cheaper currency is not the answer.

ISRI Spec of the Week: From ISRI’s Scrap Specifications Circular 2011, Guidelines for Paper Stock – Domestic Transactions: (10) Magazines (OMG) Consists of coated magazines, catalogues, and similar printed materials. May contain a small percentage of uncoated news-type paper. Prohibitive Materials may not exceed 1% Outthrows plus prohibitive may not exceed 3%

Monday’s Quote: “Laugh and the world laughs with you, snore and you sleep alone.” -- Anthony Burgess