Stock and Commodities Review

Stocks

Global equities were lower on Monday as traders are worried about the financial conditions of European banks. Stress tests last week revealed that many banks may need to raise additional capital due to falling sovereign debt bond prices. Debt worries were also headlining losses in the US, traders continue to worry about the lack of political agreement for raising the US’s debt ceiling.

As such, financial stocks were the big losers today. Bank of America was lower by 2.8% while Deutsche Bank fell over 3.2%. Overall, the S&P 500 was 0.8% lower while the Dow lost 0.76%, while in Europe the CAC 40 was slightly more than 2.0% lower with the FTSE and DAX both losing 1.55%. Looking ahead, tech stocks will be in the spotlight tomorrow as bellwethers IBM and CSCO both released earnings after the close.

Commodities

With the exception of precious metals commodities were lower across the board. Agricultural and Soft commodities were especially hit hard as cotton fell 2.5%, while Wheat, Corn, and Soybeans were all around 0.5% lower. Cotton prices have fallen over 33% since late June as a drop in export demand has triggered speculators to dump their holdings. Elsewhere, Crude Oil prices down about $1.30 to just below 96.50/barrel.

Losses aside, the big news among commodity traders has been in Gold. The precious metal has risen for ten consecutive sessions as it hit another record high of $1607/oz. Gold has been benefitting as US and European debt problems have led funds towards the relative safety of the metal. Similar, Silver prices were up $1.25 to $40.55/oz as speculative buyers appear to be returning to the metal.