2-year Treasury yield

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.

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.

VOLATILITY IS HERE TO STAY IN AUGUST

Stocks opened lower this morning, taking a breather after two days of gains. The Dow is down 218 pts and the SPX is down 1%. Technology (-1.7%) and energy (-1.3%) are the worst performing sectors. Only utilities are holding flat. The VIX Index climbed back to 18.5 this morning. European stock markets (and those in China) closed down by about 1%. Commodities are mostly lower on the day, save oil. Oddly enough, WTI crude oil spiked more than 3% to trade at $54.40/barrel even after an IEA report showed global oil demand at a decade low. It’s no secret that slower global economic growth is bringing down the rate of demand growth; at the same time, US producers continue to pump oil near record levels. It just goes to show that speculation and manipulation are rampant with commodities, and day-to-day prices moves often don’t make sense. Safe-haven Treasury bonds are gaining in price today, pushing yields lower. On the other hand, corporate bonds are falling in price.


*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.

GREEN SHOOTS FOR THE ECONOMY

Stocks opened pretty flat this morning, waiting for the flood of earnings announcements scheduled this week. Today, the Dow is flat and the SPX is up .2%. The financial sector jumped 1.3% in early trading in reaction to rising interest rates (see below). The communications services sector is up .6% on a pop in telecom stocks. On the other hand, utilities and REITs—which are sensitive to interest rates—are down .5% to .7% today. Commodities are trading mostly lower. Copper plunged more than 5%--a big move for one day. We’ve heard that Chinese authorities are pulling back on economic stimulus, believing they’ve succeeded in stabilizing their economy. WTI crude oil is flat at $63.30/barrel. Bonds are selling off, especially at the long end. The 10-year US Treasury yield backed up to 2.53%. But the big news on the interest rate front is a surprise steepening of the yield curve. You may recall I’ve flagged the flat yield curve as a potential problem for the market and economy. The difference between short-term and long-term interest rates has been very small, suggesting slowing economic growth. Specifically, the difference between the 2-year and 10-year Treasury yields has been in the range of just .10% to .20% for about five months now. But late last week the gap started to widen, breaking out of that range. This could be good news and it bears watching.


*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.

ANY EXCUSE TO CONSOLIDATE

The major stock market averages gapped down at the open today (Dow -177 pts; SPX -.33%). Utilities and communications sectors are modestly higher, but most everything else is in the red. The energy sector is down .8% along with oil prices. Industrials are down 1% on weakness in Boeing (BA). European markets closed lower by about .3%, whereas Asian markets are up overnight.


*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.

December 19, 2018

Stocks surged at the open this morning, but who knows how the session with end? The Dow is currently up 175 pts and the SPX is up .68%. A few market sectors are up about 1%: energy, financials, materials. Most everything is trading higher, save gold miners and semiconductors. European markets are up about .3% to .9%, although Asia was mixed overnight. WTI crude oil, which has fallen out of bed since early October, is up 3% to about $47.65/barrel. OPEC says it will reduce production by about 1.2 million barrels per day but those cuts won’t go into effect until next month. At the moment, production in the US, Russia and Saudi Arabia is near record levels. Bonds are trading modestly higher in front of the Fed meeting today (see below). Since early November, bonds have done very well and that of course means interest rates have fallen. The 2-year Treasury note tends to move along with expectations for Fed rate hikes, and since November 8th the 2-year yield has declined to 2.66% from 3.1%. That probably means bond traders are predicting a pause in monetary tightening.


*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.

December 6, 2018

December 6, 2018

Stocks sank at the open despite better than expected economic data. For the first couple of hours, most major market sectors were down more than 3% before bouncing off the lows. This could be the correction’s capitulation flush. While the Dow was down about 770 points, it is now down 436 pts. The SPX is currently down 1.7%. The more defensive sectors (consumer staples, utilities) also dumped at the open but are trying to claw their way back. Foreign markets aren’t serving as a safe haven. European markets closed down more than 3%. Asian markets were down roughly 2% overnight. The dollar is weaker, but that’s not helping commodities, most of which are trading lower. WTI crude oil fell back to $50.60/barrel, but quickly bounced back over $51. Bonds are catching a bid as you might expect. The iShares 20+ Year Treasury Bond ETF (TLT) is up .6%. High-grade corporate bonds, which have lagged lately, are up as well today. Junk bonds continue to struggle. The 2-year and 10-year Treasury yields are down around 2.71% and 2.85%, respectively. The difference between those two yields, 14 basis points, is very small and that’s spooking equity markets. Looking back at the last two months, any volatility in rates has been greeted with fear. The market doesn’t like it when rates rise, and neither does it approve when rates fall. Both are somehow begin viewed as bad news.


*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.

September 25, 2018

September 25, 2018

Stocks opened mixed this morning. The Dow is currently up 27 pts and the SPX is flat. The Nasdaq is up .2%. Biotechs and energy-related stocks are leading the way. REITs are bouncing back from yesterday’s rout. On the other hand, a back-up in interest rates is causing the utilities sector to fall 1%. European stock markets are poised to close modestly higher today, but most of Asia was down overnight. China’s Shanghai Composite Index has recovered a bit over the last week, but remains 20% lower than where it began the year. Pretty much alone in the world, China is experiencing its own bear market. Most of the commodity complex is trading higher. WTI crude oil is up modestly to trade at $72.29/barrel. Copper is up about 7% so far this month after having taken a beating in June/July. Copper tends to trade with the Chinese stock market.


*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.

September 19, 2018

September 19, 2018

Stocks opened higher this morning (Dow +203 pts; SPX +.17%; Nasdaq flat). Banks, basic materials producers and emerging markets stocks are up over 1% in early trading. On the other hand, utilities and FAANG stocks are trading lower. European markets are poised to close up about .5% and Asia was up over 1% last night. The dollar is flat against a basket of foreign currencies today and commodities are mostly higher. WTI crude oil is up around $70.70/barrel. After falling more than 20% this year, copper prices have retraced about 3% this month. Bonds are selling off as yields head higher. The 5-year Treasury yield is back up to 2.96%, a level it hasn’t seen in 10 years. The 10-year Treasury yield is up around 3.08%, toward the high end of its 7-year range. Bond traders are clearly anticipating two more interest rate hikes by the Fed this year, but according to Bloomberg, traders are starting to price in a Fed pause in mid-2019. That’s because eventually, Fed tightening can choke off economic growth by making lending too restrictive.


*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 24, 2018

August 24, 2018

Stocks gapped higher this morning (Dow +154 pts; SPX +.6%). Flip-flopping from yesterday’s session, cyclical sectors like materials, energy and tech are leading the way. Utilities and consumer staples sectors are flat. This comes despite impeachment talk in Washington, no apparent progress in trade talks with China, and Fed Chair Powell’s comment that our economic expansion supports the case for further gradual interest rate hikes. The reason for today’s rally appears to be the durable goods report (see below). The VIX Index fell back toward 12 this morning, indicating very little expected volatility over the next 30 days. European stock markets are poised to close about .3% higher but Asia was mixed overnight. The Chinese stock market can’t get out of its own way. The Shanghai Composite Index is down 21% this year. Today, the dollar is weaker and not surprisingly commodities are higher. WTI crude oil is trading up around $69.50/barrel. Copper is up over 2% after having fallen more than 20% this year. Bonds aren’t moving much. The 2-year Treasury yield, which tends to reflect Fed rate hike expectations, has gone nowhere for the last month. In other words, investors don’t believe the Fed will more aggressive with rate hikes. And yet, the difference between the 2-year and 10-year yields has fallen to just 19 basis points (.19%).


*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 8, 2018

August 8, 2018

Stocks opened lower today on escalating trade tensions with China. The Dow is currently down 38 pts and the SPX is flat.  Losses are led by energy as well as the defensive sectors. On the other hand, banks, semiconductors and retailers are higher in early trading. Most European markets are poised to close lower by .3% and China’s stock market gave up the prior session’s gains last night. WTI crude oil sank nearly 4% to trade at $65.50/barrel after Chinese import data revealed modestly lower oil demand over the last few months. Traders are eager to jump to the conclusion that trade tariffs are damaging commodity demand. The fact is that economists are expecting global oil demand to grow 1.5% this year vs. the historical average 1%. So don’t be surprised if oil prices continue the uneven march higher. Bonds are mixed in today’s trade. The iShares 20+ Year Treasury Bond ETF (TLT) is up .1% (but is still down 6% this year). Corporate bonds—represented by the iShares IBOXX Investment Grade Corporate Bond ETF (LQD) are down about .1% today. Yields aren’t moving much. The yield curve remains pretty flat; the spread between the 2-year and 10-year Treasury yields is hovering around .30%.


*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.

July 19, 2018

Stocks gapped down at the open (Dow -86 pts; SPX -.29%). Utilities and real estate are rebounding, but most everything else is down in early trading. European markets are about to close down .4% and most of Asia was down overnight. China’s market is still down 20% on the year. WTI crude oil is trading up 1% to $69.50/barrel. Bonds are trading nearly flat yet again, and this month-long absence in yield volatility is not normal. That fact has some technical analysts calling for an upside breakout in yields sometime soon.


*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 25, 2019

Stocks fell at the open on fresh trade provocations by the Trump Administration. The Dow and SPX are currently down 366 pts and 1.3%, respectively. Again, industrials and materials—which would fare the worst in a trade war—are down about 1%. The tech sector is down nearly 2% as semiconductors are also seen as vulnerable. On the other hand, defensive sectors like utilities and telecoms, are in the green. Asian stock markets continue to fall. The Shanghai Composite is down 20% from its January highs. The US dollar is about 5.5% stronger than it was in mid-April, and the Bloomberg Commodity Index is down 4.5% over the same period. WTI crude oil is down slightly to trade at $68.36/barrel. OPEC agreed to a vague increase in oil production.


*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 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.

April 24, 2018

Stocks popped at the open but quickly turned around. The Dow is down 53 pts and the SPX is down .12%. The telecom sector is up over 1.5% after Verizon (VZ) reported first quarter earnings. Utilities and financials, which usually move opposite these days depending on interest rates, are both in the green. But tech, industrials, materials and consumer discretionary are sinking. WTI crude oil is trading back up over $69/barrel. Very few saw that coming at the beginning of 2018. Interest rates continue to march upward and that—along with earnings announcements—is the story of the day. The 5-year Treasury yield is up around 2.83% and the 10-year yield just touched 3% for the first time since the beginning of 2014. Remember that over the last six months scads of Wall Street strategists and economists have said a 3% 10-year would absolutely upset the stock market. We’ll see.


*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.

April 17, 2018

Stocks surged at the open, following yesterday’s gains. The Dow is currently up 256 pts and the SPX is up 1%. Consumer discretionary, industrials, tech, materials and real estate sectors are all up over 1% in early trading. In fact, all eleven major market sectors are in the green. The VIX Index, which measures investor fear, is down around 15.6, signaling that the stock market correction is resolving. Commodities are mostly higher on the day. WTI crude oil, recently boosted by geopolitical tensions, is trading down modestly to $66.11/barrel. Short-term bonds are selling off, and yields are resuming their march higher. The 2-year Treasury yield is trading up to 2.40% (a fresh 9 ½ year high), and the 5-year is up around 2.69%. Meanwhile, longer-term bonds aren’t moving much. The 10-year Treasury yield is hovering around 2.83%. And of course, that means the yield curve (difference between short and long rates) is flattening again. The Fed seems intent on two more rate hikes this year, which affects the short end. But inflation expectations have stagnated, and that affects the long end.


*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.

April 13, 2018

Stocks gapped up at the open but quickly gave way. The Dow is currently down 39 pts and the SPX is flat. Defensive sectors are showing some strength today, as well as energy. But financials (especially banks) are down after some key earnings announcements. Despite that, the VIX Index is down around 17.8. WTI crude oil is up yet again, around $67.409/barrel, to new 3-year highs. The headlines cite rising geopolitical tensions, but whatever the reason, it can’t be supported by fundamentals. Bonds are mostly unchanged today. The 5-year Treasury yield is hovering around 2.67% and the 10-year yield is trading at 2.82%. However, the 2-year Treasury yield continues to rise and at 2.36% is the highest since 2008. The yield curve continues to flatten.


*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.

February 5, 2018

Stocks gapped down at the open following Friday’s dip. The SPX is currently down .8% and the Dow is down 250 pts. Energy, Financials, Consumer Staples and Healthcare sectors are down more than 1% in early trading. Only Utilities are trading modestly higher. The SPX is now down 4.7% from its all-time high back on Jan. 26th. So this is not yet a “correction,” typically defined as a 10% decline. The VIX Index is up around 18 and VIX March futures are trading down around 15, so that suggests we’re approaching the bottom a short-term market pullback. Commodities are mixed. Copper and gold are trading higher—gold is now up 2.5% on the year). WTI crude oil is trading down 1.8% to $64.28/barrel.


*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.

January 9, 2017

Stocks opened higher again this morning (Dow +99 pts; SPX +.3%). Healthcare stocks are on the rebound after yesterday’s rout. In fact, the Nasdaq Biotech Index is up 1.6% at the moment. Banks are also rallying over 1%. Bond replacement stocks, such as utilities, telecoms and real estate are down. The dollar is stronger against a basket of foreign currencies and bonds are selling off. The 5-year Treasury yield shot up to 2.31%, which is a long-term resistance level going back to April 2011. The 10-year yield is also moving higher, to 2.53% (highest since last March). The next level of resistance is 2.63%. If Friday’s CPI inflation report comes in high, the 10-year could possibly hit that resistance level in short order.


*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.

December 20, 2017

Stocks opened mixed this morning (Dow +16 pts; SPX flat). Utilities and real estate are down for the second straight session, and consumer staples about-faced to fall .7%. Telecoms are the best performing sector at the moment, up 1.5%, likely because they will really benefit from lower corporate taxes. Energy, materials and industrials are also trading higher. European stock markets will close in the red and Asia was mostly down overnight. The dollar is a bit weaker today against a basket of foreign currencies and commodities are not surprisingly trading higher. WTI crude oil is up slightly to trade around $57.80/barrel. Bonds are again selling off, with yields higher. And again, this is probably the biggest story of the day. The 5-year Treasury yield spiked to 2.24% and the 10-year yield rose to 2.49%, breaking out of its recent trading range. Importantly, the yield curve has steepened over the last two trading sessions. That is, the difference between the 2-year and 10-year Treasury note yields has increased from 51 basis points to 62 basis points. When longer term rates rise faster than short term rates, it is a signal of rising inflation expectations. 


*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.