As tensions mount in Syria’s civil war, with the situation looking like the United States will inevitably intervene, the global markets reacted negatively, as was expected. A miss by the S&P/Case-Shiller Home Price Index also added to the day’s bearishness and thus, despite beats by the Consumer Confidence report and Richmond Fed manufacturing index, the major indices plummeted deep in the red by the close.
While some attention was given to the economic data points mentioned above, the main development that many investors and traders focused on today was the ongoing situation in Syria. This situation caused a “risk-off” environment in the markets, where “safer” assets like Treasuries and gold are rallied, while stocks sold off. Unfortunately for investors, events like military conflicts come out of the blue and tend to receive swift negative reactions in the markets. Nonetheless, you shouldn’t let the cloud of war hanging over the markets lead you to make rash and emotional investing decisions. There might be down days here and there as the military conflicts roll on, but over the long-term your core investments should remain intact.
In other unfortunate news, it was reported yesterday that Treasury Secretary Jack Lew sent a letter to Congress saying that the U.S. would hit the debt ceiling by mid-October. What this means is that there will likely be another battle between policymakers to once again raise the debt ceiling. This just adds to the number of headwinds already facing the markets heading into September. This is just another situation that investors need to remember is out of our control. Thus, it shouldn’t lead us to micromanage our portfolio to maneuver any volatility. The situation in Washington, whether it’s the budget battle or debt ceiling debate, will play itself out, so try to sit back and prevent your emotions from making unsound investing decisions.Market Movers
Now for some specific stock news: earnings from Tiffany & Co. (TIF), Sanderson Farms (SAFM), Bank of Nova Scotia (BNS) and Brown Shoe Company (BWS) disappointed investors, which caused their respective stocks to sell off in the day’s trading. In contrast, shares of DSW Inc. (DSW) rallied after better-than-expected earnings. Bank of Montreal (BMO) shares were mostly unchanged today, despite beating analysts’ earnings estimates.
Be sure to check the Dividend Daily for all the latest earnings reports, analyst moves, and much more.Should Gold Be Your Safe Haven?
Since gold hit its one-year low at the end of June, the yellow metal has rallied back strongly over the last nine weeks. Now, with the potential worries going forward regarding the situation in Syria and the Middle East, gold got a pop in action today as investors flocked into the supposedly safe haven precious metal. For some investors, it may seem appealing to join in on this bounce, especially if a crisis is right around the corner; however, for investors with a long-term focus, attempting to cash in on a gold rally could end up being a losing proposition.
Yes, gold has had a good couple of months and may be in for some more price appreciation ahead, but it is still well down from its bull market highs in 2011. Moreover, gold is at the mercy of supply and demand; there are no fundamentals or earnings to assess to determine whether growth is in its future and if a new high is attainable. And most importantly, gold doesn’t provide investors with consistent dividend payouts that we can utilize to build our wealth. So, while gold might seem like a good short-term hedge with a potential military conflict on the horizon, it most likely won’t help you build your wealth over the long term.
Thanks for reading everyone! Be sure to check us out on Twitter @dividenddotcom. We will see you tomorrow.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Press Release Service provided by PRConnect.
Stock quotes supplied by Telekurs USA
Postage Rates Bots go here