Henry Thornton writes:

Yesterday’s Asian market turmoil was
not repeated in New
York overnight. The Nasdaq was down by 2% at one point,
but recovered to be down only 1%, with the S&P down by 0.4%. Bond yields
were up a smidgen.

Looking at the real economy,
commodity guru Nick Raffan writes in his monthly report: “It’s ahead at full
steam and seemingly not a log in sight. This time last year there were few
pundits forecasting today’s metal prices, gold perhaps being the exception
failing to achieve some of the more bullish forecasts. Stronger than expected
demand and to-date muted supply response along with labour disputation, has
forced many pundits to drastically revise upward metal prices for 2006. US manufacturing remains in a bull
phase. In the short to medium-term orders for durable goods, notably for
non-ferrous metals will not only continue to rise but will accelerate. CY2006
looks like being another boomer for commodities as a

Overnight, some of the calm was
engendered by a US Fed official “talking up the economy” as Henry’s favourite
trader put it. The US “Beige Book” has some good news
(follow the link below). Also, US CPI was in line with expectations, and
especially “core” inflation.

Read on at Henry
Thornton here.