Natural Gas broke below $2 today, hitting a low of $1.976, before closing at $1.981. Year-to-date, Natural Gas is down 33.7%. Nat Gas is down 52% over the past year, slightly below Cotton’s 55% decline as the worst-performing major commodity. While these might seem like steep declines, it looks like there is no end in sight to Nat Gas’ declines.

In treasury markets, the 30-year bond and 10-year note yields rose slightly. EUR/USD rose slightly, though finished the day in the middle of its range near the 1.31 figure. USD/JPY closed the day near the 81 figure. 

Tomorrow, earnings are ramping up with Commerce Bancshares (CBSH) and Rite Aid (RAD) before the bell. Google (GOOG) reports after the bell. Analysts expect GOOG to report earnings of $9.62 per share compared with $8.08 a year ago. In today’s trading, GOOG gained 1.5% to $635.96.

On Friday, JPMorgan (JPM) and Wells Fargo (WFC) report before the bell. 

 Bonds yields are higher today, with the 30-year bond and 10-year note trading lower by 0.5% and 0.25%, respectively. EUR/USD was trading higher on the session, though it surrendered some early gains. Halfway through the U.S. session, prices were hovering near the 1.31 figure.

Other News and Numbers:
– The Department of Justice is suing Apple (AAPL) and publishers (CBSA, NWSA, and PSO among them) for colluding on the price of e-books. AAPL is trading flat on the day following the news

– VMWare (VMW) announced that its CFO would be leaving. VMW is down 2.3% to $107.80

– Nokia (NOK) warned on earnings earlier saying that their smartphone might lose connectivity. NOK is lower by 13.4% on the news

Alcoa’s (AA) earnings last night certainly helped set the stage. Many, including us at KOTM, were expecting a disappointing number from the aluminum-producer. AA posted a profit of $0.10 per share, compared with expectations for a loss of $0.04. AA is indicated 5.7% higher at $9.86 in the pre-market.

In currencies, we are not surprised to see EUR/USD higher this morning – as we wrote yesterday. EUR/USD prices showed surprising resiliency over the past two sessions to the sell off in risk. The pair gained 0.5% this morning to 1.3130. USD/JPY is toward the top of its tight range, holding just below the 81 figure. 

Crude futures are higher this morning, though with inventory data out at 10:30 a.m. ET, prices may be reluctant to rebound further. Futures are up $0.30 to $101.32 at the moment. Bears continue to point to the $100 figure as a key level to the downside. We would not be surprised to see that level tested following the data this morning. Natural gas prices are also higher, by 0.2%.

Bond yields are slightly higher overnight as the 30-year bond prices are lower by 0.4%. 10-year note futures are down 0.2%.

At 2 p.m. ET, today, the Federal Reserve releases its Beige Book.  

– 1-800-Flowers (FLWS) coverage initiated at buy with price target $5: Noble Financial

– Vocus (VOCS) price target moved to $26 from $32: Stifel Nicolaus

– SMSC (SMSC) price target moved to $32 from $26: Needham

Gold also saw a modest increase as front-month futures gained 1.1% to $1,662 per ounce. Silver saw similar gains, while Platinum dropped 1.15% to below $1,600 per ounce. This widens the Gold-Platinum spread that has historically seen Platinum prices at a premium to Gold. That relationship changed near November 2011.

Oil prices fell in tandem today as well. Tomorrow’s inventory figures could be the impetus to push oil below $100 per barrel – if we see another “risk off” (we hate that term) day. Last week’s inventory figures showed that output was at a 13-year high. Further output gains or inventory builds could have oil testing year-low levels near the $95 level.

The one question we have about today’s price action, though, is: Why didn’t recent correlations with EUR hold? The currency has not participated in this two-day sell off that has engulfed equity markets. Something has to give – either this is a fake-out on the equity front; or the EUR is in store for a decline below the 1.30 level. Every time it looked like EUR/USD was going to drop today, new buyers came in, leaving the pair at 1.3085. We would not be surprised to see this move higher tomorrow barring negative news on the equity front.

Oh, one last thing, Alcoa (AA) earnings are released after the bell today. Try not to draw too much from that… the stock is not indicative of earnings season.

Despite this sharp decline in equity markets, EUR/USD has been fairly resilient this morning. It is trading flat for the week – compared to a 2% declines in oil and equity markets. Gold prices are up 1.6% over the same period.

Today, oil prices briefly fell below $101 per barrel, hitting a low of $100.75. Support is expected at the $100 figure. Natural gas, which was higher early in the session, has fallen to fresh lows, down 2% to 2.061. Guess you can’t disguise a dog with lipstick.

More News and Numbers:

– Best Buy’s (BBY) CEO resigned today, while Yahoo (YHOO) announced a new structure (Forbes). BBY is trading down 4% after an initial spike; YHOO is down nearly 1%

– Gartner estimates that demand for Apple’s (AAPL) iPad 2 will cause worldwide tablet sales to soar. Tablet sales should be 119 million units in 2012. AAPL is trading down 0.6% to $632

–  Alcoa (AA) is down nearly 2% ahead of earnings report tonight, which expects $0.04 loss on the quarter

Wednesday:
– 8:30 a.m. ET: Import/Export Prices
– 10:30 a.m. ET: EIA Petroleum Report
– 1 p.m. ET: 10-year Note Auction
– 2 p.m. ET: Federal Reserve Beige Book

Thursday:
– 8:30 a.m. ET: Weekly Jobless Claims
– 8:30 a.m. ET: Producer Price Index
– 8:30 a.m. ET: International Trade
– 10:30 a.m. ET: EIA Natural Gas Report
– 11 a.m. ET: 3-month, 6-month, and 5-year TIPS Announcement

Friday:
– 8:30 a.m. ET: Consumer Price Index
– 9:55 a.m. ET: University of Michigan Consumer Sentiment