Tuesday, July 30, 2013

Russia Upsets The Potash Cart

The market is a bit higher this morning after yesterday's mild pullback.  The big dislocation in the markets today is in the potash market, which is an agricultural fertilizer product.  Russia's OAO Uralkali withdrew from the potash cartel and that has the stocks of the other players reeling.  POT and MOS are taking it on the chin, as one analyst said Russia leaving the cartel is like Saudi Arabia leaving OPEC.

In economic news, consumer confidence for July fell back to 80.3 from 82.1 the prior month.

Earnings reports continue to come in and this morning I am seeing more stock rise on their earnings reports than fall.  To wit:

Stocks rising on earnings: HLF, MRK, PFE, BYD, MGAM, CMI, AGNC, ECL, IPGP, NEE, AMG, OSK, WU, ROK

Stocks falling on earnings: DDD, APC, COH, HMA

Asian markets were mostly higher, led by a rebound in Japan despite the govt. tempering their expectations for 2014 GDP growth.  Also, India was lower after the Reserve Bank held its key interest rate unchanged at 7.25% and lowered its own GDP forecast to 5.5% from 5.7%.  In China, the PBOC injected 17 billion yuan into the markets to help ease rising SHIBOR rates.

Most European markets are higher today.  The IMF confirmed the next tranche of aid to Greece for 1.7B euros.

Most commodities are lower.  Oil prices are lower to $103.30.  Gold prices are down near $1322.  Silver and copper prices are lower as well. 

The 10-year yield is up fractionally near 2.59%.  Ditto the VIX which is hovering near 13.50 still.

Trading comment: Yesterday's market decline was another benign pullback.  We could see some buying as we get towards the end of month/beginning of new month simply due to fund flows, etc.  Other than that markets continue to hold up well and shrug off most of the bad news that hits the headlines.  No one would have been too surprised to see a deeper pullback from the recent highs in the market, but so far the market has merely been moving sideways.  The market could be lulling investors into a sense of complacency, but so far there have been no catalysts that have gained any traction on the downside.


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