AAII Bullish Sentiment Index

STOCK MARKET NEAR ALL-TIME HIGHS

Major stock market averages opened mixed this morning (Dow flat; SPX +.37%). Energy stocks are sinking on lower oil prices. On the other hand, consumer discretionary (+.8%), materials & tech (+.7%) are faring well. Overall, the stock market’s trend has been upward since the 6% correction in early August, and it is now close to all-time highs again. The same cannot be said of most overseas stock markets, which have generally underperformed the US for a decade or more.


*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.

HONG KONG JITTERS

The major US stock market averages dived in early trading on continued social unrest in Hong Kong. The Dow is currently down 239 pts and the SPX is down .7%. Ten of eleven market sectors are in the red; financials & energy are the worst performing. As is typical in August, exchange trade volume is pretty low. European markets are poised to close slightly lower today. Strangely enough, most of Asia closed higher last night. Despite intensified pro-democracy protests, Hong Kong’s Hang Seng stock index fell only .4% during the session. The US dollar continued to strengthen vs. China’s yuan and that’s putting some pressure on commodities (i.e. iron ore, copper, agricultural goods). WTI crude oil is unchanged around $54.50/barrel. Bonds are once again powering ahead as yields edge lower. The iShares 20+ Year Treasury Bond ETF (TLT) is up 1.5% today (and 17% on the year). High-grade corporates are up about .4%. On the other hand, Junk bonds are down .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.

AWAITING THE FED

Stocks opened slightly higher this morning but quickly faded. The Dow is currently down 38 pts and the SPX is up .18%. The tech sector surged 1% in early trading, led by semiconductor stocks. In addition, biotechs and transports are modestly higher. Most everything else, however, is in the red. The Dow is now up about 18% this year, and investors are scrutinizing earnings reports to see if the growth outlook will support further stock market gains (see below). The VIX Index—a common measure of fear among traders—is hovering around 14, considered fairly low. And strangely enough, surveys by the American Assn. of Individual Investors (AAII) show improving sentiment among non-professional investors. Taken together, we can conclude that people feel fairly good about the market. Commodities are mixed today. Iran’s geopolitical tantrum is propping up oil prices (WTI crude back up over $56/barrel). But copper and iron ore are lower in price. Bonds are mostly higher in early trading. The 10-year Treasury Note yield fell back to 2.03% today. Long-term Treasury bond funds, such as iShares 20+ Year Treasury Bond ETF (TLT) is up nearly .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.

December 17, 2018

December 17, 2018

The major stock market averages fell at the open but quickly pared losses. At the moment, the Dow and SPX are down 104 pts and .5%, respectively. Utilities and real estate sectors are down over 1% in early trading, whereas the financial sector is finally catching a bid. Semiconductors are up 1% as well. The VIX Index is up around 22.5 and VIX January futures are up around 21. That tells us traders are still nervous and expect continued volatility. The dollar is a bit weaker today, but commodities aren’t uniformly higher. WTI crude oil fell back to $50/barrel. Copper is down again—now -20% on the year. That ought to tell you China’s economy is slowing. Bonds are catching a bid as interest rates tick lower. The 5-year and 10-year Treasury note yields are hovering around 2.71% and 2.86%, respectively.


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

July 6, 2018

Stocks opened higher this morning as the jobs report and trade tariffs dueled for traders’ attention. The Dow is currently up 120 pts and the SPX is up .8%. Indeed, this is a traders’ market with low volume, lots of back-and-forth, but no real trend. At the moment, all eleven market sectors are in the green, led by healthcare (+1.3%). Biotechs are rallying on the back of a positive clinical trial for Biogen’s new Alzheimer drug. European markets are poised to close slightly higher on the session and Asian markets were (surprise, surprise) higher overnight. The VIX Index is back town to 13.6 and VIX July futures are trading down around 14.8. Oil is rising again; WTI crude is up around $73.60/barrel. The Bloomberg Commodity Index is up .3% today but still down on the year. Copper continues to struggle on fears that the emerging trade war could dent China’s economy. Bonds are trading higher in price—lower in yield—despite a positive jobs report. The 5-year and 10-year Treasury yields are hovering around 2.73% and 2.83%, respectively. So as an investor, you get only 10 more basis points in yield for locking up your money over an additional 5 years. The yield curve continues to flatten, and the Federal Reserve is increasingly squeezed between that fact and the fact of strong economic growth. Bloomberg Economics now believes the flat yield curve will convince the Fed to pause rate hikes. 


*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 17, 2017

Stocks opened mixed today (Dow +25 pts; SPX flat). The Dow just hit 23,000 for the first time. Retailers & biotechs are trading higher, but most everything else is in the red. The VIX Index is up 4% to trade just over 10. VIX November futures are trading around 11.7. Commodities are trading lower (copper, gold, oil). WTI crude oil is down .8 to trade around $51.40/barrel. Bonds are down slightly as well. The 5-year Treasury yield is up around 1.96% and the 10-year Treasury yield is up around 2.31%. 


*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.

March 27, 2017

Stocks opened lower again this morning (Dow -65 pts; SPX -.26%). The Dow is on a 7-day losing streak. Banks are leading the way lower (-.9%), along with transports (-.3%) and semiconductors (-.25%). Gold miners and biotechs are actually in the green. The VIX Index is up around 13.5 as consternation over the GOP healthcare bill grows. European markets just closed slightly lower and Asia was down overnight. The dollar is lower today, and is now down 3% year-to-date. But that’s not giving a lift to commodities this morning. WTI crude oil is down modestly to trade around $47.60/barrel. Bonds are rising in price as yields fall. The 5- and 10-year Treasury yields are down to 1.91% (1-month low) and 2.38%, respectively.


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

February 9, 2017

Stocks opened higher this morning after President Trump promised a “big league” and “phenomenal” announcement on tax reform. We’ll see about that. The Dow and SPX are currently up 128 pts & .6%, respectively. Most sectors are higher in early trading, led by financials and energy. Those two groups have not done well lately, mostly because they’re digesting late 2016 gains. And by the way, the leading sector so far in 2017 is tech, up nearly 7%. One of the key reasons is that we’ve seen very good earnings announcements from major players in tech (i.e. Facebook, Alphabet, Apple). The VIX Index is down again today, trading around 11.1. VIX February futures are down around 12.3. So we’re still hearing traders bemoan “complacency.” Today, WTI crude oil is trading up around $52.80/barrel. Most other commodities are faring well so far in 2017: copper +6%, iron ore +18%, agricultural commodities +4%, gold +7%. After selling off for nearly 2 months, bonds are rising in price today. The 5- and 10-year Treasury yields ticked up to 1.85% and 2.38%, respectively. 


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

January 19, 2017

Stocks opened lower this morning (Dow -27 pts; SPX -.15%). Leading the market lower are banks, biotechs, and REITs. Energy stocks are also lower in early trading as oil prices dip. The VIX Index is actually a little as well, trading around 12.2. Remember, traders are watching this fear gauge, which is expected to rise as the Trump Rally fades. WTI crude oil is recovering some of yesterday’s lost ground to trade up around $51.50/barrel. Bonds are selling of as rates rise. So after a month-long pause, perhaps interest rates are headed higher again. The 5-year Treasury yield is up around 1.97% and the 10-year is trading at 2.47%. So don’t miss the fact that today bonds and stocks and gold are all trading lower. 


*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.

November 17, 2016

Stocks opened higher this morning (Dow +7 pts; SPX +.35%). Consumer discretion and financials are leading the market higher. Materials, real estate and consumer staples are lower. By the way, over the last couple of months we’ve seen a change in sector leadership. The defensive sectors (utilities, telecom, staples) are losing momentum while the cyclicals (industrials, financials, tech) have been gaining momentum. The dollar continues to strengthen and interest rates are again on the rise. WTI crude oil is trading flat around $45.50/barrel. Copper and iron ore continue to surge higher, driven by stability in China and rising expectations for fiscal stimulus under President-elect Trump. Today, the 5- and 10-year Treasury yields are up around 1.69% and 2.25%, respectively. Rates are back to where they were at year-end 2015. 


*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 11, 2016

Stocks opened sharply higher this morning, eclipsing all-time highs for the first time in about 14 months. At the moment, the Dow and SPX are up 126 pts & .5%, respectively. The Nasdaq is up .8%. Industrials, tech and materials sectors are leading the way. The dollar is stronger on the day and WTI crude oil is trading down modestly to $45/barrel. Bonds are trading off a bit, with yields moving higher. The 5-year Treasury yield is up to 1.02% and the 10-year yield is up a bit to 1.42%. 


*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 1, 2016

Stocks gapped down at the open but quickly recovered (Dow -21 points; SPX flat). The Nasdaq is up slightly. Telecoms are down 1% in early trading, along with gold miners, banks, and transports. On the other hand, biotechs and semiconductors are higher. WTI crude oil is trading down just under $49/barrel. Gold and copper are down modestly as well. Bonds are trading nearly unchanged again. The 5-year and 10-year Treasury yields are hovering around 1.38% and 1.84%, respectively. By the way, the average 30-year fixed mortgage rate is around 3.65%, according to bankrate.com. 


*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.

May 20, 2016

Stocks opened higher this morning (following Europe’s and Asia’s lead) and erasing yesterday’s losses (Dow + 107 pts; SPX +.7%). Early trading looks to the opposite of the previous session: tech and financials are leading the way, whereas utilities and consumer staples are lagging. To be more specific, semiconductors, banks, biotechs and transports are all up over 1%. Asian market rose .5% overnight and European markets are poised to close up roughly 1.5%. The dollar is flat and commodities are mixed. WTI crude oil is down slightly to $47.80/barrel. Bloomberg reports US crude oil production declined for a third straight month as oil companies continue to cut back spending. Production volume fell to 8.8 million barrels per day last week, and that equates to a 4.5% decline so far in 2016. Bonds are mostly unchanged. The 5- and 10-year Treasury yields are hovering around 1.38% and 1.86%, respectively. 


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

May 9, 2016

Stocks opened higher but immediately turned south. The Dow and SPX are currently down 37 pts & flat, respectively. Healthcare is the bright spot, up 1% in early trading. Materials stocks are underperforming this morning (sector down 1%) as commodity prices fade. Copper & iron ore are down 2-4% after a report that China imported 21% less copper in March than the prior month. We also saw a report of rising iron ore inventories at Chinese ports. WTI crude oil is back down under $4/barrel today. Saudi Arabia’s king appointed a new central bank chief as well as a new oil minister. This seems to confirm Saudi’s intent to begin diversifying the economy away from oil revenue. The kingdom plans to sell sovereign bonds to raise money for the effort. The new oil minister today pledged to maintain the country’s strategy of protecting market share in spite of low oil prices (no surprise). Bond prices are higher as yields dip. That’s the trend we’ve seen over the last week. The 5- and 10-year Treasury yields are back down to 1.2% and 1.76%, respectively.


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