Federal Open Market Committee (FOMC)

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.

EARNINGS TO THE RESCUE

EARNINGS TO THE RESCUE

EARNINGS TO THE RESCUE

Stocks opened higher today after Apple’s (AAPL) earnings announcement (see below). The Dow is currently up 369 pts and the SPX is up 1%. Tech, industrials and consumer discretionary sectors are leading the way, up over 1% in early trading. In particular, AAPL is up 4.7% and Amazon (AMZN) is up 3.4%. The VIX Index—a common fear gauge among traders—is still hovering around 19 where it has been for the past couple of weeks. With every passing day it seems more likely that Christmas Eve was the correction bottom. Commodities are trading mostly higher today. WTI crude oil is back up around $54.70/barrel and you can expect it to keep going in the near term. Bonds are mixed; Treasuries are down but junk bonds are higher on the day. The 10-year Treasury yield is hovering around 2.73% and has been pretty tight to that level over the last two weeks. The yield curve is still flattish but hasn’t inverted yet. By the way, Fed Chair Powell is scheduled to hold a press conference today discussing the FOMC’s monthly policy meeting.


*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 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.

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.

August 1, 2018

August 1, 2018

Stocks opened higher but quickly faded after Apple earnings and a positive jobs report from ADP. The Dow is down 62 pts and the SPX is down .15%. Tech, telecom and healthcare sectors are in the green. On the other hand, utilities, industrials and energy sectors are down over 1% in early trading. Oil prices sank below $68/barrel after the EIA said US oil stockpiles rose unexpectedly last week. That’s temporary; we know that gasoline demand is very high in the US. In addition, Reuters reports OPEC oil production rose to an 2018 high in July. Bonds are falling in price as yields tick upward. The 5-year Treasury yield rose to 2.88% and the 10-year rose to 3% on the ADP report (see below).


*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.