10-year Treasury Note Yield

ALL EYES ON CORPORATE AMERICA--NOT THE FED OR CHINA

Stocks opened higher due to some encouraging earnings announcements (see below) and reports of a possible Brexit deal in Europe. The Dow is currently up 36 pts and the SPX is up .2%. Eight of eleven major market sectors are in the green, led by healthcare and industrials. Considering positive headlines about Brexit, it is surprising that European markets didn’t close uniformly higher. Yes, the UK’s FTSE 100 Index closed up by .57%, but the Eurostox 50 Index was flat and France’s CAC 40 Index fell. Commodities are not trading according to a risk-on pattern today. Gold is up and oil is down. The bond market is decidedly mixed. Safe-haven Treasuries are falling in price, whereas corporate bonds (and especially junk) are trading higher. The 10-year Treasury yield has been hovering around 1.75% over the last week.


*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 SEASON TO THE RESCUE

The major stock market averages shot higher this morning (Dow +250 pts; SPX +1.1%). Healthcare (+1.9%) and financial (+1.9%) sectors are leading the way after a few better than expected earnings announcements (see below). On the other hand, defensive sectors such as utilities and consumer staples are in the red. Traders are taking the opportunity to shift risk-on…for the moment. Remember, the factor that trumps Trump (or geopolitics or trade war or just about every other negative factor) is growth. And if third quarter earnings season manages to beat expectations and calm fears about the outlook for 2020 corporate earnings, well then the stock market will move higher. Commodities are mixed in early trading. WTI crude oil is roughly flat at $53.65/barrel. Iron ore is up about .7%, but copper is down a bit. Gold sank nearly 1% as risk-on trading took hold this morning. Bonds are also selling off. The 10-year Treasury Note yield ticked back up to 1.74%. Long-term Treasuries are down about 1% and intermediate high-grade corporate bonds are down about .15%. Junk bonds, however, are trading up along with stocks.


*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.

JOBS REPORT A SIGN OF STABILITY, NOT SLOWDOWN

Stocks opened mostly higher this morning (Dow +136 pts; SPX +.7%), rebounding a bit from this week’s rout. The tech sector is up 1.2%, and most other cyclical sectors are in the green after the monthly jobs report (see below). Only energy stocks are in the red despite higher oil prices today. The VIX Index, which spiked over 20 on Wednesday, fell back to 18. VIX November futures fell back to 19, suggesting his week’s market decline is just a blip. European markets closed up by about .5% in today’s session. Commodities are mostly higher on the day. WTI crude oil is up 1% to trade around $52.90. Gold is roughly flat after having surged 17% so far this year. Bonds are rallying right along with stocks this morning. The iShares 20+ Year Treasury Bond ETF (TLT) tacked on another .6% in early trading. The fund is up almost 20% this year. And yes, that means it has outperformed the stock market. Even intermediate term high-grade corporate bonds are up more than 10% this year.


*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 UNCERTAINTY COMING HOME TO ROOST

Stocks sank at the open on weaker economic data, but quickly recovered on hopes of another Federal Reserve rate cut. The Dow is currently up 50 pts and the SPX is up .5%. Lower interest rate expectations immediately drove the real estate sector higher (+1%), and the financial sector lower (-.4%). Commodities are following recent trend, with gold up .6% this morning and WTI crude oil down 1% to $52.10/barrel. We’ve seen significant volatility in oil this year, with a wide trading range of $46-$66/barrel. In the face of increased US oil production and the trade war, geopolitical events—Iran-sponsored terrorist attacks—haven’t been able to prop up oil they way they used to. Bonds are trading higher again this morning. The 10-year US Treasury yield fell back to 1.54%. Believe it or not, the yield curve has steepened. That is, the difference between the 10-year and 2-year Treasury yields has risen to +15 basis points, from -5 basis points five weeks ago. Steepening has been caused by falling short-term interest rates (i.e. Fed rate cuts).


*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.

SUBDUED MONDAY

Major stock market averages opened in the green this morning (Dow +148 pts; SPX +.6%). The SPX is in the process of re-testing its July 26th closing high of 3,025. The results of that test will help determine whether October is a good or bad month for investors. Ten of eleven market sectors are higher today, led by technology and healthcare. Energy is the only standout, down another .3%. Over the past couple of weeks, WTI crude oil has retreated from $63/barrel to just $55/barrel. That move comes, by the way, as energy-related geopolitical tensions have flared up between Iran and Saudi Arabia. It used to be that such events would cause monster spikes in oil, but the world has changed. US producers now have the ability to produce more oil than ever. The bond market is roughly unchanged this morning. After a mini spike in overnight interest rates, intervention by the Federal Reserve has had the desired calming effect. Here’s a check on prevailing bond market yields: longer-term save haven Treasuries 1.7% - 2%; intermediate high-grade corporates 3%-3.5%; intermediate municipals 2.5%-3%; junk corporates 5%-5.5%.


*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.

TEMPER YOUR ENTHUSIASM

Stocks opened higher on misplaced optimism over upcoming trade talks, but quickly faded. The Dow is currently down 30 pts and the SPX is down .2%. Defensive sectors are leading the way (utilities, consumer staples). The energy is sagging, down 1.2% in early trading. Other key groups are down as well, including banks, semiconductors and biotechs. The VIX Index edged back up to 16 this morning and VIX October futures are trading up around 17. Those are fairly low levels, and with the stock market near all-time highs traders are expecting some type of sell-off in the near-term. Commodities are down on the day, with oil down 1% to $57.60/barrel. Gold is taking a breather after having surged 18% so far this year. Bonds are trading higher across the board today as yields continue to slide. Long-term Treasuries are up about .8% and intermediate high-quality corporates are up about .25%.


*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.

RE-TESTING ALL-TIME HIGHS

Stocks surged higher at the open (Dow +100 pts; SPX +.4%). Most sectors are trading higher, save energy. Foreign stock markets closed mostly higher as well. The SPX is now trading at 3,019 and is in the process of re-testing its all-time high of 3,028. Likely as not, within the next several trading sessions the index will either fail and correct yet again, or break out to new highs with conviction. Commodities are mixed. Believe it or not, oil prices are up .7% and yet energy stocks are down again. Gold and gold mining stocks are up on the day. And believe it or not, both gold miners and the tech sector are up over 30% so far this year. That just goes to show you investors are looking to two things: dependable growth (i.e. tech) and defensive stability (gold). Bonds are trading higher in price, lower in yield. Junk is flat, high-grade corporates are up about .4% and long-term Treasuries are up nearly .7%.


*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.

FED DAY!

Stocks gapped down at the open (Dow -85 pts; SPX -.3%). Industrials, energy and financials are leading the way (all down .5% or more). Only utilities are powering ahead (+.5%). The Trump Administration asked the US Treasury to dramatically increase economic sanctions on Iran after concluding its culpability in a recent oilfield attack in Saudi Arabia. European markets are poised to close up by about .3% and most of Asia was modestly lower overnight. Commodities are trading lower today. Copper is down .3%; iron ore fell more than 3%. Oddly enough given geopolitical tension, WTI crude is down 1% to trade around $58.70/barrel. Bonds are mostly higher on the day, except for junk. The 10-year Treasury Note yield fell back to 1.75%.


*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.

GEOPOLITICS REARS ITS UGLY HEAD

Stocks fell at the open (Dow -147 pts; SPX -.4%). Most sectors are down today. The energy sector, however, surged 2.5% in early trading. Over the weekend, drones—likely from Iran—attacked Saudi oil fields, knocking about 5% of global oil production temporarily offline. As a result, WTI crude oil is up nearly 11% to about $60.80/barrel. That’s the largest one-day move since 1991. President Trump said the US is “locked and loaded” to retaliate “depending on verification” of Iran’s culpability. Chevron (CVX) is up about 2%, EOG Resources (EOG) is up 5.5%, and Pioneer Natural Resources is up 3%. Not surprisingly, aerospace/defense stocks are also up 1-3%. Other commodities are mixed. While iron ore and copper are down about 1%, gold is up 1% on the day. Bonds are trading higher as well, with safe-haven Treasuries faring the best. The 10-year Treasury Note yield fell back to 1.85%.


*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.

BETTER DATA = BETTER MARKET

Stocks opened modestly higher today (Dow +51 pts; SPX flat). The materials sector (+1.3) is leading the way, along with financials (+1%) and industrials (+.8%). On the other hand, defensive sectors like utilities and consumer staples are down. The immediate reason is better than expected economic data (see below). The VIX Index fear gauge fell to 13.6 and stock markets around the world rallied today. Commodities are mixed. WTI crude oil is flat around $55/barrel. Copper surged 2%. Gold is down about .6%. Bonds are selling off hard today after enjoying a huge rally from the end of February to the end of August. The 10-year Treasury yield has backed up to 1.88% from 1.50% this month.


*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.

JOB MARKET QUESTION MARK

Stocks opened lower this morning (Dow -83 pts; SPX -.45%). Surprisingly, the energy sector surged 1.6% in early trading along with oil prices. Industrials and materials are also modestly higher. Most everything else is lower on the day. The real estate sector sank nearly 2% on rising interest rates, but for some reason the banks aren’t spiking. Usually those two groups are mirror images of one another on days when interest rates move sharply. Most commodities are trading higher. WTI crude oil is up 1.4% to trade at $58.60/barrel. Bonds are selling off and yields are moving higher. With the massive run-up in bonds this year, a correction makes a lot of sense even if the longer term direction of rates is still lower. The 10-year Treasury yield shot up to 1.67% from 1.56% last Friday.


*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.

JOBS REPORT SPURS DEBATE ON HEALTH OF THE ECONOMY

Stocks opened modestly higher this morning (Dow +70 pts; SPX +.14%). Small gains are broad-based across consumer-facing sectors, as well as financials, healthcare, industrials, materials and real estate. Only utilities, communication services and tech are left out with small losses. Commodities are trading lower. WTI crude oil fell back to $55.70/barrel; copper fell .5% and iron ore is down something like 3%. Only gold (+.14%) is higher on the day. The bond market is modestly higher in today’s trade. The 10-year Treasury Note Yield is unchanged at 1.55%. Bonds have done well this year due to the sharp decline in rates. The iShares 20+Year Treasury Bond ETF (TLT) is up nearly 20% and the iBoxx High Grade Corporate Bond ETF (LQD) is up 13%. And in case you’re wondering, no it is not normal for both the stock and bond markets to post 10-20% returns over the same 8-month period.


*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.

WELCOME ENCOURAGEMENT ON THE ECONOMY

Stocks gapped up at the open, continuing yesterday’s rally. The Dow is currently up 440 pts and the SPX is up 1.3%. The more cyclically sensitive sectors—industrials, financials, energy, tech—are up well over 2% in early trading. On the other hand, defensive sectors near all-time highs are selling off today (i.e. utilities, real estate). The VIX Index fell back to 16 and VIX October futures fell to 18. In other words, traders aren’t expecting a massive jolt of market volatility over the next 30-60 days. The reaction in commodity markets isn’t surprising: gold fell and copper rose. Even oil, which has had a hard time lately, is back up around $57.40/barrel in early trading. Bonds (except for high-yield “junk”) are selling off. The 10-year Treasury yield jumped back to 1.58% as the price fell. And by the way, over the last couple of trading sessions the yield curve turned positive.


*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.

ABOUT FACE!

Stocks opened higher this morning, rebounding from yesterday’s Tweet-induced sell-off. The Dow is currently up 211 pts and the SPX is up .9%. Cyclical sectors like energy, financials, industrials and tech about-faced and are up more than 1% in early trading. The VIX Index, a common measure of fear among traders, fell back to 18.2. Just like that, traders flipped the switch and sentiment is largely risk-on today. Commodities are trading higher; WTI crude oil rebounded to $56.15/barrel and copper is up over 2%. Bonds are roughly unchanged today. Longer-term safe-haven Treasuries are selling off a bit. The 10-year Treasury Note yield ticked up to 1.47%. Junk bonds are up modestly.


*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.

MARKET WEAKER ON TRUMP TWEETS AND ISM DETERIORATION

Stocks sank at the open this morning after the latest round of trade tariffs were imposed on $300bil of goods imported form China. On top of that, President Trump Tweeted that if he is reelected, hammering out a trade deal with China “would get MUCH TOUGHER.” The Dow is currently down 325 pts and the SPX is down .7%. Sectors down more than 1% in early trading include industrials, tech, financials and energy. European stock markets are poised to close down about .4% and Asian markets were mixed overnight. Commodities are mostly lower as well (except for gold +1.2%). WTI crude oil is back down around $53.25/barrel, a three-week low.


*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 WAR MOVES TO DEFCON 4

Stocks gapped down at the open this morning. The Dow is currently down 350 pts and the SPX is down 1.5%. Nearly every sector of the market is down more than 1%, led by energy and tech (-2%). Domestically oriented stocks like healthcare insurance, real estate and utilities are holding steady. But companies exposed to the trade war are getting hit. A lot of this is headline driven (see below). The VIX Index spiked to 17.5. Commodities are falling in value, save gold (+1.5%). WTI crude oil is down 3% to $53.60/barrel. Bonds are sopping up the negativity and benefiting from it. The 10-year Treasury Note yield fell back to 1.55% and the iShares 20+ Year Treasury Bond ETF (TLT) is up nearly .9% this morning. The often cited “yield curve” difference between the 2-year and 10-year Treasury yields is still barely positive. This is a technical indicator bond traders watch in order to gauge the chances of an economic recession within the next year or two.


*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 jumped at the open (Dow +260 pts; SPX +1.25%) after the Secretary of Commerce said President Trump intends to delay restrictions on US companies doing business with China’s Huawei Technologies. This has been flashpoint between US and Chinese trade negotiators, with the president using it alternatively as a carrot and then a stick. Traders are enjoying the carrot today; maybe we’ll see the stick again tomorrow or next week. UBS’s Rob Sechan says 85% of stock exchange trade volume during this month’s correction has been either ETF or algo-based—in other words, driven by short-term traders. All eleven major market sectors are in the green today. The cyclical sectors like energy, tech and consumer discretionary are leading the charge, up more than 1.3%. Interest rates jumped, allowing the banks to rally as well. WTI crude oil bounced back to $55.50/barrel, and gold is down .8%. Bonds sold off on higher yields. The 10-year Treasury yield climbed back to 1.60%. Junk bond are the exception, up .25%, as they typically trade along with stocks.


*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 WAR IS TAKING A TOLL

Stocks opened modestly higher this morning (Dow +38 pts; SPX +.16%). Defensive sectors—utilities, consumer staples, real estate—are leading way. On the other hand, energy, industrials and tech are flat to down in early trading. The VIX Index is holding its ground at 21.8 and VIX September futures are trading at 20.4. So despite incredibly bearish financial news media coverage, trading aren’t panicking. European markets will close slightly lower, whereas Asian markets were mostly higher overnight. Oil is down in price again; WTI crude is down 1% to trade around $54.60/barrel. The dollar is stronger after hints by an official at the European Central Bank (ECB) that a bigger monetary stimulus package is coming. Bonds are trading uniformly higher today as yields continue to drop. Junk bonds are up about .25% after some better than expected reports on the economy. But Treasuries are also catching a bid. The 10-year Treasury Note yield has fallen to just 1.55%, the lowest since September 2016.


*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.

THE BOND MARKET IS DRIVING THE BUS

Stocks opened sharply lower today (Dow -590 pts; SPX -2.1%). Financials and energy are leading the market lower, down by over 3% in early trading. The only sector in the green is utilities, up .4%. The SPX is still about 1.5% higher than it fell on Monday August 5th, so this is not even the worst day for stocks this month. Machine trading has taken over in reaction to falling yields in the bond market, and also lower trade volume. The VIX Index climbed back to 21, but that’s pretty tame compared with the spike above 35 we saw last December. As opposed to yesterday, everyone wants to be first to call the next recession. Scanning Bloomberg headlines, we see the following:

“Bond Panic Pummels Banks with Global Recession Fears…”

“Countdown to Catastrophe? The Yield Curve and Stock Bull Markets”

“Recession Worries Pile Up for the Battered Global Economy”


*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.

MANIC MARKET FLIPS ON TRADE HEADLINES

Stocks rallied after the Trump Administration delayed some of the new trade tariffs planned for next month. The Dow is currently up 363 pts, the SPX is up 1.3% and the Nasdaq is up almost 1.6%. Not surprisingly, the leading sectors today—consumer discretionary, industrials, tech—are viewed as having the most vulnerability to an escalating trade war. By contrast, the two sectors seen as the safest in an uncertain global trade environment—utilities and real estate—are in the red today. The VIX Index, a common gauge of fear among options traders, fell back to 17.9 from 21 yesterday. European stock markets rallied sharply on the trade tariff news as well. Asian markets, however, were down overnight on civil unrest in Hong Kong. The US dollar continues to strengthen as the Chinese yuan weakens. But better investor sentiment today is propping up commodities. WTI crude oil spiked 3% to $56.80/barrel for no good reason. Bonds are selling off after an enormous 2019 rally. The 10-year Treasury Note yield bounced back to 1.68% this morning. Since investors’ primary concerns at the moment are 1) trade war, and 2) falling interest rates, any day in which rate rise will generally evoke risk-on sentiment.


*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.