If the Russian army was as trigger happy as the typical trader, tensions might not be easing today in Ukraine. Traders of all stripes showed how they're still motivated by fear, shooting first and asking questions later in knee-jerk reaction to events on the ground in the Black Sea region.
It's too soon to tell whether that original caution might have been prudent. But those who got out Monday are getting back in today at a worse price in any event.
Monday's spikes provided plenty of opportunities. In the debt market, interest rates fell to their lowest level since October, giving borrowers a chance to lock in cheaper costs on longer term loans. Stocks also proved a relative bargain, especially with the S&P 500 Index moving to fresh all-time highs intra-day today.
Still, stocks look somewhat top-heavy right now, moving up toward the top of my first-quarter selling range. Higher prices could still be justified down the road if earnings for the rest of 2014 match guidance. For that to happen, companies must overcome headwinds from the harsh winter, which hurt retail sales. Russia's move against Ukraine hasn't done already beleaguered emerging markets any favors either, which could make for another headwind to fight.
The Russian ruble has lost 14% of its value since October against the dollar, and it's not the only currency suffering. The Brazilian real is also weak, which makes it easier for farmers there to expand.
The Chinese Yuan is also weak this week, reflecting the desire of the central bank there to discourage speculation. The currency has done little but strengthen since China began floating it in a narrow range in 2005 against the dollar.
The big winner again this week were commodities. Gold and crude oil soared along with grain on the Ukraine story. They're easing now, but not before the CRB Index soared to a 16-month high, rewarding investors who flocked back to commodities after a disastrous year for hard assets in 2013.
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Senior Editor Bryce Knorr first joined Farm Futures Magazine in 1987. In addition to analyzing and writing about the commodity markets, he is a former futures introducing broker and is a registered Commodity Trading Advisor. He conducts Farm Futures exclusive surveys on acreage, production and farm management issues and is one of the analysts regularly contracted by business wire services before major USDA crop reports. Besides the Morning Call on www.FarmFutures.com he writes weekly reviews for corn, soybeans, and wheat that include selling price targets, charts and seasonal trends. His other weekly reviews on basis, energy, fertilizer and financial markets and feature price forecasts for key farm crop inputs. A journalist with 38 years of experience, he received the Master Writers Award from the American Agricultural Editors Association.
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