National Bureau of Economic Research (NBER)

DRIFTING AIMLESSLY, LOOKING FOR A CATALYST

Stocks opened mixed this morning, looking for a catalyst. The Dow is currently down 25 points and the SPX is flat. By the way, the SPX is now up 18% so far this year, trading at a P/E ratio of 17. Most investors believe the index is at fair value and so a meaningful catalyst is necessary to push it higher in the near term. Unlike yesterday, defensive sectors like utilities (+1%) and consumer staples (+.4%) are leading the way. On the other hand, energy stocks are down on oversupply concerns. OPEC decided to extend current oil production limits through March 2020 because the global economy is weakening. Tighter control of crude supply will help prop up oil prices. Today, WTI crude oil fell back to $56.90/barrel. Bonds are trading slightly higher again today as yield creep lower in anticipation of slower economic growth and expected Fed rate cuts. The 10-year Treasury yield is back down to 1.98%.


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