Stocks opened lower again today (Dow -40 pts; SPX -.3%). Gold miners and utilities are modestly higher, but most everything else is in the red. Real estate and telecom sectors are down .9%. Yesterday, the VIX Index spiked to 15.5 but today is back down under 15. VIX September futures are also around 15. CNBC points out that we’re not yet seeing a large selloff on big volume and that could be a sign of stability. In fact, a lot of professional investors are on vacation and exchange volume is very light. The dollar is weaker and commodities are mixed today. WTI crude oil is trading slightly lower to $46.95/barrel. Bonds are trading mostly higher in price, lower in yield. The 10-year Treasury yield is back down to 2.18%. And remember, at the beginning of the year the 10-year yield was near 2.5%. Since then, falling inflation expectations have resulted in lower yields. Alan Blinder, former Federal Reserve official, characterizes the dip in inflation this year as “mysterious.” Six months ago we had stable inflation, and now we’re seeing falling inflation. “What in the world happened?” He implied our methods for measuring economic activity may be flawed.
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