Core CPI

EARNINGS SEASON KICKS OFF

Major US stock market averages opened mixed this morning. The Dow is currently 28 pts and the SPX is down .2%. The Nasdaq is also down .2%. Industrials (especially transports) and materials sector stocks are rallying. On the other hand, utilities and real estate are down on a bump in interest rates. Commodities are mixed; gold and iron ore are down, but oil continues to recover. WTI crude oil is hovering around $60/barrel. It was trading down around $51/barrel one month ago. Bonds are selling off a bit today on rising interest rates. It seems like the better-than-expected jobs report back on July 5th marked a turnaround in rates. The 10-year Treasury yield has risen to 2.13% from 1.95% since then.


*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.

FOCUS ON INFLATION & THE FED

Stocks opened mixed this morning (Dow -13 pts; SPX +.2%, Nasdaq +.5%). The best performing groups in early trading are semiconductors and biotechs, both up about 1%. Banks are being dragged down by the theatrics of congressional testimony by major bank CEOs today. Retailers and industrials are also down a bit. The dollar is stronger against a basket of foreign currencies after the European Central Bank (ECB) reiterated warnings over slower economic growth and said it plans no interest rate hikes in the foreseeable future. WTI crude oil bounced back toward $64.20/barrel today despite the stronger dollar. Bonds are trading higher as well. The 10-year US Treasury yield backed down to 2.4% after today’s economic reports (see below). The iShares 20+ Year Treasury Bond ETF (TLT) is up .27% and the iShares Investment Grade Corporate Bond ETF (LQD) is up .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.

DON'T BE MISLEAD BY NEWS HEADLINES ON THE ECONOMY

The major stock market averages opened lower today on the some disappointing retail sales data (see below). The Dow is down 107 points and the SPX is down .2%. The consumer staples sector is down over 1% after a weak earnings report from Coca Cola (KO). Financials are down over 1%, and industrials are down .6%. This could be the consolidation we’ve been expecting after a sharp rally in January. Commodities are mixed in early trading. WTI crude oil is unchanged around $54/barrel. Bonds are modestly higher in price, lower in yield. Longer-term Treasury notes—as measured by iShares 20+ Year Treasury Bond ETF (TLT)—are up about .5% today. TLT is flat on the year, whereas corporate bond ETFs are mostly higher so far in 2019. As you might expect on a day when stock prices are falling, junk bonds are also weak.


*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 13, 2018

September 13, 2018

Stocks opened higher today (Dow +142 pts; SPX +.5%). The tech sector (+1%) is leading the way, with semiconductor stocks up 2%. Remember, they’ll run with any optimism over the trade war with China. Consumer staples and financial sectors are down slightly in early trading. European markets will close mixed but China’s exchanges were up about 1% overnight. The dollar is a bit weaker today (and so far this month), probably in reaction to trade optimism as well as the CPI report (see below). WTI crude oil is down 2% to trade around $68.75/barrel. Bonds are trading up as interest rates fall back. The 5-year and 10-year Treasury yields are currently at 2.86% and 2.95%, 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.

April 11, 2018

Stocks opened lower this morning but quickly pared losses. The Dow and SPX are currently down 113 pts and .47%, respectively. Telecoms are down 1.4%, materials are down 1% and financials are down 1%. The energy sector, however, is up nearly 1%. The VIX Index is down a bit to 20.2. European markets are poised to close down modestly. The dollar is a bit weaker today and commodities are trading higher. WTI crude oil is up around $65.96/barrel, the highest in over three years. That’s because President Trump is threatening more missile strikes in Syria. Bonds are trading slightly higher on the day. The 5-year Treasury yields ticked down to 2.61% and the 10-year yield is trading at 2.78%. 


*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.

September 22, 2017

Stocks opened slightly lower again today (Dow -29 pts; SPX flat).  Utilities, real estate and healthcare are leading to the downside. Telecoms, industrials and energy are in the green, however, continuing a recent trend. The VIX Index still isn’t registering much fear, trading just under 10. European markets are poised to close slightly higher today. And by the way, just about all the major European stock indexes are up more this year than the SPX or Dow. The dollar is weaker again vs. a basket of foreign currencies, and is down about 10% so far this year. That doesn’t really fit well with the Fed’s expectations for rising interest rates over the next year. In other words, if the economy is improving and interest rates are rising, you would expect a stronger dollar. Part of the reason for the weaker dollar is that foreign economies are faring better this year. Bonds are trading a bit higher today after a two-week drubbing. The 5- and 10-year Treasury yields edged back down to 1.87% and 2.26%, respectively. But it really does look like the 10-year yield will move up to test resistance at 2.39% 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.

July 15, 2016

Stocks gapped up at the open but quickly faded. The Dow and SPX are currently flat & -.24%, respectively. Biotechs are leading the way, up over 1% in early trading. Most everything else is down. The VIX Index sank under 13 this morning and VIX August futures are trading around 16. Traders still aren’t quite sure this rally has legs in the near term. The dollar is stronger but commodities are not uniformly lower. Copper is up .5% and WTI crude oil is trading up around $46/barrel. Bonds are selling off again as yields head higher. The 5- and 10-year Treasury yields are up to 1.15% and 1.60%, respectively. Why? There is less pressure on European sovereign bond yields. The German 10-year Bund just climbed above 0% for the first time since June 24th. We got a Eurozone report on inflation, which rose .1% y/y. At least it’s positive. 


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

March 16, 2016

Stocks opened lower this morning but quickly turned around. The Dow and SPX are current up 8 pts & .1%, respectively. Energy, tech and financials are bouncing back, but the healthcare sector continues to languish. In fact, healthcare is the worst performing sector year-to-date despite the fact that earnings season confirmed solid revenue & earnings growth, which exceeded Wall Street expectations. Much of the recent weakness can be attributed to the presidential campaign. Politicians are eager to deride pharmaceutical and biotech companies and are calling for drug price cuts. 


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