July 21st 2014 – Ukraine and Gaza Bring Volatility

Market View:

It has been an interesting few days in the markets, down then up, then down again today.  My overall feeling is that we will be sideways for a short while as the market decides if the risks in the Ukraine and Gaza escalate and become bigger economic obstacles.

I feel uncomfortable talking about the recent troubles as being contained, however, from a markets point of view the buyers are not yet exhausted, even in the face of what has happened in the last few trading days around the world.  It was a good recovery today after President Obama outlined his position on Russia, once again showing the buoyancy that is still present.

Market News:

U.S. stocks fell on Monday as global disapproval of Russian President Vladimir Putin increased after the downing of a passenger plane in Ukraine and amid international calls for a truce in the Israeli-Palestinian conflict.

In eastern Ukraine, a train carrying the remains of most of the 298 victims of the Malaysia Airlines disaster left the site after Malaysia’s prime minister reached an accord with the pro-Russian separatists controlling the area.

In the Gaza Strip, the Palestinian death toll reportedly climbed above 500 and seven Israeli soldiers died on Monday, following the deaths of 13 soldiers on Sunday, with the fighting continuing despite appeals for a ceasefire.

Stocks came off session lows, however, with the Dow regaining its footing above 17,000, after President Barack Obama said in a nationally televised statement that the costs to Russia would increase should it fail to find a diplomatic solution to the crisis in Ukraine, but stopped short of further sanctions.

Exports represent about 40 percent of the German economy, and 10 percent of German export companies sell to Russia, while three-quarters of those companies have 25 percent of their exports going to Russia, Peter Boockvar, chief market analyst at the Lindsey Group, calculated in emailed research.

Russia is the largest oil, gas, uranium and coal importer to the European Union, according to the European Commission.

Tuesday:

Earnings: Apple, Coca-Cola, McDonald’s, Microsoft, United Technologies, Verizon, Comcast, Travelers, Dupont, Credit Suisse, Lockheed Martin, Electronic Arts, Xilinx, State Street, Domino’s Pizza, Kimberly Clark, VMWare, Juniper Networks, Harley Davidson

8:30 a.m. CPI

9:00 a.m. FHFA HPI

10:00 a.m. Existing-home sales

News Sources:  CNBC and CNN Money