Stocks gapped up at the open, continuing yesterday’s rally. The Dow is currently up 440 pts and the SPX is up 1.3%. The more cyclically sensitive sectors—industrials, financials, energy, tech—are up well over 2% in early trading. On the other hand, defensive sectors near all-time highs are selling off today (i.e. utilities, real estate). The VIX Index fell back to 16 and VIX October futures fell to 18. In other words, traders aren’t expecting a massive jolt of market volatility over the next 30-60 days. The reaction in commodity markets isn’t surprising: gold fell and copper rose. Even oil, which has had a hard time lately, is back up around $57.40/barrel in early trading. Bonds (except for high-yield “junk”) are selling off. The 10-year Treasury yield jumped back to 1.58% as the price fell. And by the way, over the last couple of trading sessions the yield curve turned 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.