Politics boost major stock index values

For the first time in recent memory equity prices took a strong nudge on account of political risk on Tuesday. Stock market averages raced ahead with drug makers and health insurers bouncing as the race for the vacant Massachusetts seat left vacant after the death of Senator Ted Kennedy looked like it might pass across the political divide. Investors were fast to discount the longevity of profits for some companies on the view that the loss of a key Democrat seat in the Senate might thwart the ability of President Obama’s social reform program. 

The S&P 500 index casually strolled forward all day closing at its best point of the rally in place for 10 months now. Investors turned to cash flow analyses to prove that stocks were the cheapest they’ve been in some time.

Meanwhile the ugly situation brewing in the Eurozone seems to be without end. Just one week ago it appeared that European ministers had had the last word of plain speak in telling top officials in Athens that they would be left to fester if they didn’t take on the responsibility of mending their own fiscal problems. And as the Greek finance minister stepped up to do so, investors are left questioning whether the Greek plan will be as easy to implement as it looks on paper.

So the dollar stole second base from the single euro currency rising to its highest point so far this year. Still that wasn’t enough to stall several commodity prices from rebounding from last week’s lowest points after investors worried that Chinese measures to stem growth through higher interest rates would reduce demand. Gold, silver and copper prices continued to show signs of support from real demand, while sugar, cocoa and coffee also clawed their way back towards recent peaks.

But farm prices couldn’t maintain a positive direction, try as they might. While corn and soybeans spent some of Tuesday in the black, by the end of the day they were rolling down the hills just like wheat prices. In this week’s issue of Jurojin Weekly, we’re putting our trading skills to the test with a brand new wheat futures trade to fit the bill

John Bull
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