Markets ended a volatile session to the downside as the S&P lost 0.2%. Volume was very light and breadth was even on the day. US government bonds continued to rally today as European sovereigns were primarily weaker. The Greek 10 year yield continues to climb higher reaching 10.59% today. Spanish bond yields were marginally higher at 4.54%. The cumulative probability of default in Greece is now at 67.24% according to CMA.
From Daily Futures:
U.S. Economy
Is widespread deflation a threat? The G-20 nations met and agreed over the weekend to cut their budget deficits in half by 2013. Most commodities finished lower, including gold. The September U.S. T-bonds closed up 30/32nds at a new contract high of 126.09/32nds.
The U.S. Commerce Department said that personal incomes were up .4% in May while consumer spending was up .2%.
The Chicago Federal Reserve’s index of national activity dropped from .25 to .21 in May, still a sign of progress.
Grains and Cotton
December corn fell 7.75 cents to a new contract low of $3.527, ahead of Wednesday morning’s U.S. acreage report.
November soybeans finished up 6.5 cents at $9.185 with some hoping that recent rains in the Midwest may have reduced the amount of soybeans that will be planted.
Overall, the weather forecast for the central U.S. is dry and sunny this week. July wheat was down 6.75 cents to $4.495 while the winter wheat harvest progresses.
Livestock
After Friday’s close, the USDA said that the number of U.S. hogs and pigs on June 1st was down 3.6% from a year ago, less than expected. The March to May pig crop was down 4.7% from a year ago. August hogs fell 1.75 to 82.17, the lowest close in a week.
Cocoa
Cocoa was one of the few commodities that closed higher today, helped by expectations that world consumption is exceeding production as the current 2009-2010 season winds down. September cocoa ended up $25 at $3,138.
Sugar
Dow Jones Newswires reported that Pakistan was looking to buy 175,000 tons of white sugar, but it wasn’t enough to support prices. October sugar closed down .57 at 15.82.
Energies
Reuters reported that Mexico closed two oil export terminals after Tropical Storm Alex crossed the Yucatan Peninsula and is expected to reach the southern tip of Texas sometime Thursday. Most of the oil rigs in the Gulf are expected to be clear of any danger. September crude oil ended down .53 at $78.90.
Metals
CIA Director Panetta said that Iran could have two nuclear weapons ready by early-2012. August gold closed down $17.60 at $1,238.60.
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.