Disney (DIS)

HEALTHCARE ROUT

Stocks opened a bit lower this morning (Dow -23 pts; SPX -.2%). The healthcare sector is down nearly 2% today and 5.5% so far this month. The direct cause is fear over the rise of socialism in Congress. See yesterday’s update for more details. The real estate sector is down 1% today and 2.7% this month after having climbed over 17% during the first quarter. Semiconductor stocks are up over 1% after Apple (AAPL) and Qualcomm (QCOM) finally settled their legal battle over intellectual property. The energy sector is up about .5% after a report showing lower than expected crude stockpiles in the US. Commodities are mixed. Copper is now up 14% this year and a good portion of that has to do with China stimulating its economy. WTI crude is flat on the day at $64/barrel. Bonds are trading pretty flat as well. The 10-year US Treasury yield is hovering around 2.59%.


*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.

EARNINGS SEASON KICKOFF

The major stock market averages gapped up at the open. The Dow is currently up 200 pts and the SPX is up .4%. The financial sector surged 1.5% on better than expected quarterly results by Wells Fargo (WFC) and JP Morgan (JPM), which kicked off earnings season today. Most other sectors are also trading higher, except real estate and healthcare. Commodities are mixed—oil is moving higher but copper and iron are in the red. Gold is flat today, and so far this year. WTI crude is back up over $64/barrel. Chevron (CVX) announced a deal to acquire Anadarko (APC), and investors are wondering if this is the beginning of a wave of consolidation in the industry. Bonds are trading mostly lower as yields tick higher. The 10-year Treasury yield is back up around 2.54%. If earnings season proves better than Wall Street is forecasting, you can bet interest rates & bond yields will move higher.


*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.

IGNORE WASHINGTON, WATCH EARNINGS

IGNORE WASHINGTON, WATCH EARNINGS

Stocks opened modestly lower this morning (Dow flat; SPX -.25%; Nasdaq -.4%). Exchange trade volume is low. The communications services sector is down 1.5%; REITs are down .75%; energy is off .3% and banks are down .2%. Semiconductors are bucking the trend, however (see below). As I mentioned yesterday, The VIX Index has collapsed back to 15; traders are no longer as fearful, but they’re wondering how far this V-shaped recovery can go before the market needs to step back and consolidate. After all, the SPX has now retraced nearly ¾ of its late 2018 correction. Commodities are trading mostly higher—with the notable exception of gold. WTI crude oil is back up around $54.10/barrel and it looks like the path of least resistance is up. Copper is now up 9% on the year, which is odd since China’s economy is said to be losing steam. Further, iron ore is up around a 2-year high and Barzil’s Vale SA (VALE) just warned of a global shortage. That doesn’t square with the consensus narrative that global economic growth is falling. So either global growth is better than we’ve been hearing, or China is pushing fiscal stimulus in a big way this year. Usually those two move together. Bonds are roughly unchanged this morning. The 5-year and 10-year Treasury yields are hovering around 2.50% and 2.69%, 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.

September 20, 2018

he major stock market averages gapped up again at the open. The Dow is currently up 240 pts and the SPX is up .68%. Ten of eleven sectors are in the green, led by tech (+1%), materials (+1%) and consumer staples (+1%). Only energy is stalling. The VIX Index just fell back under 12 despite the fact that we’ve had no good news on the trade war front. European stock markets are poised to close up nearly 1%. Asia was mixed overnight. The dollar is falling against a basket of foreign currencies and that’s allowing emerging markets equities to continue yesterday’s rally. Commodities are mixed today. WTI crude oil is unchanged at $70.95/barrel. Copper and gold are also flat on the session. Bonds are mixed after a 3-week selloff. The 5-year Treasury yield ticked up to 2.95% today. The 10-year yield is unchanged at 3.06%. Junk bonds have been performing better than Treasuries or investment grade corporates all year, and today is no exception.


*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 13, 2018

Stocks opened modestly higher (Dow +12 pts; SPX +.1%). Telecoms are down over 3% in early trading as a result of yesterday’s court decision on AT&T (sell below). That’s a one-time hit. But retailers, semiconductors and healthcare stocks are in the green. The VIX Index continues to slide toward 12 and VIX July futures are down around 13.7. It’s safe to say the recent stock market correction has been resolved even though we’re not yet back to all-time highs. Commodities are mostly higher today (gold, copper, iron ore, oil). WTI crude oil is hovering around 66.50/barrel. Bonds are ever so slightly higher on the day. The 5-year and 10-year Treasury yields are hovering around 2.81% and 2.95%, respectively. The Federal Reserve’s monthly policy meeting will wrap up today, however, so you can expect some interest rate volatility.


*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, 2018

Stocks opened mixed this morning (Dow -18 pts; SPX +.27%). The energy sector is leading (+1.8%) after WTI crude oil spiked over $70/barrel for the first time since Nov. 2014. Industrials, financials and materials are up a bit. The defensives and interest rate sensitive sectors are falling as rates head higher. Utilities are down .9% after falling more than 2% yesterday. The VIX Index is down around 14.3, suggesting low expected volatility over the next 30 days. For the past three weeks, the dollar has been rising, which reverses the 16-month down-trend. This move coincides with rising expectations for more Federal Reserve interest rate hikes. Bonds are selling off again today. The 5-year Treasury yield is up around 2.83%. The 10-year yield ticked up to 3.0%.


*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 28, 2018

The major stock market averages rebounded this morning (Dow +21 points; SPX +.14%). The cyclical sectors (tech, financials, and consumer discretionary) are leading the way after a positive GDP report. The VIX Index is back down today to trade at 17.7 and VIX March futures are now at 17.5. So there’s still a little edginess among traders about inflation’s impact on the stock market this year. European markets are poised to close modestly higher, but Asia was mostly down overnight. That’s because China’s official manufacturing business activity index (“PMI”) fell to 50.3 in February. Economists expected to see 51.1. The implication is that a large swath of China’s economy stagnated this month. Partly as a result, the dollar is stronger today. Commodities are mixed. Not surprisingly, copper is down 1.5% as it tends to move with China’s economic outlook. WTI crude oil is down 1% to trade around $62.30/barrel. Bonds are slightly higher in price, lower in yield. The 5-year and 10-year Treasury yields are hovering around 2.67% and 2.89% at the moment. Lately, whenever the 10-year moves closer to 3%, the stock market retreats, and when it falls back toward 2.8% stocks rise. 


*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 14, 2017

Stocks gapped up again today, but quickly fell flat (Dow +1 pt; SPX flat). The tech sector is trading higher, but telecoms, materials and healthcare are in the red. The VIX Index is trading down to 9.8. European markets are poised to close .3% lower. The dollar is a bit stronger against the Euro after the European Central Bank (ECB) said Eurozone inflation will remain low for the foreseeable future. In other words, there is no reason to rush toward reducing monetary stimulus. Commodities are trading mixed. WTI crude oil is holding steady at $57.75/barrel. Bonds prices are slightly lower today. The 5-year Treasury note yield is up toward 2.15%. The 10-year yield is back up to 2.37%. In fact, the 10-year has been trading in a very tight range of 2.32% to 2.40% for the past month. Yesterday, the Federal Reserve’s Open Market Committee raised its short-term policy interest rate by .25% to a target range of 1.25% to 1.50%. The move was widely expected. And by the way, the Fed lowered its forecast for unemployment in 2018 to just 3.9%. 


*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 5, 2017

Stocks opened mixed this morning (Dow flat; SPX +.28%). The tech sector is bouncing back (+1%), and banks are rising on tax reform expectations. On the other hand, utilities and telecoms are in the red. The VIX Index is back down around 10.8 and VIX December futures are trading down to 11.45. So yesterday’s mini volatility spike is fading. The dollar is a bit stronger today (but still down 8% this year) and commodities are lower. WTI crude oil is flat around $57.50/barrel. Copper is down 4% after Bloomberg News reported China is poised to slow investment in infrastructure next year. Chinese leaders managed to boost economic growth in 2017 with a 20% increase in spending on roads, bridges, subways, etc. Economists are expecting that growth rate to fall in half near year. Bonds are following the trend of recent days. Shorter term bonds are selling off but longer term bonds are holding steady. The 5-year Treasury note yield is up around 1.26%, a fresh multi-year high. The 10-year Treasury yield, on the other hand, is unchanged at 2.37%. The difference between the 2-year and 10-year yields is the smallest since late 2007. 


*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 4, 2017

The major stock market averages opened higher this morning (Dow +225 pts; SPX +.57%). Over the weekend the US Senate narrowly passed its tax reform bill, clearing the way for a conference committee to iron out differences with the House’s own bill. Value is performing better than growth today. Banks and telecoms are up over 2% in early trading. Retailers and transports are up between 1.5% and 2.5%. None of these groups has led the SPX this year, so we’re seeing a bit of catch-up. The tech sector, up over 30% this year, is taking a breather. European markets are poised to close up over 1% and Asia was mixed overnight. The dollar is stronger against a basket of foreign currencies and commodities are mostly lower. WTI crude oil is down 1% to trade at $57.70/barrel. Shorter-term bonds are selling off this morning. The 5-year Treasury yield rose to 2.15%, the highest since the spring of 2011. The 2-year Treasury yield is up around a nine year high. Longer term bonds, on the other hand, are pretty flat. The 10-year Treasury yield is hovering around 2.39%. So the yield curve is flattening again and that’s a caution flag. 


*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 10, 2017

Stocks opened lower again this morning (Dow -40 pts; SPX -.18%). The reason: “Doubts swirl on tax overhaul” according to Bloomberg. In the middle of yesterday’s session, the SPX briefly fell 1.18% from its recent all-time high, then recovered. Famed investor Mario Gabelli pointed out that a “1% correction is not a big event,” and if interest rates stay below 2.5%, the market can continue rallying for another “year or two.”  Bank of America/Merrill Lynch says yesterday’s rout was a “dress rehearsal, not the Big One.” The firm notes “insane gains” this year, especially within the tech sector, and one can expect a pullback. The firm says a full stock market meltdown would “require recession risk or moves higher in wage inflation, bond yields, and volatility or credit spreads.” They don’t see that 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.

September 7, 2017

Stocks opened modestly lower this morning (Dow -41 pts; SPX -.13%). A 2% slide in bank stocks is holding the market back. Gold miners are up 2% in early trading. A host of other industries—semiconductors, retailers, transports, pharmaceuticals, utilities, real estate—are trading higher as well. WTI crude oil is trading down slightly to $49/barrel as Hurricane Irma approaches Florida. Bonds are trading higher as yields plunge. The 5- and 1-year Treasury yields are down to 1.63% and 2.04%, respectively. Yields haven’t been this low since the day after the presidential election. This is the proximate cause of the decline in bank stocks today.


*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 9, 2017

Stocks opened lower today (Dow -67 pts; SPX -.27%). President Trump and North Korea’s less-than-stable dictator are practicing some nuclear brinksmanship. Real estate & healthcare are the only sectors not in the red. The consumer discretionary sector is down .9% mostly due to Disney (see below). The VIX Index is up a bit to trade around 11.7 and VIX September futures are trading up around 13. Those are still pretty tame levels though. WTI crude oil is up slightly to $49/barrel. Gold is up .8% today (and 10% so far this year). Bonds are higher in price, lower in yield. The 5- and 10-year Treasury yields are current at 1.78% and 2.22%, respectively. Geopolitical events tend to result in lower bonds yields. 


*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 10, 2017

Stocks opened mixed this morning (Dow -12 pts; SPX flat). Healthcare (especially biotechs), industrials and consumer discretionary sectors are dragging on the market. On the other hand, energy stocks are trading sharply higher as oil prices rebound. The VIX Index, which measures investor fear, is now at extreme lows, trading around 9.8. The last time the VIX traded under 10 was the end of 2006. So hedge funds and high-frequency traders are really wringing their hands. WTI crude oil is up 3.9% this morning to trade around $47.60/barrel. Other commodities (gold, iron ore, copper) are modestly higher as well, but have really taken a beating this month. In fact, copper is down 12% from its February peak, presumably on softer economic data out of China. Bonds are trading a bit higher today after a 3-week slide. The 5- and 10-year Treasury yields are hovering around 1.91% and 2.38%, respectively. And by the way, junk bonds continue to power ahead. The SPDR Barclays High Yield Bond ETF (JNK) is up 3.2% so far this year. 


*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 28, 2016

tocks gapped up at the open but quickly gave way this morning. The Dow and SPX are currently down -18 pts & -.2%, respectively. Telecoms, utilities and healthcare stocks are down the most. The energy sector is up a bit as oil prices stabilize. WTI crude oil is trading flat at about $44.70/barrel. Bonds are mostly unchanged. The 5- and 10-year Treasury yields are hovering around 1.12% and 1.55%, 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.

August 10, 2016

Stocks opened lower this morning (Dow -33 pts; SPX -.3%). Banks, biotechs and semiconductors are dragging but retailers, social media and materials stocks are in the green. For the year-to-date period, the SPX is up 8% (total return) and small-caps (Russell 2000 Index) are up 9%. The dollar is weaker and commodities are broadly higher. Copper is up nearly 2% and gold is now 26% higher than it was at the beginning of the year. WTI crude oil is down a bit this morning on higher inventories to $42.40/barrel. And bonds are mostly higher. The 5- and 10-year Treasury yields are down to 1.08% and 1.52%, respectively. In terms of total return this year, long-term Treasury bonds are up about 6.5% and junk bonds are up nearly 6%. 


*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 18. 2016

Stocks gapped down at the open but quickly recovered. The Dow and SPX are currently up 70 pts & .4%, respectively. The Dow is very close to hitting 18,000, and the only sectors in the red are utilities and materials. The VIX Index is down under 14, suggesting very little volatility in the next 30 days. WTI crude oil is down 2.5% to $39/barrel this morning. Over the weekend, oil ministers met in Doha to discuss the possibility of freezing oil production levels. They failed to reach an agreement; Saudi Arabia says that unless Iran participates, it will not agree to a production freeze. And of course, we know that Iran is not willing to commit to a freeze. So the meeting was a non-event, although it did afford speculators a chance to create a little volatility in oil prices. Bonds are modestly lower today as yields tick higher (5-year Treasury yield at 1.23%; 10-year at 1.78%).


*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.