It has been a bit of a lackluster week; the FIFA World Cup has provided way more excitement for more people than the financial markets. Stocks fell at the start of the week but the selling didn’t materialize into a proper correction and equity indices managed to regain their poise towards the end of the week. The dollar also eased back towards the end of the week after trending higher initially in what has been a quiet week for data.
Export inspections Thursday morning in corn came in at 1,511,746 metric tons, a strong number that offered little support to the market. Attention this week will be on weather and Friday’s USDA report which will give us an updated look at quarterly stocks and planted acres.
Major U.S. benchmarks pared early losses yesterday to notch a solid session to which they extended gains overnight. The S&P traded to a high of 2737.50 and is being led by the banks after yesterday’s post-bell stress test results; pre-market the XLF is up nearly 1% and JP Morgan and Bank of America are both up more than 1.5%.
There have been some interesting moves in the markets this morning, in what is the last trading day of the week and month. But it remains to be seen whether there will be further follow-through in these moves once we head into the U.S. session. After all, it has been a very choppy week and we wouldn’t be surprised if the markets were to reverse, especially the equities.
With the Trump Administration working toward zero Iranian exports by November, Libyan oil supplies at risk due to clashes with militias, and crashing supply from Venezuela, reports of tightening U.S. supply is keeping oil on edge. Crude oil price continued its drive, hitting $74 a barrel for the first time since that fateful OPEC meeting in November 2014.
After a strong start to this week’s trade, the U.S. dollar is on the back foot on the final trading day of the week, month, and quarter. The proximate cause for the buck’s weakness is good news overseas: specifically, the EU countries reached an agreement on migration, while the UK’s Q1 GDP was revised up by 10 basis points to 0.2% quarter-over-quarter.
Modern wars are fought with precision tactics and tools like drones, targeted strikes, and heavy reconnaissance to identify where the enemy is weakest. But, as any military historian will tell you, wars used to involve far more blunt tools, like catapults and trebuchets, to inflict maximum damage on the enemy; friendly fire be damned.