Friday’s reversal proved to be nothing more than a short-lived reprieve from the market downtrend. Stocks were battered again on Monday as the S&P closed on the lows and lost 0.9%. The market started lower, but quickly reversed as earnings upgrades and tech strength bolstered the markets. From there the sell-off was slow and steady throughout the day. Investors have seen little reason to take on risk as regulation, China tightening and sovereign debt risks remain uncertain. Breadth was very negative on the day at 2:1. Stocks are now 7.7% off their highs and down 5.3% for the year.
From Daily Futures:
U.S. Economy
U.S. Treasury Secretary Geithner told ABC News yesterday that the U.S. is in no danger of losing its Aaa credit rating, even with the current projections of high budget deficits. He added that the government plans to reduce the deficits after the labor market recovers. The March U.S. T-bonds closed down 18.32nds at 118.30/32nds.
Grains and Cotton
Overall, grains were steady to higher ahead of tomorrow’s monthly USDA estimates. March soybeans closed up 16 cents at $9.295.
The USDA said that last week’s export inspections of:
Corn totaled 27.1 million bushels, down 11% from a year ago.
Soybeans totaled 39.6 million bushels, down 18% from a year ago.
Wheat totaled 16.9 million bushels, down 12% from a year ago.
The National Cotton Council said that its survey of growers points to 10.1 million acres of planted cotton this year, up 10% from last year. March cotton closed up 2.54 cents at 69.16, rebounding strong from Friday’s big drop, ahead of tomorrow’s USDA estimates.
Livestock
April hogs closed up 2.05 cents at 68.77 after this weekend’s winter storm hit the mid-Atlantic states. Another one is expected to develop in the central U.S. this week.
Lumber
Canada’s Mortgage and Housing Corp. said that housing starts were at an annual rate of 186,300 in January, up 5.8% from December’s pace and more than expected. May lumber ended down $2.00 at $289.00.
Sugar
According to Agrimoney.com, the private firm, Kingsman, increased its estimate of the 2009-2010 world production deficit from 8.3 to 11.9 million tons. March sugar closed up .43 at 26.60.
Orange juice
Temperatures in central Florida are expected to dip into the 30’s on Wednesday, but no significant freezing is expected. March orange juice was up .30 at $1.3425.
Energies
Yesterday’s 6 to 10 day forecast from the National Weather Service expects below average temperatures for the eastern half of the U.S. Over the weekend, the mid-Atlantic states received heavy snow. March natural gas fell 11.4 cents to $5.401.
April crude oil ended up .77 at $72.29 after Iran announced that it would begin enriching its uranium to 20%, starting tomorrow. The move is seen as a threat that puts Iran closer to having weapons-grade uranium.
Metals
April gold closed up $13.40 at $1,066.20, trying to bounce back from last week’s sell-off and dollar rally.
Currencies
The Bank of Japan said that bank lending was down 1.5% in January from a year ago, the largest annual decline in over four years. The March yen closed down .0023 at 1.1193.
India’s government said that it expects real GDP to be up 7.2% in 2009-2010.
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.