German stocks are on a five-day winning streak as concerns that higher fuel costs might cut airlines’ and automotive companies’ earnings subside.

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In a span of four weeks airlines company Deutsche Lufthansa AG posted sizeable earnings as crude oil prices stayed low this week. Tiremaker company Continental AG, which also took advantage of the low oil costs, posted gains this week.

Deutsche Postbank AG has been winning the most in two months. This winning streak started following speculations that parent company Deutsche Post will be selling the subsidiary for about 12 billion euros ($18.6 billion).

There was an added 41.76 to the benchmark DAX Index, which translates to about 0.6 percent, to 7,096.79. Climbing for two months in a row, the measure gained 2.1 percent. DAX futures that are bound to expire in June were able to gain 0.4 percent to 7,109.5. Germany’s 110 biggest companies gained in the HDAX Index about 0.7 percent to 3,641.95.

Crude oil intended for July is expected to decline after a showing that US consumption declined compared to the same period the previous year. There was a huge drop in July delivery contracts by 3.4 percent to $126.62 per barrel.

“Oil had reached clearly painful levels and such a distinct drop comes in handy, showing how much speculation is included in the price. This should have a supporting impact,” said equities head Karsten Stroh, JPMorgan Asset Management.

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CAC 40 Index of France increased by 38.38, or 0.8 percent, to 5,014.28 in Paris. This has a 0.4 percent extension of this month’s gain. There was also a 0.8 percent gain for the SBF 120 Index.

The results for France this week were varied, unlike Asian stocks that seemed to follow a uniform trend, some stocks gained while others declined:

• Air France-KLM Group (AF FP), which is Europe’s biggest airline, advanced 99 cents, or 6.1 percent, to 17.19 euros as crude oil declined extremely low in two weeks due to an overall reduction in fuel demand, which for the airline company, meant reduced fuel costs.
• Michelin SA. The much reduced crude oil prices has indeed redounded to the benefit of this company. The tiremaker, which needs oil to manufacture synthetic rubber, was able to gain an additional 50 cents, or 0.9 percent, to 57.50 euros.
• Total SA, the third-biggest European oil company, came down 36 cents, or 0.6 percent, versus 56.09 euros.
• Alcatel-Lucent SA (ALU FP), which supplies telecommunications equipment, gained 13 cents, or 2.8 percent, to 4.86 euros. It may be of interest to note that the company is gearing up to sue Microsoft Corp. for $419 million after Microsoft allegedly committed a patent violation as regards its Xbox video-game player.
• Carrefour SA (CA FP) surged high in seven days as it gained 68 cents, or 1.5 percent, to 45.07 euros. The company revealed plans of selling natural gas and electricity in Belgium.
• Electricite de France SA (EDF FP), which produces and supplies power, is on its third-week advance as it attained 1.58 euros, or 2.3 percent, to 69.58 euros. Analysts say that electricity rates in Europe will soon increase up to 10.
• Natixis SA (KN FP) advanced 19 cents, or 2 percent, to 9.78 euros. The bank said it might be forced to cut jobs about 850 out of 22,000. This statement came out because of huge financial losses the investment bank incurred due to writedowns on subprime-infected assets.

Renault SA (RNO FP) is on an eight-day high as it advances 2.00 euros, or 3.1 percent, to 66 euros. This car manufacturer will work, in a joint venture, with Suez SA’s Sita waste unit to recycle cars, by virtue of a European Union antitrust approval.

Actively traded Asian stocks in the United States surged after showing a remarkable week-long performance. Toyota Motor Corp. has escalated production of vehicles while JPMorgan Chase & Co. forecasted an increase in Infosys Technologies Ltd.’s prices of shares.

A 1.2 percent to a 163.98 one-week high rise has been attained by the Bank of New York Co.’s Asia ADR Index.

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For the Nikkei 225 Stock Average futures, which expires June, we have these data:

• Chicago 14,370;
• Singapore 14,375; and
• Osaka, Japan 14,370.

Toyota posted the largest gain in a span of two weeks that added 2.9 percent to $102.05. this in turn was the most influential regarding the index’s advance.

As surging fuel costs triggered exports of gas-efficient cars to North America, Toyota has been leading gains in domestic vehicle production the previous month, as reported by Japan Automobile Manufacturers Association.

Infosys, second-biggest software-services provider in India, made a huge leap by 8.3 percent to $49.11, the most it’s ever done from April 15. JPMorgan analysts reveal that the company’s revenue outlook has tremendously improved, prompting them to hike by 27 percent their year-end target price.

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Rumors of higher interest rates to boost lending income of Japanese banks cause Japanese stocks to soar, extending advantage gained in May.

The biggest gainer this time is Mitsubishi UFJ Financial Group Inc., which is the largest publicly traded financial institution in Japan.

Sony Corp., emerged stronger following a more than expected US economic growth, while Tokyo Electric Power Co., the largest Japanese utility, increased following the decline of crude oil recently. Aderans Holdings Co. and several other entities under Steel Partners gained momentum following a motion at a shareholder’s instance to get rid of management.

The Nikkei 225 Stock Average reached a high of 214.07, or 1.5 percent. This closed at 14,338.54 in Tokyo trading. Counting from January 10, this was the highest ever as it capped a gain of 2.3 percent this week. We see a 27.51 or 2 percent increase in the Topix index to 1,408.14.

“Investors appear to be shifting their funds from bonds to stocks as an inflation hedgeWith short-term rates likely remaining low, higher longer-term rates will help boost profitability at financial companies,” said fund management head Hisakazu Amano, T&D Asset Management Co., Tokyo.

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Gold has shown signs of recovery this week as it trades higher following a rebound in crude oil and a decline in the US currency versus the euro. Gold is once again in demand as hedge against inflation. Meanwhile Silver surged to just over 2 percent.

Oil has just recently reached 1.3 percent as the euro recovers from a three-day low. This week, gold plunged 3.7 percent, counting from the middle of March, this is gold’s hardest fall, after the US dollar’s huge losses versus major currencies, and oil fell from a record. Gold’s highest attained level was in March at $1,033.90 per ounce.

Regarding delivery intended for August, gold futures surged $9.80, or 1.1 percent, to $891.50 per ounce. In May, gold increased 3.1 percent. This year, it has reached 6.4 percent.

“Any sell-off in the energies and rally in the dollar have been leaning hard on the metals. The sell-off was overdone. The ratio between gold and crude is out of whack. If there is a sell-off across the board in commodities, the metals will be down the least. Gold and silver will hold because they haven’t rallied as much,” said Eagle Futures Inc. trader Nick Ruggiero, in New York.

Speculation that slaughterhouses will be increasing pork-buying in order to meet the increasing demand in the United States has caused a rise in pork. In a similar manner, cattle have gone up as well.

Prices of wholesale pork skyrocketed to 6.9 and attained a 23 month high on May 15, greatly exceeding the 6.3 percent attained by hog futures.

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This year the prices of wholesale pork have gone up to 37 percent, translating to 79.74 cents per pound, according to USDA data. This weekend meatpackers will slaughter about 119,000 hogs, an increase from an earlier 27,000 a week. The figure was 94,000 hogs during the same date last year, according to a government report.

“Next week, packers will have to step up for a full week’s slaughter and will have to pay a little more for hogs. There’s still good demand for the hogs,” said analyst Joe Kropf, Joe Kropf and Sid Love Consulting Services Inc., Overland Park, Kansas.

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The speculation that the current decline in sugar has fueled demands caused the commodity to rise in New York trading.

Since December 7, Futures have touched the lowest level on hunch that there will be an oversupply of the commodity globally by the year ending September 30, 2009. Meanwhile, the US dollar performed poorly against six other actively traded major currencies by 0.2 percent, coming down from an earlier 0.3 percent surge. This leaves traders one thing to do - invest in commodities as a hedge against the weaker dollar.

For July, there has been a rise in sugar futures by 0.05 cent, or 0.5 percent, to 10.02 cents per pound on ICE Futures U.S. Sugar earlier reached 9.82 cents, and for this week gained 0.1 percent. However, for the month of May the commodity declined by 15 percent.

“There is demand around. It’s slowing the drop. We are finding support but no impulse to move higher,” according to senior vice president Michael McDougall, Newedge USA LLC, New York.

Worldwide sugar production is expected to be greater than demand for the commodity by 3.29 million metric tons in the 2008 up to September 2009, according to Kingsman SA, sugar broker/researcher. Meanwhile the forecast by Czarnikow Group Ltd. is that the surplus will be reduced to about 1.6 million tons in 2009 from the year ending September 30’s 11 million tons.

The market has already acknowledge the fact that the US dollar has stabilized, and as a result the prices of sugar might again fall.

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Traders are looking to commodities as a hedge against inflation while the US dollar succumbs to the euro in the midst of crude oil price increases. This just goes to show that commodities can be an attractive alternative and tool against inflation.

Crude oil advanced by 33 percent in 2008 while the US dollar dropped by 6.6 percent against the euro. This made oil as well as other commodities more attractive to traders in other currencies. There has been a decline in prices this week following a government report regarding a falling fuel consumption in the US last week as compared to the same period last year.

There has been a rise in the prices of crude oil for July by 73 cents, or 0.6 percent, which translates to $127.35 per barrel. Futures on May 22 attained a record level of $135.09. There was also a decline in prices this week by 3.7 percent. During the past year, these prices have even doubled, but now the decline has been tremendous, and is now at its lowest drop in a week since March.

“The dollar has a big impact on crude prices. Any shift in the dollar’s direction will prompt investors to look at crude as a store of value,” said oil practice director Rick Mueller, Energy Security Analysis Inc., Wakefield, Massachusetts.

A government statement regarding the US economy’s growth, during the first quarter, exceeding forecasts sent treasuries down. This in turn, increased the note’s yield to the highest level since December.

US debt declined before the Treasury’s auction of five-year notes that amounted to $19 billion. This occurred after the two-year securities, which attracted tepid demand, were sold for $30 billion. In another report Dallas Fed President Richard Fisher said that the central bank will likely hike interest rates should inflation rise exceedingly.

The yield on note increased by 7 basis points, or 0.07 percentage point, to 4.07 percent. It, however, reached 4.08 percent, which was the highest ever counting from December 28. There was a drop in the 3.875 percent security’s value, which will mature May 2018. The said drop was at 18/32, or $5.63 for every $1,000 face value, to 98 14/32.

“A couple of months ago, numbers like today would have sparked a bit of a rally, but sentiment is different than it was in March and early April,” according to fixed-income strategist James DeMasi, Stifel Nicolaus & Co., a brokerage in Baltimore.

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As oil fell for the third day today, the majority of US stocks increased as prices of oil greatly benefited companies that rely on consumer spending, whose earnings prospects were given a boost by the trend.

Two companies Target Corp. and Best Buy Inc. advanced with the retreating crude oil prices, which have gone down by more than $2 per barrel. Big Lots Inc., the most prominent seller of overstocked items, reported first-quarter sales and profit that exceeded analysts’ expectations. MasterCard Inc. also to a huge leap forward as it gains for the second time this week duet to the fact that consumers’ use of credit and debit cards have increased.

Seven stocks rose for every six that fell on the New York Stock Exchange. The Standard & Poor’s 500 Index lost 0.54 point, or less than 0.1 percent, to 1,390.3 at 10:05 a.m. in New York. The Dow Jones Industrial Average slipped 15.15, or 0.1 percent, 12,578.88. The Nasdaq Composite Index increased 8.01, or 0.3 percent, to 2,494.71.

Another factor responsible for the current gains in stocks was the government statement regarding US economy’s growth that by far exceeded forecasts in the first quarter as citizens bought fewer imported goods, tremendously helping curb the trade deficit.