Fed-funds interest rate

TRADE UNCERTAINTY COMING HOME TO ROOST

Stocks sank at the open on weaker economic data, but quickly recovered on hopes of another Federal Reserve rate cut. The Dow is currently up 50 pts and the SPX is up .5%. Lower interest rate expectations immediately drove the real estate sector higher (+1%), and the financial sector lower (-.4%). Commodities are following recent trend, with gold up .6% this morning and WTI crude oil down 1% to $52.10/barrel. We’ve seen significant volatility in oil this year, with a wide trading range of $46-$66/barrel. In the face of increased US oil production and the trade war, geopolitical events—Iran-sponsored terrorist attacks—haven’t been able to prop up oil they way they used to. Bonds are trading higher again this morning. The 10-year US Treasury yield fell back to 1.54%. Believe it or not, the yield curve has steepened. That is, the difference between the 10-year and 2-year Treasury yields has risen to +15 basis points, from -5 basis points five weeks ago. Steepening has been caused by falling short-term interest rates (i.e. Fed rate 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.

MR. POWELL'S WILD RIDE

Stocks gapped up at the open during Fed Chair Jerome Powell’s congressional testimony this morning. The Dow is currently up 78 pts and the SPX is up .33%. But don’t expect the rally to last—and make no mistake, earnings season will trump any Fed rate cut in terms of influencing the direction of the stock market. At the moment, most sectors are in the green, led by energy and tech. Financials are down along with interest rates today. Crude oil, copper and gold are all up. WTI crude jumped 3% to trade around $59.50/barrel, right around the 2-month high. Bonds are rallying after Mr. Powell hinted at a rate cut (see below). The 10-year Treasury yield dipped to 2.04%.


*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.

THE UPWARD MARCH CONTINUES

The major stock market indexes opened higher this morning ( Dow +151 pts; SPX +.5%). Consumer discretionary is the leading sector (+1.2%) on strength in its major constituents Amazon (AMZN) & Home Depot (HD). Semiconductor stocks are also up about 1.3%. Most other sectors are participating, save utilities and real estate. Those two groups recently achieved all-time highs and so some give-back is to be expected. WTI crude oil is down a bit to trade around $58.90/barrel after yesterday’s sharp rally. OPEC decided to continue established production cuts through June. Cuts by OPEC late last year are helping to balance global demand and supply even though US producers are steadily ramping production levels. Bonds are trading lower today as yields tick higher. The 10-year Treasury yield edged back up to 2.61%. We should perhaps expect some rate volatility around the Fed announcement tomorrow.


*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.

WALL STREET MORE OPTIMISTIC

Stocks opened mixed. The Dow is currently down 30 pts but the SPX is flat. Utilities, real estate, and communications services sectors are down somewhere between .6% and .9%. On the other hand, financial and energy sectors are up over 1%. The VIX Index jumped up to 13.5 today—still considered pretty low. Remember, the fear gauge spiked above 35 last December during the bear market correction. Investor fear, as measured by options trading activity, is near a 5-month low. Commodities are trading slightly higher today. WTI crude oil rose to $59/barrel, the highest level in 4 months. Oil has now retraced 50% of its massive plunge during the last quarter of 2018. An OPEC committee recommended deferring a decision on whether to extend current production cuts. Those cuts are what allowed oil to begin recovering in January. Bonds are mixed today, with Treasuries up slightly and corporate bonds a bit lower. The 10-year Treasury yield is hovering around 2.60%, the lowest level since January 3rd.


*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 20, 2018

December 20, 2018

Stocks sagged at the open again today following another interest rate hike by the Federal Reserve (see below). The Dow is currently down 367 pts and the SPX is down 1.5%. This looks like another risk-off day, with cyclical sectors like tech, energy, and consumer discretionary sectors down the most. The utilities sector is up 1% as retail investors look for safety. European markets are down more than 1% and Asian markets were down at least that much overnight. The dollar is weaker today after the Federal Reserve downgraded its outlook for US economic growth (see below). Copper and gold are trading higher, but WTI crude oil fell back to $46.20/barrel. Believe it or not, most of the bond market is trading lower as well. High-grade corporates and junk bonds resumed their slide. Long-term Treasury bonds, however, are moving higher in response to the Fed meeting. The 10-year Treasury note yield is hovering around 2.77%, the lowest level since April.


*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 19, 2018

Stocks surged at the open this morning, but who knows how the session with end? The Dow is currently up 175 pts and the SPX is up .68%. A few market sectors are up about 1%: energy, financials, materials. Most everything is trading higher, save gold miners and semiconductors. European markets are up about .3% to .9%, although Asia was mixed overnight. WTI crude oil, which has fallen out of bed since early October, is up 3% to about $47.65/barrel. OPEC says it will reduce production by about 1.2 million barrels per day but those cuts won’t go into effect until next month. At the moment, production in the US, Russia and Saudi Arabia is near record levels. Bonds are trading modestly higher in front of the Fed meeting today (see below). Since early November, bonds have done very well and that of course means interest rates have fallen. The 2-year Treasury note tends to move along with expectations for Fed rate hikes, and since November 8th the 2-year yield has declined to 2.66% from 3.1%. That probably means bond traders are predicting a pause in monetary tightening.


*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 18, 2018

December 18, 2018

Stocks opened higher this morning (Dow 243 pts; SPX .5%) in an attempt to recover from yesterday’s rout. A number of market sectors are up about 1%: industrials, real estate, materials, communications services and consumer discretionary. Energy stocks are down following oil prices. WTI crude oil fell to a 15-month low after a report that global oil production is rising. European stock markets closed down about .7% and Asian markets were down overnight. China’s Shanghai Composite Index is down 22% so far this year in local currency terms (or about 26% in dollar terms). Commodities are mixed in early trading. As mentioned, WTI crude oil is down around $47/barrel (down 36% since early October. Consensus Wall Street opinion is that global oil demand is just fine, but supply is temporarily too high. As I’ve mentioned before, there is a lot of room for traders and governments to manipulate oil prices. Bonds are mixed in early trading. Treasury bonds are rising but junk bonds are falling in price. The 5-year and 10-year Treasury note yields are back down to 2.67% and 2.83%. Remember last summer when traders were freaking out over rising interest rates? They feared higher mortgage & auto loan rates and worried incessantly that the Federal Reserve would have to keep hiking rates to keep pace. Well, those concerns seem in the distant past now. We’re all wondering what the bond market’s massive volatility is trying to tell us.


*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 7, 2018

December 7, 2018

Stocks headed lower again today (Dow -550 pts; SPX -2%). Ten of 11 major market sectors are down, led by tech (-3.1%). Utilities is the only bright spot +.6%). The VIX Index is back up to 24. WTI crude oil shot up toward $52.60/barrel after OPEC agreed to cut back oil production targets. Globally, oil is temporary over-supplied due to geopolitical events and government manipulation. Crude tumbled from roughly $76/barrel to $50/barrel in just 2 ½ months. Bears are taking this as a sign of an economic slowdown.


*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 6, 2018

November 6, 2018

Stocks opened higher again today as voting gets underway. The Dow is currently up 114 pts and the SPX is up .4%. Most major market sectors are in the green, led by materials (+1%) and industrials (+1%). Those two groups are widely seen as the primary beneficiaries from a potentially split congress that may only be able to agree on higher infrastructure spending. In addition, the fact that stocks are rising seems to suggest that the “Blue Wave” won’t show up at the polls. Further, if investors sniffed a return of Democratic control in both the House and Senate, you’d at least see healthcare stocks falling today. The point is, market action is telling us what investors expect: gridlock. The VIX Index is still hovering around 20, but VIX December futures fell to 18.5 today. So the options market doesn’t seem to expect a continuation of the stock market correction. We’ll see. Commodities are trading mostly lower today. WTI crude oil fell 2.4% to $61.60/barrel after President Trump granted Iran a trade sanction waiver. Bonds are trading modestly lower as interest rates tick higher. The 5-year Treasury yield is back up around 3.04% (the 2018 high is 3.07%). The 10-year yield is trading at 3.21% vs. the 2018 high of 3.23%.


*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 18, 2018

October 18, 2018

Stocks gapped down at the open today (Dow -280 pts; SPX -1.27%). Tech, telecom and consumer discretionary sectors are all down more than 1.5%. Utilities and real estate sectors are up slightly. So today’s risk-off trading session flips the switch from yesterday’s risk-on bent. Th VIX Index bounced back up to 18.7 today. European markets will close a bit lower and most of Asia was down overnight. The dollar is strengthening a bit on China concerns (see below). Commodities are mostly lower in early trading, with WTI crude oil pulling back under $70/barrel. Bonds are trading modestly higher as you would expect on a risk-off day. The 5-year and 10-year Treasury note yields edged down to 3.03% and 3.17%, 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 27, 2018

September 27, 2018

Stocks surged at the open (Dow +159 pts; SPX +.66%) following yesterday’s Federal Reserve interest rate hike. I don’t see any good reason for the rally and wouldn’t be surprised to see it selloff this afternoon. At the moment, ten of eleven major market sectors are in the green, led by the newly renamed Communications Services sector (+1.2%). Utilities are also rebounding 1% and the tech sector is up .7%. European markets are also broadly higher by about .5% although Asia was down overnight. After the Fed meeting (see below), the dollar shot up .6% vs. a basket of foreign currencies. That is putting a lid on commodity gains. Copper, gold, and iron ore are lower on the day. WTI crude oil, however, is back up over $72/barrel. Bonds are, not surprisingly, selling off. The 5-year and 10-year Treasury yields are back up around 2.96% and 3.07%, 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 26, 2018

September 26, 2018

The major stock market averages opened higher this morning (Dow +49 pts; SPX +.24%). Consumer discretionary, healthcare and telecom sectors are leading the way (+.7%). Strangely enough, financials are sagging in front of the Federal Reserve’s interest rate announcement later this afternoon. In addition, energy and materials sectors are in the red. The dollar is trading slightly higher and commodities are mostly lower. WTI crude oil is back under $72/barrel. Gold is down .5% today and 8% so far this year. Despite a likely interest rate hike later today, the bond market is holding its own. The 5-year and 10-year Treasury yields are hovering at 2.98% and 3.09%, 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.

June 14, 2018

The major stock market averages gapped up at the open, but quickly faded. The Dow is currently flat and the SPX is up .25%. The Nasdaq is up .7%. The financial sector is down nearly 1% despite the Federal Reserve’s rate hike yesterday (see below). That’s quite a surprise. Utilities, telecom and real estate sectors, on the other hand, are up about 1% in early trading despite better economic data. European stock markets are surging today after the European Central Bank’s policy meeting (see below). The dollar is stronger today against a basket of foreign currencies and not surprisingly, commodities are mostly trading lower. WTI crude oil is down modestly to $66.50/barrel. Bonds are trading up modestly. The 5-year Treasury yield is pretty much unchanged at 2.82% but the 10-year Treasury yield ticked down to 2.95%. So the yield curve is flatter today. This is not at all what I expected to see this morning. What we have today is a tug-of-war between various powerful forces in the market. CNBC’s Rick Santelli characterized this market action as “incongruent.”


*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 2, 2018

Stocks gapped down at the open this morning. The Dow is currently down 101 pts and the SPX is down .4%. The consumer staples sector—now the worst performer of 2018—is down 1.4% in early trading. Telecoms and the healthcare sector are off about 1%. Energy and tech are trading modestly higher. The VIX Index sank to 15 today (2-month low), suggesting that while choppiness is the order of the day investors don’t expect a big move lower. Commodities are mostly higher, led by copper and iron ore. WTI crude oil is up slightly to trade around $67.40/barrel (near 3+ year highs). Bonds are also modestly higher in price, lower in yield today. The 5-year Treasury yield is at 2.82% and the 10-year is hovering around 2.97%. Everyone is waiting for the Fed announcement later today. Consensus says the Fed won’t raise its short-term policy interest rate, but many are expecting the statement to sound more hawkish.


*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 21, 2017

Stocks opened modestly lower this morning (Dow -37 pts; SPX -.15%) after nine straight days of gains. Telecoms are down after strong gains in the first half of the month. Semiconductors are down .5% and retailers are down .3%. On the other hand, banks are trading higher after yesterday’s Fed meeting. In fact, the KBW Bank Index is up 8% over the last two weeks responding to higher interest rates. The dollar is weaker today against a basket of foreign currencies, which usually means commodities are trading higher. But not today. Copper is down 1% (and 6% so far this month); gold is down .5%; iron ore is down 15% this month. WTI crude oil is trading flat today around $50.60/barrel. Bonds are mostly unchanged this morning. The 5-year and 10-year Treasury yields are hovering around 1.88% and 2.27%, respectively. The 2-year Treasury, which correlates more with Fed policies, is up to a nine-year high.


*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 26, 2017

The major stock market averages climbed briefly at the open, but quickly turned around. The Dow is up 40 pts, the SPX is up .2% and the Nasdaq is flat. “Waffling” has become a consistent pattern throughout June, according to CNBC’s Jim Cramer. “The market can’t make up its mind.” In addition, we’re seeing huge dispersion of returns from sector to sector, and from stock to stock.  For example, healthcare is screaming higher (+6%) this month, while energy has sagged .5%. And even within the energy sector, Chevron (CVX) is up 1.3% this month but Schlumberger (SLB) is down 5%. Mr. Cramer rightly points out that “nothing is trading in unison.” The VIX Index continues to trade near record lows (below 10 today), but while the SPX looks like it is simply treading water, there is a lot going on under the hood. 


*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 3, 2017

The major stock market averages opened lower this morning (Dow -32 pts; SPX -.14%). Biotechs and banks are up modestly, but the rest of the landscape is flat to down. The VIX Index sank back down to 11.3 today; there really isn’t much fear among investors at the moment. The dollar is weaker and commodities are mixed. Gold is down today but up about 6% so far this year. WTI crude oil is up 1% to trade around $53.20/barrel. Bonds are lower pretty much across the board. The 5- and 10-year Treasury yields shot up to 2.05% and 2.51%, respectively. Those yields are at 2-month highs. The 2-year Treasury, which closely follows Federal Reserve rate hike expectations, has jumped to its highest level since late 2008. 


*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 2, 2017

Stocks opened lower this morning (Dow -52 pts; SPX -.47%). Just about every sector group is in the red after yesterday’s monster rally.  Only utilities are in the green (+.4%). And by the way, in terms of price momentum, some of the cyclical sectors (financials, energy, industrials) have been weaker over the last month, whereas the defensives (consumer staples, utilities) have been stronger. But that trend may not be durable if interest rates continue to rise. Today, the dollar is a bit stronger and commodities are lower. WTI crude is down 1.6% to $52.95/barrel. Copper, gold and iron ore are all lower. Bonds are selling off as yields head higher. The 5-year Treasury yield spiked to 2.02% and the 10-year yield jumped 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.

February 28, 2017

Stocks opened lower this morning, just like the last two trading sessions. The Dow is flat, the SPX is down .14% and the Nasdaq is down .3%. Once again, the defensive sectors (utilities, consumer staples) are faring better than the cyclicals. The VIX Index is trading up around 12.2 and VIX March futures are trading up to 13.3. So the fear gauge is picking up just a tiny bit. The dollar is weaker today and has really sold off since mid-December. That’s helping commodities tread water or even rise a little. WTI crude oil is down this morning to $53.40/barrel. Remember, a year ago oil was under $30/barrel. Bonds are mostly unchanged today. The 5-year and 10-year Treasury yields are hovering around 1.85% and 2.35%, respectively. And I would argue the bond market isn’t yet signaling that a March Fed interest rate hike is imminent. 


*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.