|Dow||-116.61 to 17,055.77|
|S&P 500||-11.52 to 1,982.77|
|Nasdaq||-19.00 to 4,508.69|
|10-YR Yield||-0.036 to 2.535%|
|Gold||+$5.10 to $1,226.00|
|Crude Oil||+$0.31 to $90.42|
War is on in the Middle East!
I say that because the battle against ISIS – and the simmering conflict between Israel and its Arab neighbors – just expanded to Syria!
==> The U.S. dropped bombs, flew drones, and fired off waves of cruise missiles at targets throughout Syria. A total of 14 airstrikes struck training and storage facilities, vehicles, and other targets. Some 47 cruise missiles from ships in the Red Sea and Persian Gulf rained fire down on other locations.
==> ISIS wasn’t the only group the U.S. attacked, either. It also struck the Khorasan Group, an al-Qaeda affiliated group the U.S. accuses of planning attacks against the U.S. or U.S. interests overseas. ISIS vowed quickly that the “attacks will be answered.”
==> The attacks included unspecified contributions from several Arab nations, including Jordan, Saudi Arabia, Bahrain, Qatar and the United Arab Emirates. That means even more countries are getting dragged into the regional conflict.
==> Even Israel jumped into the fray — shooting a Syrian air force jet out of the sky over the contested Golan Heights region. That’s the first time we’ve seen that happen since.
|U.S. bombs battered sights inside of Syria, intensifying the fight against ISIS.|
Throughout the spreading conflict, the prices of crude oil and gold have remained remarkably tame. The key reason? Weaker-than-expected economic data out of China, which has kept a lid on commodities overall.
But that started to change overnight. Both oil and gold caught a bid as explosions echoed throughout the deserts and towns of Syria and Iraq. Could this mark the return of the “geopolitical bid” that has been missing so far? Absolutely!
I would keep a close eye on oil and copper in particular to see whether the bounce can gather steam. If so, it might be time to get more aggressive with beaten-down energy plays.
At the same time, concern over the strength of the global economy outside of the U.S. is putting pressure on the broad averages. Smaller capitalization stocks have been lagging, M&A news like we got yesterday has been ignored, and the S&P 500 continues to struggle with the 2,000 level.
|“Could this mark the return of the ‘geopolitical bid’ that has been missing so far?”|
Me? I continue to focus on the select, domestically oriented, sector bull markets that have done so well for me over the past couple of years. And I’ve been avoiding European stocks and the European currency, helping my readers dodge the worst of the recent carnage.
We haven’t broken any significant levels of technical support yet. So I’m going to stick to that game plan until I see signs that we need to do something more radical.
Still, I want to know what YOU think. Is the recent weakness a sign of something worse to come for the broad averages? Are you battening down the hatches in your personal portfolio? Or is it time to get back into some of the energy and oil stocks that have been beaten down – as well as bottom fish in other sectors?
Hop on down to the comment section below to share your thoughts with your fellow investor.
|Our Readers Speak|
It seems like my column on eating healthier — and profiting from the trend of shoppers shifting toward organic and natural food producers and retailers – touched a nerve. And I really appreciate your valuable feedback.
Reader Barb said: “I shop at Fresh Market and Whole Foods in Wellington, Florida for ALL my fresh produce, meat plus specialty items. I use Publix for all the rest. Publix cannot match FM and WF when it comes to both freshness and organic choices.”
Reader Diana added: “Used to have a big garden but now I buy organic fruits and vegetables and hormone-free meat. I make everything from scratch. I can’t afford to buy organic for everything so pick & choose.
“Our Safeway & Fry’s chain in AZ is adding more organic every day. Also love the farmer’s market and several smaller organic stores we have. Don’t count out your large chains. I talk with the meat & general managers almost every time I shop, and they order what I want.”
Finally, Reader Caine said: “The big food producers (‘Big Food’) are continually attempting to co-opt the organic and wholesome brand segment through acquisitions, but these acquisitions often lead to deterioration of the organic quality of the product.
“Worse still, is that many such organic brands are now owned by Big Food, which pushes huge amounts of money toward anti-organic initiatives. In California alone, Big Food spent over $40 million to block GMO labeling which is THE organic issue of our time, and narrowly defeated a similar initiative in Washington. So for me, I avoid shopping at any chain that is a member of the Grocery Manufacturer’s Alliance, and I even avoid the organic brands that have been purchased by Big Food because their profits drive anti-organic initiatives.”
Clearly, many of you are trying to improve your health and buy smarter when it comes to food. That can only be good for society as a whole.
And Caine, it’ll be interesting to see how the likes of General Mills and Campbell handle their organic brands. I get the feeling they will bury their corporate logos in the fine print on the bottom of the packaging, or maybe not even slap it on there at all! The goal will be to try and preserve the organic “cred” of the products – and therefore make them more marketable even post-merger.
But will the quality of those products hold up? Or will they cut corners and costs to try to keep shareholders happy? Only time will tell on that one!
Again, this is a great discussion and if you’d like to add to it, definitely swing on down to the Money and Markets comment section below. I’ll do everything I can to answer your questions!
|Other Developments of the Day|
- Lots of merger money may be flowing from Europe to U.S. shores. But their economy certainly isn’t doing us any favors! Both manufacturing and service sector activity slowed in September, according to new readings from Markit Economics. Confidence is also declining, putting renewed pressure on the European Central Bank to ramp up its printing presses even more.
- The United Nations Climate Summit is underway in New York, as is the Clinton Global Initiative. The events include lots of speeches on everything from climate change to the Middle East, as well as announcements of various anti-pollution and pro-democracy programs.
- The Treasury Department took aim at the wave of tax “inversion” mergers we’ve seen in 2014. It is prohibiting so-called “hopscotch” loans used to dodge U.S. taxes, as well as “spin versions” and “skinnying down” – two other techniques used to get around existing rules that affect cross-border acquisitions.
- As a biker, I was discussing this tragic accident with my neighbors last night. I do my best to ride smart – keeping my eyes out for pedestrians, staying in bike lanes when they exist, and following the rules when I ride in street traffic. But there are plenty of other riders (and drivers!) who don’t pay attention or just flout the rules. For the sake of us all, I hope everyone learns to share the road better.
Reminder: You can let me know what you think by putting your comments below.
Until next time,