Brexit

RELIEF RALLY

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


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

SENTIMENT U-TURN ON BOND MARKET CONCERNS

The major stock market averages rolled over this morning. The Dow is currently down 379 pts and the SPX is off by 1.7%. The Nasdaq is down 2.1%. Energy, financials and materials—the sectors that tend to do poorly when interest rates drop—are down by more than 2% in early trading. On the other hand utilities, real estate and consumer staples—defensive sectors that do well in slower growth, lower-rate markets—are in the green. European stock markets closed down more than 1.5%, although most of Asia was in the green overnight. Commodities are mostly lower today. WTI crude oil backed down to $58.50/barrel. The bond market is rising as yields fall. Clearly, some capital is draining out of stock and flowing into bonds today. The 10-year Treasury yield fell to 2.43%, the lowest since December 2017.


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

November 28, 2018

November 28, 2018

Stocks opened higher again this morning (Dow +433 pts; SPX +1.46%), soothing the frayed nerves of panicky traders. All eleven major market sectors are in the green, led by tech (+2.2%) and consumer discretionary (+1.9%) sectors. The VIX Index is nearly unmoved at about 19. We’re seeing a relief rally, especially in riskier assets. The dollar fell on Fed comments (see below) and commodities are getting some relief. WTI crude oil bounced back to nearly $52/barrel. Bonds are up in price, down in yield, also responding to the Fed. The 5-year and 10-year Treasury yields ticked down to 2.86% and 3.04%, 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.

November 16, 2018

November 16, 2018

The major stock market averages began the weak dreadfully, with the SPX dropping almost 2% then proceeding down another 2% over the next couple of days. The S&P 500 bounced back on Thursday, up 1.06% (29 pts) as well as the Dow up .83% (209 pts), a good day. They are both flat this Friday Morning.  Ten of the eleven sectors are in the red this week - the sole sector in the green for the week, so far this morning, are Utilities.  The VIX Index is just slightly below its historical average at 20.


*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 30, 2018

August 30, 2018

Stocks opened lower this morning after breaking to fresh highs earlier in the week. The Dow is currently off 112 pts and the SPX is down .28%. The materials sector is down 1.3% in early trading on weakness in gold miners and chemical producers. Banks and transports are down about .5%. Healthcare stocks are roughly flat and utilities are up modestly. The VIX Index—a common gauge of fear among traders—is back up to 12.5 but that’s still a very low level. For context, during the correction last January/February, the VIX spiked briefly to 37. European stock markets will close about .5% lower in today’s session and most of Asia was down overnight. The US dollar is a bit stronger today against a basket of foreign currencies, reacting to strong economic data (see below). Most commodities are not surprisingly trading lower. But WTI crude oil is holding steady at $69.66/barrel. Bonds are higher in price, lower in yield today. The 5-year Treasury note yield backed down to 2.76% and the 10-year yield is at 2.86%.


*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 30, 2017

Stocks gapped up at the open, reversing yesterday’s decline and setting new highs. The Dow is currently up 181 pts and the SPX is up .67%. The energy sector is rebounding about 1% after a 5% correction earlier this month. Semiconductors are also up 1% after suffering a 5.7% drop over the last few days. Interestingly, European and Asian stock markets were down overnight. And the VIX Index (Dec. futures contract) is trading up near 11.5. The dollar is weaker against a basket of foreign currencies today, mostly due to Euro & Pound strength after Brexit negotiators made constructive progress toward a split. Commodities are mixed; WTI crude is trading up around $57.70/barrel. OPEC meets today in Vienna. Bond yields are slightly higher on the day. The 5-year Treasury yield is up to 2.11% and the 10-year is now at 2.39%.


*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 18, 2017

Stocks opened lower again today (Dow -40 pts; SPX -.3%). Gold miners and utilities are modestly higher, but most everything else is in the red. Real estate and telecom sectors are down .9%. Yesterday, the VIX Index spiked to 15.5 but today is back down under 15. VIX September futures are also around 15. CNBC points out that we’re not yet seeing a large selloff on big volume and that could be a sign of stability. In fact, a lot of professional investors are on vacation and exchange volume is very light. The dollar is weaker and commodities are mixed today. WTI crude oil is trading slightly lower to $46.95/barrel. Bonds are trading mostly higher in price, lower in yield. The 10-year Treasury yield is back down to 2.18%. And remember, at the beginning of the year the 10-year yield was near 2.5%. Since then, falling inflation expectations have resulted in lower yields. Alan Blinder, former Federal Reserve official, characterizes the dip in inflation this year as “mysterious.” Six months ago we had stable inflation, and now we’re seeing falling inflation. “What in the world happened?” He implied our methods for measuring economic activity may be flawed. 


*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 26, 2016

Stocks opened lower this morning but quickly turned around (Dow -30 pts; SPX flat). Investors are clearly freaked out about the Federal Reserve meeting, which kicks off today. Interest-rate sensitive sectors (utilities, telecom, REITs) are falling the most in early trading. Industrials and materials are in the green. The dollar is a bit weaker. Unfortunately, WTI crude oil is down under $43/barrel and that’s hurting stocks as well. Bonds are slightly weaker, with yields climbing. The 5- and 10-year Treasury yields are up to 1.15% and 1.57%, 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 12, 2016

The major stock market averages rose again this morning (Dow +95 pts; SPX +.6%). Cyclical sectors and industries are up the most (banks, transports, semiconductors, oil companies). And small-caps (Russell 2000 Index) have been outperforming large-caps for the last week. The SPX is now up 8% from its Brexit low on 6/27. The VIX Index has backed down to 13.5 and VIX August futures are down to 16.4. So less fear out there. The dollar is a bit weaker and commodities are broadly higher today. WTI crude oil is up 2.7% to $46/barrel. Bonds are selling off (finally), with yields heading higher. The 5- and 10-year Treasury yields are up to 1.06% and 1.49%, 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 5, 2016

Stocks opened lower this morning, following weakness in Europe. The Dow and S&P 500 are down 120 pts & .8%, respectively. The VIX Index is back up around 16 and VIX July futures are trading up around 17. So volatility isn’t expected to wane in the next 30 days. The defensive sectors (consumer staples, telecom and utilities) are holding up well despite really stretched valuations. The cyclical sectors, on the other hand, are struggling to maintain last week’s momentum. Energy stocks are down 2% in early trading and WTI crude oil is down over 4% to $46.80/barrel. The dollar is stronger this morning and commodities are sharply lower. Bond yields are also lower. The 5- and 10-year Treasury yields are trading around .94% & 1.37%, respectively. And by the way, German Bund yields are down to all-time lows. So currencies and yields are telling you the stock market won’t likely break out to new highs in the near term. 


*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 30, 2016

The major stock market averages are higher in early trading (Dow +53 pts; SPX +.58%). So this is the third consecutive day of recovery for stocks following the Brexit smack-down. In fact, the SPX has now retraced most of that beating. At the moment, all ten major sectors are in the green, led by consumer staples and industrials. But this is not an all-out risk-on day because the defensive sectors are really holding their own. This indicates that investors’ appetite for safer dividend-paying stocks is not waning. 


*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 27, 2016

The major stock market averages fell at the open (Dow -255 pts; SPX -1.8%). Materials, financials, energy, tech and industrials are leading the market lower. Telecoms and utilities are the only sectors in the green. Overnight, Asian markets were mixed and at the moment European markets are poised to close down by 2-3%. Today’s dip is largely expected, coming on the heels of a 3.6% dip in the SPX Friday in the wake of the “Brexit” vote. Commodities are mixed, with oil and copper lower and gold up nearly 5%. WTI crude oil is trading down to $46.30/barrel. Bonds continue to head lower as global investors pour money into “safe haven” assets. The 5 and 10-year Treasury yields are down around 1.0% and 1.48%, respectively. That’s the lowest 10-year yield going back to July 2012.


*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 24, 2016

Stocks fell today in response to the Brexit referendum result as 52% of voters called for separation of the UK from the European Union. The news initially rattled the stock, currency, and bond markets as volatility spiked and investors embarked on a ‘flight to safety,’ seeking to reduce risk while they assessed the damage. The panic, however, has gradually subsided as stock prices in the U.S. remain steady after inching higher from the lows seen at today’s open.

The Dow Jones is down 563 points while the S&P lost 70 points (approx. 3%). As demand for U.S. government surged overnight, U.S. Treasury yields on the 5-year fell to 1.094%. The 10-year dropped to 1.580%. Gold prices surged 4.61% to $1,321.30 per ounce. U.S. markets fared better than their European counterparts. The German DAX index shed 6.82% while the French CAC index dropped over 8%.

Investors did not take Britain’s decision to depart from the EU lightly. As the result was announced, the FTSE 100 Index fell as much as 8.7%, the most since 2008. In addition, the British pound dropped as much as 11%, bringing the currency to its weakest point since 1985, according to Bloomberg. Furthermore, S&P Global Ratings has signaled that the UK will lose its AAA credit rating. Hardest hit, however, were the European banks with Barclays’ stock currently down 20.66% and the Royal Bank of Scotland falling 24.17%.


*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 21, 2016

Stocks closed relatively flat today with the Dow Jones up 24.86 points and the S&P higher by 0.27%. Bond yields for the 5 and 10-year Treasuries are slightly higher with yields of 1.2002% and 1.7094%, respectively. Oil prices are lower with WTI Brent Crude down 1.05% at 48.95 a barrel.

Investors remain focused on the upcoming June 23rd Brexit referendum in which British, Irish, and Commonwealth citizens, among others, will decide whether the UK stays with or leaves the EU. Surveys show that the two sides are neck and neck and no particular outcome is certain at this point.

The “remain” supporters cite the relative strength of staying within the group consisting of 28 member countries. They also applaud the benefits of free travel, free trade, and inward investment amongst the members. The “leave” side maintains that the UK pays billions of pounds for its membership in the EU with little to show in return.


*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 10, 2016

The major stock market averages fell this morning. The Dow and SPX are currently down 95 pts & .8%, respectively. Most sectors and industry groups are lower in early trading, except for telecoms and tobacco. Banks, transports, oil & gas and semiconductors are down over 1%. The VIX Index continues to climb, now at 16, but still isn’t concerning. The dollar is up on the day and commodities are a bit lower. WTI crude oil is down to $49.60/barrel and it looks like stocks are still following oil around like ducklings after a mother duck. Traders are also focused on bond yields, and today German & Japanese sovereign bond yields took another step down to record lows. US Treasury yields also fell; the 10-year yield is down to 1.65%, testing a multi-year support level. 


*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 6, 2016

The major stock market averages are sharply higher in early trading (Dow +114 pts; SPX +.5%). Gains are widespread, with biotechs, materials, banks and energy names leading the way. Despite weak factory orders in Germany, European stock markets are poised to close higher this morning. Commodities are broadly higher, with WTI crude oil rebounding to nearly $50/barrel. The industrial metals are also coming back, with iron ore up over 3% and copper up about .7%. Bonds are selling off a bit after surging on Friday. The 5- and 10-year Treasury yields ticked up to 1.26% and 1.73%, 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.