The major stock indices opened the session well into negative territory after remarks from mining giant BHP Billiton ($BHP) about flattening Chinese growth. This led to declines in Asia and Europe and that spilled over to the US as investors backed away from the “risk on” trade.
The question I ask myself is flat demand for iron ore by the Chinese really that bad? It is not as if BHP came out and said demand was decreasing dramatically or that it was the end of the iron ore bull market. The simply said demand is flattening, that tells me it will be the same as last year, which was a good number. This is a story to keep an eye on.
The Market Vectors Steel ETF ($SLX) was down 2.1% after rallying the last five sessions.
Cotton Near 2-Year Low
The price of cotton continues to fall and is now near a 2-year low as the US government estimates that stockpiles will expand by 32% after record crops in several key countries. The bad news is that the iPath Cotton ETN ($BAL) is down over 50% from the 2011 high. The good news is that the cost for some retailers and apparel makers will fall with the price of cotton.
Oracle Beats Earnings
After the bell major software play, Oracle ($ORCL), beat earnings and the stock is rallying 2.8%, adding to its 1.1% gain it had during the normal trading hours. Within technology one of my favorite sectors is software based on the concept the companies can help lower costs and increase production as well as the ties to the cloud computing craze. The iShares Software ETF ($IGV) lost 0.9% today, but is up 20% year-to-date.
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