Today saw another busy trading day, with most major equities finishing down on continued worries that Congress will not agree on a debt plan in time. The deadline to raise the debt ceiling is set for August 2nd, leaving little time for major snags or debates among our legislators. Aside from these fears, the market saw Apple (AAPL) shares touch $400 for the first time ever, much to the delight of the wealth of investors with shares in the company. Today also saw the busiest week for IPO pricing since 2007, with industries represented everywhere from “food services, biotech, energy, and defense to even farming in Uruguay” writes CNBC.
One of the biggest commodity winners on the day was gold, which finished above $1,610 per ounce, setting a new record. Gold demand was spurred by yet another day with no debt deal in the U.S., leaving this metal as a safe haven for investors who fear that a lack of a plan will crush U.S. bonds and slam equities. (Investors who disagree would do well to look at an ETF that tracks U.S. bonds such as BND.) Another helper on the day was Moody’s downgrade of Greece; the nation was cut three notches by the ratings agency as the rescue plan seems to have done little for investor or institutional confidence. High trading volume and its safe haven qualities led to gold gaining 0.8% on the day, settling at roughly the $1,614/oz. mark.
On the other side of things, one of the worst performing commodities on the day was cotton. The fluffy commodity has long been known for its erratic price swings, but today’s poor performance came from a rare speech from Joe Nicosia, chief executive of the world’s largest cotton merchant, Allenberg Cotton. Nicosia warned that cotton prices are currently in free-fall, and while they are incredibly low for the moment, he expects the next year to be filled with volatility and major price swings. Another factor combining to hurt cotton prices came from India, one of the largest cotton producing countries in the world, whose cotton output is now expected to beat analyst predictions, putting downward pressure on futures. In total, cotton futures sank 1.9% on the day, finishing the session below the 96.5 mark [see also Ultimate Guide To Cotton Investing].
Disclosure: Charts courtesy of Barchart. No positions at time of writing.