Chinese Yuan

CHINA'S CENTRAL BANK STABILIZES GLOBAL STOCK MARKETS

Stocks opened sharply higher this morning (Dow +197 pts; SPX +1.4%). All eleven major market sectors are in the green, led by tech (+1.9%), materials & consumer discretionary (+1.7%), and communications services (+1.5%). In fact, the SPX has now recovered 50% of its recent decline. The VIX Index collapsed back to 17.6 as jittery traders breath a sigh of relief. Near-term, it looks like Monday’s SPX correction low was successfully re-tested yesterday. But make no mistake, we’re not out of the woods when it comes to volatility. Remember, President Trump’s new round of trade tariffs is scheduled to take effect at the beginning of September. For the moment, however, everything looks rosy. European markets closed up by more than 1%, and Asian markets are also up overnight. Commodities are rebounding today, paced by a sharp recovery in oil prices. WTI crude is up 3% to trade around $52.60/barrel. The bond market about-faced as well. Junk bonds, which sold off by 2% early this month, are now recovering. Treasuries and high-grade corporates, however, are selling off after a monster run. The 10-year Treasury Note yield, which collapsed from 2% to 1.71% in a matter of a few days, ticked up 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.

TROUBLE WITH TRADE

The major stock market averages gapped down at the open after news that US-China trade talks are breaking down. The Dow is currently down 220 pts and the SPX is down .95%. Consumer discretionary, industrials, tech and materials sectors are all down more than 1%. The VIX Index spiked briefly to 19 before falling back to 16. WTI crude oil dipped slightly to $61.60/barrel. The US dollar strengthened and gold is modestly higher today. Bonds are trading higher (except for junk). The 10-year Treasury yield fell back to 2.48%.


*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.