Italy

SENTIMENT U-TURN ON BOND MARKET CONCERNS

The major stock market averages rolled over this morning. The Dow is currently down 379 pts and the SPX is off by 1.7%. The Nasdaq is down 2.1%. Energy, financials and materials—the sectors that tend to do poorly when interest rates drop—are down by more than 2% in early trading. On the other hand utilities, real estate and consumer staples—defensive sectors that do well in slower growth, lower-rate markets—are in the green. European stock markets closed down more than 1.5%, although most of Asia was in the green overnight. Commodities are mostly lower today. WTI crude oil backed down to $58.50/barrel. The bond market is rising as yields fall. Clearly, some capital is draining out of stock and flowing into bonds today. The 10-year Treasury yield fell to 2.43%, the lowest since December 2017.


*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 2, 2018

October 2, 2018

Stocks opened higher again this morning (Dow +131 pts; SPX +.16%). There’s not much news for traders to chew on today. Utilities are bouncing back 1.3% after having corrected in September. At the same time, materials, tech and energy are trading higher. Biotechs, banks and transports are in the red. Small-caps are taking a hit (-2% in 2 days) after a new trade agreement was reached with Canada. Remember, small-caps were seen as a safe haven investment when trade tensions were at their worst. European stock markets were lower in today’s session on concerns about Italy’s budget deficits. The fact that the dollar is stronger and Treasury yields are lower has to do with Italy as well. Whenever European finances or economic growth look a bit uncertain, global investors tend to buy US Treasury bonds. So the 10-year Treasury yield dipped back down to 3.05%. And that, of course, is why utility stocks are rising 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 30, 2018

August 30, 2018

Stocks opened lower this morning after breaking to fresh highs earlier in the week. The Dow is currently off 112 pts and the SPX is down .28%. The materials sector is down 1.3% in early trading on weakness in gold miners and chemical producers. Banks and transports are down about .5%. Healthcare stocks are roughly flat and utilities are up modestly. The VIX Index—a common gauge of fear among traders—is back up to 12.5 but that’s still a very low level. For context, during the correction last January/February, the VIX spiked briefly to 37. European stock markets will close about .5% lower in today’s session and most of Asia was down overnight. The US dollar is a bit stronger today against a basket of foreign currencies, reacting to strong economic data (see below). Most commodities are not surprisingly trading lower. But WTI crude oil is holding steady at $69.66/barrel. Bonds are higher in price, lower in yield today. The 5-year Treasury note yield backed down to 2.76% and the 10-year yield is at 2.86%.


*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 7, 2018

The major stock market averages opened mixed this morning (Dow +122 pts; SPX flat; Nasdaq -.3%). Energy and telecom sectors spiked more than 1% in early trading. Retailers  and banks are also in the green. Tech, on the other hand, is lagging after revelations that Facebook (FB) shared user data with Chinese firms. And to be fair, the tech sector has already had a year’s worth of returns, up 13% so far in 2018. The VIX Index is trading up toward 12.3 and VIX July futures are up around 14.2. The dollar is weaker again today against a basket of foreign currencies, especially the Euro. And not surprisingly, most commodities are a bit higher. WTI crude oil is back up to $65.75/barrel. Copper is also up over 1% today, and 8% so far this month. We know copper tends to correlate with China’s economy, so that’s good news. Bonds are little changed today. The 5-year Treasury yield is hovering around 2.81% and the 10-year note yield is holding right around 2.97%.


*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 1, 2016

Stocks opened mixed this morning (Dow +46 pts; SPX -.17%; Nasdaq -1%). Tech is down 1.7% in early trading. The interest rate-sensitive sectors (utilities, consumer staples, real estate) are down as rates rise. On the other hand, financials and energy continue to rally, each up over 1%. It looks like investors are taking money out of tech and shifting into the banks and oil exploration companies. The VIX is up a bit to trade around 13.6 and VIX January futures are up around 16.2, so market volatility is expected to increase in the near future. Commodities are up today (Bloomberg Commodity Index +.9%). WTI crude oil continues to surge ($51/barrel) after Saudi Arabia muscled an OPEC deal to cut oil production by a small amount. Bonds are selling off as yields head higher. The 5- and 10-year Treasury yields are up to 1.89% and 2.45%, respectively. That’s the highest 5-year yield since 2011 and the highest 10-year yield since July 2015. Over the last 3 months, the iShares 20-year+ Treasury bond ETF (TLT) is down 13.5%! This is not the time to own long-term government bonds.


*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.