Market Talk

Big sell-off today, and it’s pretty much across markets (of course, the traditional safe havens, Treasurys and the dollar, are having a good day) and we dig into it in today’s Markets Hub.

Keep an eye on both 12000 on the DJIA and 1300 on the S&P 500 today. Those two numbers sit roughly on the uptrend line from August, and if they’re broken, a bigger sell-off could be in the cards. Both levels have been pierced, but are currently holding.

Yesterday we took issue with St Louis Fed President James Bullard’s assertion during a CNBC interview that there was no evidence that QE2 is a factor in jacked-up commodities prices, though he conceded that their relationship should be studied.

Well, study this, Mr. Bullard: today US corn futures close at their highest level since July 2008 at $6.02 a bushel. Nymex Feb crude futures hit their highest close since October 2008, at $89.82 a barrel, and up 6.8% this month. Nymex heating oil at a fresh 2010 high at $2.5164 a gallon. Cotton hits a fresh post-Civil War (yes, that Civil War) high at $1.59 a pound. Comex copper futures settled at an all-time record high at $4.276 a pound.

Now, we’re not saying it’s all because of QE2 and no influence from supply/demand, China, whoever, but come on. All of these different commodities hitting fresh or all-time highs simultaneously?

Meanwhile, an asset class that Fed officials admitted QE2 was, in part, aimed at — stocks — also rose today to fresh two-year highs.

Not a coincidence. Study complete. Good luck at the gasoline pump or grocery store, citizens.

This has to go down as the oddest factoid I’ve ever read. Well, maybe not even, but certainly in as long as I can remember:

Cotton futures hit an all-time high overnight but quickly backed off and fell the maximum allowable amount as funds booked their profits. Prices hit $1.1980 a pound shortly after the market opened, the highest point since the Civil War.

Since the Civil War? The Civil War? Then why don’t my Levi’s cost like two dollars in the Sears Roebuck catalog?