June 22, 2018

Stocks gapped up at the open (Dow +167 pts; SPX +.4%). We’ll see if it holds. At the moment, the energy sector is leading, up 3% in the wake of an OPEC meeting. Telecoms and materials are also up over 1%. Tech, on the other hand, is lagging (-.4%). It seems investors didn’t like earnings announcements from Red Hat (RHT), Oracle (ORCL) and Micron (MU) earlier this week. European stock markets are poised to close up about 1% and Asia was mixed overnight. Trade war jitters have hit China’s stock market especially hard. The Shanghai and Shenzhen Composites are down 12-16% this year, around 2-year lows. The US dollar has strengthened against a basket of foreign currencies as a result of trade concerns. Not surprisingly, most commodity prices have fallen. Gold, iron ore, and copper are down on the year. Oil is still up though; WTI crude oil shot back up to $68/barrel (see below). Bonds are modestly higher in price, lower in yield today. The 5-year Treasury yield ticked down to 2.76% and the 10-year yield is hovering around 2.90%. The yield curve continues to flatten; the difference between the yields on the 2-year and 10-year Treasury bonds is down to just .36%. It’s hard to escape the conclusion that the stock & bond markets are telling us two different stories about the future. Stocks are worried about rising inflation but believe the economy is on a firm footing. Bonds, however, are telling us that inflation and growth are not going to accelerate.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

June 19, 2018

Stocks opened lower this morning (Dow -281 pts; SPX -.55%) mostly on trade war jitters. Industrials and materials—two sectors heavily influenced by global trade—are down about 2%; tech is down about 1.1%. The defensives—consumer staples, utilities, telecom—are trading higher in today’s mini sector rotation. The VIX Index jumped up to nearly 14 and VIX July futures are trading up around 14.4. European stock markets look to close down about 1% and Asia was very negative overnight. The Shanghai Composite Index fell 3.8% and is now down over 11% year-to-date. Most commodities—including gold—are down today. WTI crude oil fell 1.4% to $64.90/barrel on rumors that Saudi Arabia and Russia would like to remove OPEC oil production limits. Of course, we know that oil prices are routinely manipulated day-to-day by rumors and we know that Saudi would much rather have oil up around $80 than down around $60. Bonds are trading higher this morning in response to the stock selloff. The 5-year and 10-year Treasury yields dipped to 2.76% and 2.89%, respectively. 


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

June 15, 2018

Stocks gapped down at the open (Dow -216 pts; SPX -.4%) on renewed trade war fears. The hardest-hit sectors are energy (-1.8%), industrials (-.8%,) and materials (-1.1%). The poster children for trade jitters, Boeing and Caterpillar, are down over 2% in early trading. Real estate, consumer staples and utilities are the only sectors in the green. The VIX Index jumped to 12.5. European markets are poised to close down about .5%. WTI crude oil is down 3% to trade around $64.60/barrel. Most other commodities are lower as well (gold -1.7%; copper -2.9%; ag products -1%). Bonds are responding positively. The 5-year and 10-year Treasury yields backed down to 2.79% and 2.92%, respectively.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

June 14, 2018

The major stock market averages gapped up at the open, but quickly faded. The Dow is currently flat and the SPX is up .25%. The Nasdaq is up .7%. The financial sector is down nearly 1% despite the Federal Reserve’s rate hike yesterday (see below). That’s quite a surprise. Utilities, telecom and real estate sectors, on the other hand, are up about 1% in early trading despite better economic data. European stock markets are surging today after the European Central Bank’s policy meeting (see below). The dollar is stronger today against a basket of foreign currencies and not surprisingly, commodities are mostly trading lower. WTI crude oil is down modestly to $66.50/barrel. Bonds are trading up modestly. The 5-year Treasury yield is pretty much unchanged at 2.82% but the 10-year Treasury yield ticked down to 2.95%. So the yield curve is flatter today. This is not at all what I expected to see this morning. What we have today is a tug-of-war between various powerful forces in the market. CNBC’s Rick Santelli characterized this market action as “incongruent.”


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

June 13, 2018

Stocks opened modestly higher (Dow +12 pts; SPX +.1%). Telecoms are down over 3% in early trading as a result of yesterday’s court decision on AT&T (sell below). That’s a one-time hit. But retailers, semiconductors and healthcare stocks are in the green. The VIX Index continues to slide toward 12 and VIX July futures are down around 13.7. It’s safe to say the recent stock market correction has been resolved even though we’re not yet back to all-time highs. Commodities are mostly higher today (gold, copper, iron ore, oil). WTI crude oil is hovering around 66.50/barrel. Bonds are ever so slightly higher on the day. The 5-year and 10-year Treasury yields are hovering around 2.81% and 2.95%, respectively. The Federal Reserve’s monthly policy meeting will wrap up today, however, so you can expect some interest rate volatility.


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.