Equities And Commodities Rally As Russian Exercises End
Stock indices on both sides of the Atlantic gained Monday, after the Russian Air Force completed military exercises near its Ukrainian border without incident.
Monday, August 11, 2014 - 00:00
A buildup of troops and military equipment along that frontier previously drove fears of escalating conflict between Russia and the former Soviet republic.
The FTSEurofirst 300 Index climbed 1.14% to 1,321 points, while the S&P 500 rose 0.46% to 1,940.31 points by 10 a.m. EST.
"We’re seeing a bit of a bounce today after a weak week," Veronika Pechlaner of Ashburton Limited told Bloomberg. "With the Russia-Ukraine situation, it's going to be a step-by-step process, hopefully in the right direction. What you want to see are no further sanctions, certainly no more military action and potentially some news on the inquiry into the plane that came down."
However, markets overall will remain sensitive to rising conflicts across the globe, from the spread of ISIS in the Middle East to the exchange of sanctions between Russia and NATO. Renewed tensions in Ukraine or more disruptions in the Middle East might well set traders running back toward safe haven investments.
Industrial commodities also see gains
Industrial commodities such as copper also rose on Monday, with the three-month futures contracts on the London Metal Exchange up 0.2% to $7,005 per ton, Reuters reported. China's economy also helped buoy the metal's price, as export figures from last week indicated rising production and thus demand for copper, which is used in a wide variety of construction and industrial applications.
"The data from China has been improving for a while now, and the gradual loosening of monetary conditions has been supportive to growth," Natixis head of commodity research Nic Brown told Reuters.
Binary options may capture gains and hedge losses
Overall, the political and economic situations in several key conflict zones remain delicate around the world. Traders must tread carefully in markets sensitive to fast-developing situations with potential military implications.
With the use of Nadex binary options, investors may be able to hedge their portfolios and offset some potential losses if trends reverse quickly. For instance, a position heavy on safe-haven investments like US Treasuries and gold might suffer today, as the markets seek out higher-returning alternatives.
Selling binary options in commodities like gold or silver can deliver profits when those markets fall. If those markets do end up rising, the downside risk is fixed and limited by the structure of the contracts on Nadex's exchange
Conversely, one might buy binary options in domestic or foreign stock indices, which will pay out when equity sentiments are strong, as they are today.
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