Stocks got hammered again today as the S&P 500 lost another 1%. Markets opened higher in morning trade after the expiration of the ECB’s LTRO. Credit markets improved on the day as the Ted Spread declined over 8%, LIBOR was little changed and Euro sovereign debt had little reaction to the ECB’s actions. Martkit’s SovX Western Europe and North America CDX IG were both tighter on the day. Volume was meager at the NYSE though heavier during the late day selling. Breadth was negative at almost 3:1.
ADP Employer Services said that the private sector added 13,000 jobs in June, much less than expected. The September U.S. T-bonds are steady to higher.
The Chicago Purchasing Managers’ index fell from 59.7 to 59.1 in June, a little better than expected.
The Mortgage Bankers Association said that its index of mortgage applications was up 12.6% last week to the highest level in over a year, helped by refinanceings. The average rate on a 30-year mortgage fell from 4.75% to 4.67% last week.
Grains and Cotton
The USDA estimated the 2010 planted area for:
Corn at 87.87 million acres, up almost 2% from a year ago and less than expected.
Soybeans at record high 78.87 million acres, up 2% from a year ago and more than expected.
All wheat at 54.31 million acres, down 8% from a year ago and more than expected.
Spring wheat at 13.91 million acres, up 5% from a year ago.
Cotton at 10.91 million acres, up 19% from a year ago and more than expected.
The USDA said that, as of June 1st, stocks of:
Corn totaled 4.31 billion bushels, up 1% from a year ago.
Soybeans totaled 571 million bushels, down 4% from a year ago.
All wheat totaled 973 million bushels, up 48% from a year ago.
December cotton fell 1.75 cents to 76.38 and December corn jumped up 29.5 cents to $3.735 after this morning’s report.
November soybeans were down 9.5 cents at $9.025 after the USDA announced more plantings than expected.
August hogs closed up .70 at 81.65 while pork producers watched corn prices jump higher. August cattle finished up 1.27 at 90.02.
Hurricane Alex is no threat to Florida, but some traders may be expecting more storms ahead. September orange juice closed up 5.45 cents at $1.4835, the highest in 14 weeks.
The U.S. Department of Energy (DOE) said that crude oil supplies were down 2.0 million barrels last week to 363.1 million barrels. Supplies of gasoline were up 500,000 barrels and distillates were up 2.5 million barrels. August crude oil ended down .31 at $75.63.
The DOE also said that, over the past four weeks, gasoline demand was up 1.5% from a year ago and distillate demand was up 10.9% from a year ago.
Hurricane Alex is expected to make landfall Wednesday evening (tonight), just south of Brownsville, Texas, bringing heavy rain and causing possible flooding.
September copper ended up 2 cents at $2.9505, helped by positive economic news out of Europe.
The September euro is steady to higher after the European Central Bank reported that 171 banks borrowed 131.9 billion euros over the past three months, much less than expected. Also, Eurostat estimated that consumer prices in the Euro area were up 1.4% in June from a year ago, down from a 1.6% annual gain in May.
Germany’s unemployment rate improved from 7.7% to 7.5% in June.
Statistics Canada said that real GDP was unchanged in April and up 3.3% from a year ago. The September Canadian dollar is trading lower.
Housing starts in Japan were down 4.6% in May from a year ago, weaker than expected.
The U.K.’s Office for National Statistics postponed its release of first quarter GDP figures until July 12th.
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.
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