Wall Street started the week once again in red territory as investors remain reluctant to jump back into the equity markets given the ongoing uncertainty surrounding the debt-ceiling controversy at home. Gold continues to charge higher as the precious metal opened above $1,600 an ounce on Monday morning.
Earnings season is well underway and so far corporate performance results have been mostly surprises to the upside. Nonetheless, equity markets have broadly declined since the beginning of the week as investors remain fearful of the consequences likely to arise if Congress doesn’t act quick and come up with a plan. Gold surged to new all-time highs on Wednesday, with futures prices hitting $1,631 an ounce, as several rating agencies have issued warnings that failure to raise the debt ceiling would trigger a downgrade of U.S. government debt. Crude oil on the other hand has drifted lower since Monday, and futures prices dropped over 2% on Wednesday, dropping down to underneath $97.50 a barrel.
This week’s recommendations have struggled a bit to gain traction given the pressure on equity markets from overarching debt-ceiling concerns and ongoing financial woes overseas in the Eurozone.
Checking In: Trading Ideas
This week, our trading ideas included long positions in a domestic sector fund and a commodity producer ETF. We also established a defensive position in the currency markets in anticipation of continuing market volatility. Our expectations have unfortunately proven correct, as Wall Street largely remains plagued with uncertainty, putting our bullish picks in a rut for the first half of the trading week.
Trading Idea #1: Long KIE
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