Stocks rose again on a Monday as analyst upgrades and takeover news sparked some buying. Trading was very light on the day as the holiday season approaches. The risk trade was back in vogue despite the rising dollar. Small caps and techs both gained over 1%. The VIX declined almost 6% during the session and fell back to its support levels near 20.50. It will be interesting to see if the VIX can break these levels. In recent weeks this has been a level that has consistently resulted in market downturns, albeit small and short lived downturns. The sideways churn continues into year-end as the S&P 500 fails to break out above 1120 on the upside and 1,000 on the downside. Daily Futures wraps up the action from all markets:
The Chicago Federal Reserve’s national index of activity improved from -1.02 to -.32 in November, a sign that below-average growth is still expected. The March 2011 eurodollars dropped .12 to 98.35.
Grains and Cotton
The USDA offices are closed today due to snow in Washington D.C., but today’s reports are expected to be available tomorrow. March wheat closed down 8.5 cents at $5.195, pressured by plentiful world supplies.
After Friday’s close, the USDA said that there were 11.282 million head of cattle on feed as of December 1st, down .6% from a year ago and less than expected. November placements were down 8.5% and marketings were up 3.6%. February cattle closed up .72 at 85.57.
After Friday’s close, the USDA reduced its estimate of the world’s 2009-2010 coffee crop from 127.4 to 125.2 million bags. In 2009-2010, they expect world ending stocks to fall from 41.0 to 34.7 million bags, or 26% of annual use. March coffee ended up .0035 at $1.4560.
March orange juice jumped up 5.60 cents to $1.3995 after temperatures in central Florida dipped into the 30’s this morning and are expected to again tomorrow morning. Also, after Friday’s close, a USDA official estimated Brazil’s 2010-2011 orange crop at 435 million boxes, up from 427 million boxes in 2009-2010.
OPEC meets tomorrow and is not expected to make any significant changes in production levels.
Japan’s Finance Ministry said that exports totaled 5.0 trillion yen in November, up 5% on the month and down 6% from a year ago, the smallest annual decline in fourteen months. The March yen fell .0093 to 1.0971.
Statistics Canada said that retail sales were up .8% in October to C$35.3 billion, the eighth gain in ten months. The March Canadian dollar closed up .41 at 94.23.
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.