Two reports showing worse than expected economic news from the U.S. economy are helping to send investors out of higher risk equity and commodity markets. This morning’s weaker than expected U.S. PPI and housing numbers showed that the U.S. economy may not be as strong as originally estimated.

Equity markets are selling off at the midsession following the release of the poor U.S. economic numbers. This is occurring despite bullish earnings from Apple, Inc., Texas Instruments and Caterpillar. Today’s break has caught traders by surprise as many thought the market would focus on earnings rather than economic reports. Today’s weak economic numbers are giving traders an excuse to take profits in the stock indices after a recent surge put prices in overbought territory.

Treasury futures are soaring following the release of weaker than expected U.S. economic data. Traders are seeing this as a sign that pressure will remain on the Fed to keep interest rates low and to perhaps provide additional liquidity to help stimulate the economy. The sell-off in the equity markets is also helping to drive traders into the lower yielding December Treasury Bonds and Treasury Notes.

The U.S. Dollar is surging at the midsession following 14-month low. Weak U.S. economic news is helping to cut investment desire to buy higher risk, higher yielding assets. The December Euro failed to take out 1.50 which helped start the break in that market. The Bank of Canada helped trigger the start of the break in the December Canadian Dollar when it turned up the heat for a possible intervention. At its meeting today, it emphasized that the recent rally in the Canadian Dollar offset gains in the economy. This statement ignited the initial selling in the currency.

December Gold has given back all of its earlier gains and is now trading lower for the session. The turnaround in the Dollar is helping to put pressure on the precious metals. Once again gold broke rank with the Dollar before beginning the sell-off. While the Dollar was reaching a new 14-month low, gold was struggling to reach a new all-time high. This was a sign that investors are not willing to pay up for gold at this time.

December crude oil turned down as speculators took profits, equity markets weakened and the Dollar strengthened. After breaking $80 per barrel, selling pressure pushed this market lower. There is a possibility of a closing price reversal top today which could indicate a break back to $75.00.