10-year Treasury Note Yield

INCREASING PRESSURE ON CHINA

The major stock market averages gapped up at the open, but quickly faded. The Dow is currently up 47 pts and the SPX is up .29%. Energy is the best performing sector, up 1.1% on higher oil prices. And unlike yesterday, cyclical sectors are faring well but defensives are in the red. There’s just no discernible trend in the market this week. European stock markets closed roughly flat this morning and most of Asia was lower overnight. Hong Kong protests over a proposed extradition law are gaining momentum and have grown violent. Bloomberg reports hundreds of thousands of people are involved. Hong Kong is officially autonomous but China’s communist party exercises effective control. Commodities are trading sharply higher, led by oil. WTI crude oil climbed back to nearly $53/barrel after terror attacks—likely initiated by Iran—on two oil tankers in the Strait Hormuz. Bonds are again moving higher in price, lower in yield. The 10-year Treasury yield is hovering around 2.10%.


*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.

CAUTIOUS OPTIMISM FOR THE MOMENT

Stocks opened modestly higher this morning, edging closer to April highs. The Dow is currently up 58 pts and the SPX is flat. Banks, retailers, semiconductors and energy are all up about .5% in early trading. On the other hand, utilities, industrials and healthcare are down. VIX July futures are trading around 17, suggesting traders don’t expect a near-term volatility spike. Expected Treasury bond market volatility has collapsed this month as well. Commodities are mostly higher today, save gold. WTI crude oil bounced back to $53.50/barrel after bottoming around $51.70 a week ago. The bond market is mixed today. Treasuries are selling off a bit after a monster 6-week run. The 10-year Treasury yield notched up to 2.16%. Corporates are faring better in early trading, with the SPDR High Yield Bond ETF (JNK) up about .3%.


*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.

MEXICO TRADE RELIEF

Stocks opened higher today after US & Mexican negotiators reached a tentative arrangement to avoid new trade tariffs. The Dow is currently up 174 pts and the SPX is up 1%. Consumer discretionary, financials and technology sectors are all up 1.5% or more in early trading. The VIX Index—a common gauge of fear among traders—sank back to 16. European stock markets closed up by about .5% and most Asian markets were up over 1% last night. In the wake of the Mexico headline, the dollar strengthened and gold & bonds fell. WTI crude oil is trading flat just under $54/barrel. Most areas of the bond market are down today, except for junk bonds. The 10-year Treasury yield climbed back to 2.14%.


*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.

BAD NEWS IS GOOD NEWS

Stocks surged higher today in spite of a weak jobs report. The Dow is currently up 299 points and the SPX is up 1.1%. The best performing sectors are tech (+2%), consumer discretionary (+1.5%) and communications services (+1.4%). Financials is the lone sector in the red—bank stocks are down on lower interest rates. The VIX Index is up slightly to trade around 16. European stock markets closed up about 1% and Most of Asia was higher overnight. Commodities are mixed. WTI crude oil rebounded to $54/barrel after taking a massive beating over the last six weeks. The bond market is rejoicing this morning on falling interest rates. Treasuries are up across the board, and even junk bonds are rallying. The 10-year Treasury yield dipped to 2.09% and is now at levels last seen in September 2017.


*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.

RELIEF RALLY

Stocks opened higher today on some ever-so-slightly encouraging trade headlines. The Dow is currently up 390 points and the SPX is up 1.5%. The best performing sectors—financials and tech—are up over 2% in early trading. Real estate and utilities are in the red. The VIX Index sank back to 17 and somehow traders are in the mood to buy stocks, saying we’re “oversold.” European markets closed up by about .5% to 1%. Commodities are mostly trading higher, save gold. WTI crude oil fell at the open but recovered to $53.30/barrel. The bond market is broadly lower today. The 10-year Treasury note yield rebounded to 2.14% this morning after falling to a 20-month low. By the way, 2019’s downshift in bond rates and inflation have stoked speculation that the Federal Reserve will be cutting its policy short-term interest rate before long. Fed officials are obviously noncommittal but Chair Jerome Powell said in a speech today that the Fed will “act as appropriate to sustain the expansion.” That’s exactly what investors want to hear.


*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.

TRADE FRICTION TAKING A TOLL

The major stock market averages opened lower again today on trade tensions (Dow -278 pts; SPX -.9%). All eleven market sectors are down, led by Energy, healthcare, consumer discretionary, and communications (all down about 1%). European stock markets closed down over 1% as well, and most Asian markets closed lower last night. The one exception seems to have been the Shanghai Composite, which closed slightly higher on the session. Commodities are mixed today. Corn futures surged as flooding threatened crops. Copper rose .9% today after falling about 8% so far this month. WTI crude oil fell 2.7% to trade around $57.50/barrel. Bonds are trading mostly higher, especially safe-haven Treasuries. The 10-year Treasury yield fell to its lowest level since September 2017.


*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.

NOTHING TO SEE HERE, CHECK BACK TOMORROW

Stocks fell at the open this morning but quickly recovered. The Dow and SPX are currently flat. Defensive, interest rate sensitive sectors (utilities, real estate) are down in early trading. The energy sector, on the other hand, is up over 1.8% on higher oil prices. Trade volume is pretty light coming off of a holiday weekend. European markets are still closed for Easter. The stock market looks kind of tired after a huge recovery rally in the first quarter. In other words, don’t expect a lot of excitement today. Earnings will provide plenty of excitement later this week. WTI crude oil shot up to $65.50/barrel, the highest since the end of October last year. That’s a direct result of the Trump Administration saying Iran’s trade sanction exemption will expire on May 2. A White House statement said the decision “is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue.” Bonds are trading a bit lower as yields tick higher. The 10-year Treasury yield is back up to 2.58%. The “yield curve” (that is, the difference between the 10-year and 2-year rates) is still pretty narrow and fragile. In fact, the spread is just .19% and has been in the range of .10% and .20% for the last 5 months. Should it break convincingly above .20%, that will likely be viewed as a bullish signal for traders.


*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.

RETAIL SALES REBOUND

Stocks opened higher this morning (Dow +100 pts; SPX +.13%). Real estate and utilities are catching a bid after a rough week. Industrials are also in the green after Honeywell’s (HON) earnings report. On the other hand, healthcare stocks continue to slide due to political risk. Popular health insurer UnitedHealth (UNH) is down 27% from its December high. Commodities are mixed; copper continues to climb (+1.4%) but oil and iron ore are flat. WTI crude oil is hovering around $63.60/barrel. Bonds are trading higher today as yields tick lower. The 10-year Treasury yield fell back to 2.56%.


*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.

FOCUS ON INFLATION & THE FED

Stocks opened mixed this morning (Dow -13 pts; SPX +.2%, Nasdaq +.5%). The best performing groups in early trading are semiconductors and biotechs, both up about 1%. Banks are being dragged down by the theatrics of congressional testimony by major bank CEOs today. Retailers and industrials are also down a bit. The dollar is stronger against a basket of foreign currencies after the European Central Bank (ECB) reiterated warnings over slower economic growth and said it plans no interest rate hikes in the foreseeable future. WTI crude oil bounced back toward $64.20/barrel today despite the stronger dollar. Bonds are trading higher as well. The 10-year US Treasury yield backed down to 2.4% after today’s economic reports (see below). The iShares 20+ Year Treasury Bond ETF (TLT) is up .27% and the iShares Investment Grade Corporate Bond ETF (LQD) is up .3%.


*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.

COOLER HEADS ARE PREVAILING

Stocks opened sharply higher today, recovering from last week’s dip. The Dow is currently up 265 pts and the SPX is up .9%. All eleven major market sectors are the in green, led by energy (+1.7%) and tech (+1.3%). European stock markets are poised to close roughly .5% higher, and most of Asia was up overnight. Commodities are moving with stocks. WTI crude oil climbed back to $60/barrel. Most of today’s stock rally is owed to the fact that bonds are finally selling off. Investors have fretted about the fact that Treasury bond yields have fallen back to 14-month lows, suggesting that perhaps the bull market has come to an end. In fact, today CNBC’s Bob Pisani said that the dividing line among investors is whether or not one believes an economic recession is imminent in 2020.


*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.

EARNINGS TO THE RESCUE

EARNINGS TO THE RESCUE

EARNINGS TO THE RESCUE

Stocks opened higher today after Apple’s (AAPL) earnings announcement (see below). The Dow is currently up 369 pts and the SPX is up 1%. Tech, industrials and consumer discretionary sectors are leading the way, up over 1% in early trading. In particular, AAPL is up 4.7% and Amazon (AMZN) is up 3.4%. The VIX Index—a common fear gauge among traders—is still hovering around 19 where it has been for the past couple of weeks. With every passing day it seems more likely that Christmas Eve was the correction bottom. Commodities are trading mostly higher today. WTI crude oil is back up around $54.70/barrel and you can expect it to keep going in the near term. Bonds are mixed; Treasuries are down but junk bonds are higher on the day. The 10-year Treasury yield is hovering around 2.73% and has been pretty tight to that level over the last two weeks. The yield curve is still flattish but hasn’t inverted yet. By the way, Fed Chair Powell is scheduled to hold a press conference today discussing the FOMC’s monthly policy meeting.


*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.

October 11, 2018

October 11, 2018

The major stock market averages opened higher but quickly gave way. The Dow is now down 230 pts and the S&P 500 Index (SPX) is down 1% on the session. This is follow-through from yesterday’s rout, when the SPX gave up about 3%. Unlike yesterday, however, the tech sector is actually up slightly, whereas utilities and real estate sectors are down well over 1%. The energy sector is down 1.6% in early trading as oil prices retreat. The SPX is now about 6.6% off of its all-time high of about 2940. This morning, the index pulled back to a long-term support level of about 2,745. If today’s low holds, this will be viewed as a very orderly mini-correction.


*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.

August 20, 2018

Stocks opened higher this morning (Dow +77 pts; SPX +.24%). Most sectors and industry groups are in green, led by energy, materials and industrials. However, semiconductors, gold miners and biotechs are not participating. The VIX Index is down slightly to trade around 12.5. Remember, the VIX is coming off of a mini spike to nearly 15 a week ago. European stock markets are broadly positive today, in the neighborhood of +.8% and most of Asia traded higher overnight. The dollar is flat against a basket of foreign currencies today but has spiked this month. WTI crude oil is up slightly to trade around $66.20/barrel. Copper is sitting near a 13-month low, mostly in sympathy with China’s trade war-induced stock market correction. Save oil, commodities generally haven’t done well this year (Gold -9%, silver -14%, iShares Global Agricultural Producers ETF -2%; iron ore flat). Bonds are up in price, down in yield this morning. The 5-year Treasury yield backed down to 2.70% and the 10-year yield fell to 2.83%. It does appear that yields are range-bound for the near term. In fact, over the last seven months the 10-year has been mostly confined to the range of 2.80% to 3.00%.


*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.

August 1, 2018

August 1, 2018

Stocks opened higher but quickly faded after Apple earnings and a positive jobs report from ADP. The Dow is down 62 pts and the SPX is down .15%. Tech, telecom and healthcare sectors are in the green. On the other hand, utilities, industrials and energy sectors are down over 1% in early trading. Oil prices sank below $68/barrel after the EIA said US oil stockpiles rose unexpectedly last week. That’s temporary; we know that gasoline demand is very high in the US. In addition, Reuters reports OPEC oil production rose to an 2018 high in July. Bonds are falling in price as yields tick upward. The 5-year Treasury yield rose to 2.88% and the 10-year rose to 3% on the ADP report (see below).


*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.