The major stock market averages surged higher this morning (Dow +430 pts; SPX +1.5%). Ten of eleven sectors are in the green, led by materials (+2.4%), industrials (+2.2%) and financials (+2%). Only the utilities sector has been left out (-.2%). Though trite, the reason given for this rally is “Trade Optimism,” according the Bloomberg. So we continue to trade in a range, knocked around daily by Tweets and vague headlines. In this case, President Trump Tweeted that “Good things are happening at China Trade Talk Meeting.” European stock markets closed sharply higher as well this morning, and Asia was up 1-2% last night. Commodities reacted as one might expect—gold fell 1% and oil rallied 1.4% to trade around $54.30/barrel. Bonds not surprisingly sold off. Long-term Treasury bonds are down more than 1% in early trading and high-grade corporates are down roughly a quarter of a percent. Only junk bonds, which typically trade along with the stock market, are modestly higher. The 10-year US Treasury Note yield climbed back to 1.75%.
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