A very rare Monday here….This was an extraordinarily unusual event in the last 7 months with just the EIGHTH negative Monday in the last seven months. Stocks were higher most of the day before a final hour sell-off took equities into the red. Stocks ultimately closed down by 0.4%. Volume was very light on the day though did pick-up with the selling in the final hour. Breadth was about even. Stocks have come a long way in a very short period and investors have gotten very optimistic about future equity performance. A brief pull-back might not be such a bad thing after all.
From Daily Futures:
The U.S. Treasury said that it will begin selling off the 7.7 billion shares of Citigroup that it owns from the 2008 bailout.
The Federal Reserve begins a two-day meeting tomorrow and is expected to keep the federal funds rate unchanged at .25%. The June 2011 eurodollars were unchanged at 98.445.
According to David Pett at the NationalPost.com, 84% of the 174 S&P 500 companies that have reported first quarter earnings have beaten expectations, much stronger than usual.
Grains and Cotton
The USDA said that last week’s export inspections of:
Corn totaled 32.8 million bushels, down 4% from a year ago.
Soybeans totaled 8.0 million bushels, down 4% from a year ago.
Wheat totaled 9.8 million bushels, down 28% from a year ago.
July wheat dropped 17.5 cents to $4.88.
Statistics Canada said that plantings of durum wheat are expected to be down 35% this year to 3.7 million acres. Canola plantings however, will be up almost 5% to a record high 16.8 million acres.
Yesterday’s 6 to 10 day forecast from the National Weather Service is expecting above average precipitation throughout the Midwest with normal to below normal temperatures. July corn was down 1.5 cents at $3.595.
After Friday’s close, the USDA said that there were 10.769 million head of cattle on feed as of April 1st, down 3.5% from a year ago and less than expected. Placements in March were up 2.7% and marketings were up 4.3% from a year ago. June cattle closed up .67 at 95.50, near the contract high.
July cocoa closed up $30 at $3,228, the highest close in twelve weeks with ongoing concerns that supplies will be tight again this season.
July sugar ended up .10 at 15.85 with concerns of a drought in two of China’s sugar-producing provinces.
June gold ended up .30 at $1,154.00 while the future of Greece’s finances remains unresolved.
Until Greece can convince Germany that it is serious about cutting its budget deficit, Germany continues to hold back aid. The June euro finished down .0043 at $1.3345.
A survey by the Canadian government of 15 private economists expects real GDP to be up 3.1% in 2010 and again in 2011. The June Canadian dollar ended down .15 at 99.84.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.