Equities declined on the day in a rare occurrence. Much of the weakness was dollar related as a potential IMF bailout of Greece sent the Euro reeling again. The dollar rallied in turn and took down most commodity related names. Investors were also nervous about a weekend vote on the healthcare bill which is looking like it could pass. This is just one more sign of more government coming into the business place and has investors worried about how business friendly the Obama administration will be in the coming months and years. High beta names were particularly weak on the day as small caps declined 1.4%.
Breadth was once again weak at 3:1. Volume was moderately heavy compared to recent days – a trend that has been apparent over recent months. Down days tend to be higher volume days. All in all, the market finished with a gain of 0.75% on the week so the bulls can’t be too upset with the way the week finished.
From Daily Futures:
According to an article in Bloomberg news, some economists believe that another increase in the discount rate is coming soon. The June 2011 eurodollars are trading lower.
Grains and Cotton
The USDA said that 106,000 tons of U.S. soybeans were sold to unknown destinations for 2010-2011. May soybeans closed up 2.5 cents at $9.62.
After the close, the USDA said that, as of March 1st, there were 10.864 million head of cattle on feed, down 3.2% from a year ago, as expected. Placements in February were down 1% from a year ago and marketings were up 2%. June cattle were down .05 at 95.12.
The USDA said in today’s Livestock Outlook that “cattle feeding margins were positive for January and February of this year, and, if fed cattle prices remain at current levels, margins could be positive for several months.” They also expect beef exports to be up 9% in 2010.
According to Canfax, Canada had 1.002 million head of cattle on feed as of March 1st, up 4.8% from a year ago.
After the close, the USDA estimated this week’s beef production at 471.5 million pounds, down 3.3% from a year ago. Pork production was estimated at 439.8 million pounds, down .2% from a year ago. June hogs closed down .35 at 82.57.
Cocoa, coffee, and sugar all finished lower today, pressured by the rise in the U.S. dollar. May cocoa was down $59 at $2,834.
The Reserve Bank of India increased its key interest rate from 4.75% to 5.00% in an attempt to restrain the economy. It was the first rate increase since July of 2008. April gold fell $19.90 to $1,107.60. May copper closed down 2.30 cents at $3.3725.
Statistics Canada said that consumer prices were up 1.6% in February from a year ago, a little more than expected. Also, retail sales were up .7% in January to C$35.7 billion, better than expected. The June Canadian dollar ended steady to lower.
The June euro is trading lower, still pressured by a lack of agreement for helping Greece.
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.