SPDR High Yield Bond ETF (JNK)

TRADE WAR IS TAKING A TOLL

Stocks opened modestly higher this morning (Dow +38 pts; SPX +.16%). Defensive sectors—utilities, consumer staples, real estate—are leading way. On the other hand, energy, industrials and tech are flat to down in early trading. The VIX Index is holding its ground at 21.8 and VIX September futures are trading at 20.4. So despite incredibly bearish financial news media coverage, trading aren’t panicking. European markets will close slightly lower, whereas Asian markets were mostly higher overnight. Oil is down in price again; WTI crude is down 1% to trade around $54.60/barrel. The dollar is stronger after hints by an official at the European Central Bank (ECB) that a bigger monetary stimulus package is coming. Bonds are trading uniformly higher today as yields continue to drop. Junk bonds are up about .25% after some better than expected reports on the economy. But Treasuries are also catching a bid. The 10-year Treasury Note yield has fallen to just 1.55%, the lowest since September 2016.


*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.

HONG KONG JITTERS

The major US stock market averages dived in early trading on continued social unrest in Hong Kong. The Dow is currently down 239 pts and the SPX is down .7%. Ten of eleven market sectors are in the red; financials & energy are the worst performing. As is typical in August, exchange trade volume is pretty low. European markets are poised to close slightly lower today. Strangely enough, most of Asia closed higher last night. Despite intensified pro-democracy protests, Hong Kong’s Hang Seng stock index fell only .4% during the session. The US dollar continued to strengthen vs. China’s yuan and that’s putting some pressure on commodities (i.e. iron ore, copper, agricultural goods). WTI crude oil is unchanged around $54.50/barrel. Bonds are once again powering ahead as yields edge lower. The iShares 20+ Year Treasury Bond ETF (TLT) is up 1.5% today (and 17% on the year). High-grade corporates are up about .4%. On the other hand, Junk bonds are down .3%.


*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.

CHINA'S CENTRAL BANK STABILIZES GLOBAL STOCK MARKETS

Stocks opened sharply higher this morning (Dow +197 pts; SPX +1.4%). All eleven major market sectors are in the green, led by tech (+1.9%), materials & consumer discretionary (+1.7%), and communications services (+1.5%). In fact, the SPX has now recovered 50% of its recent decline. The VIX Index collapsed back to 17.6 as jittery traders breath a sigh of relief. Near-term, it looks like Monday’s SPX correction low was successfully re-tested yesterday. But make no mistake, we’re not out of the woods when it comes to volatility. Remember, President Trump’s new round of trade tariffs is scheduled to take effect at the beginning of September. For the moment, however, everything looks rosy. European markets closed up by more than 1%, and Asian markets are also up overnight. Commodities are rebounding today, paced by a sharp recovery in oil prices. WTI crude is up 3% to trade around $52.60/barrel. The bond market about-faced as well. Junk bonds, which sold off by 2% early this month, are now recovering. Treasuries and high-grade corporates, however, are selling off after a monster run. The 10-year Treasury Note yield, which collapsed from 2% to 1.71% in a matter of a few days, ticked up to 1.75%.


*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.

FED DAY!

Stocks opened modestly higher this morning (Dow +27 pts; SPX +.12%). Most market sectors are higher in early trading, led by energy, tech and real estate. Consumer staples & discretionary sectors, however, are in the red. Earnings announcements continue to push around individual stocks, but the market as a whole is waiting on the outcome of today’s Federal Reserve policy meeting for some direction. The bond market is moving higher this morning, with rates dipping. The 10-year Treasury yield is back down to 2.03%. Junk bonds are also in green, perhaps because traders expect the Fed to formalize the flip to monetary easing today (see below).


*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.

THE EARNINGS BEAT GOES ON

Major stock market averages opened modestly higher today (Dow +86 pts; SPX +.2%). The materials sector (+1.5%) is leading the way after paint maker Sherwin Williams (SHW) reported excellent second quarter results. Financials are up (+.8%) and industrials (+.6%). However, utilities & communications services sectors are in the red. Commodities are mostly lower in early trading. WTI crude oil is back down under $56/barrel this morning. Oil is in the middle of a tug-o-war between geopolitical tensions with Iran, and modest global oversupply. Bonds are mostly lower in price as yields tick higher. The 10-year Treasury yield is hovering around 2.05%. Junk bonds, which usually trade with the economy and corporate earnings, are holding their own this year. The SPDR High Yield Bond ETF (JNK) has been roughly flat over the last three months after recovering from last year’s selloff.


*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.

CAUTIOUS OPTIMISM FOR THE MOMENT

Stocks opened modestly higher this morning, edging closer to April highs. The Dow is currently up 58 pts and the SPX is flat. Banks, retailers, semiconductors and energy are all up about .5% in early trading. On the other hand, utilities, industrials and healthcare are down. VIX July futures are trading around 17, suggesting traders don’t expect a near-term volatility spike. Expected Treasury bond market volatility has collapsed this month as well. Commodities are mostly higher today, save gold. WTI crude oil bounced back to $53.50/barrel after bottoming around $51.70 a week ago. The bond market is mixed today. Treasuries are selling off a bit after a monster 6-week run. The 10-year Treasury yield notched up to 2.16%. Corporates are faring better in early trading, with the SPDR High Yield Bond ETF (JNK) up about .3%.


*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.

HIGHER TRADE TARIFFS COME AT LAST

The major stock market averages opened lower as the trade war with China escalated. The Dow is down 290 pts and the SPX is down 1.4%. The pattern over the last few trading sessions has been a sharp decline in the morning following by a recovery in the afternoon. We’ll see if that pattern persists today; my guess is that traders won’t want to be “long” going into the weekend. Tech and healthcare are the worst performing sectors at the moment, down about 1.8%. Utilities is the only sector in the green. The VIX Index continues to hover around 20, which is typically considered the lower threshold of elevated fear among traders. Overseas things are looking better. European markets closed flat. China’s Shanghai Composite Index actually closed up by 3%! Commodities are trading mostly higher. Copper, gold and iron ore are up a bit. WTI crude oil is flat at $61.60/barrel. Bonds are following the same pattern we’ve seen through the week. Treasuries are up in price, down in yield; high yield corporates (junk) are down in price, up in yield. The 10-year Treasury yield is all the way back down to 2.43%. So bonds are painting a risk-off picture, if only temporarily.


*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.

STOCKS MIXED, AT THE MERCY OF TRADE HEADLINES

Stocks opened mixed this morning at the mercy of trade-related headlines. The Dow is currently up 70 points and the SPX is flat. The Nasdaq is down slightly The VIX Index back down just a bit to 19. Strangely enough, the utilities sectors is down by more than 1% in early trading. The materials and communications services sectors are down modestly. On the other hand, real estate, industrials and consumer discretionary sectors are up about .3%. Most commodities are trading lower today, save oil. Iron ore is down 1%, copper is down .6%. WTI crude bounced back 1% to trade at $62/barrel on a lower than expected crude inventory report. Bonds are again mixed, with corporates flat and Treasuries up. The 10-year Treasury yield fell back to 2.46%. However, look at junk bonds. The SPDR High Yield Bond ETF (JNK) is actually higher on the day, suggesting the renewed trade fight isn’t the end of the world.


*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.

WHERE TO NEXT?

Stocks opened slightly lower this morning. The Dow is currently down 50 points and the SPX is down .1%. Financials (+.3%) and industrials (+.5%) are bouncing back from yesterday’s declines. On the other hand, healthcare, energy and real estate sectors are in the red. WTI crude oil fell back to $63.50/barrel in early trading. Most other commodities are down as well, partly due to a strengthening US dollar. Bonds are also trading lower as yields tick higher. The 10-year Treasury yield bounced back up to 2.49%. Only junk bonds are holding flat.


*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.

BOND MARKET DEBATE

Stocks opened higher this morning (Dow +89 pts; SPX +.5%). The best performing sectors include tech (+1.4%) and financials (+.7%). Sub-groups like biotechs and gold miners are also catching a bid. But real estate, energy and communications stocks are down in early trading. REITs just hit an all-time high, so it makes sense that we’d see some give-back here. The VIX Index continues to fall, suggesting traders are complacent about risk over the next 30 days. European markets will close higher by roughly .5% to 1% today. Asian markets also posted gains last night. The dollar is weaker against a basket of foreign currencies, giving a little boost to commodities. Remember, many commodities are priced in US dollars around the world. However, WTI crude oil ($58.40/barrel) is taking a breather today after a monster run year-to-date; same thing with copper (+11% YTD). Bonds are trading higher in price, lower in yield today. The 10-year Treasury yield ticked down to a fresh 2 ½ month low of 2.59%.


*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.

CROSSCURRENTS GIVE THE FED PAUSE

CROSSCURRENTS GIVE THE FED PAUSE

Stocks opened lower today, but quickly recovered. The Dow and SPX are currently flat. Financials, energy and tech sectors are in the green but most everything else is slightly lower. Copper, iron ore and oil are strong today. WTI crude oil is back up around $55.75/barrel. Copper is now up something like 13% on the year, and that’s usually a sign of economic strength overseas. Strangely, bonds are trading mostly higher as well. Long-term Treasury bonds are up about .2% and junk bonds are up nearly that much. The 10-year Treasury yield fell back to 2.65%. Since the beginning of February, interest rates have been treading water with very little volatility.


*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.

DON'T BE MISLEAD BY NEWS HEADLINES ON THE ECONOMY

The major stock market averages opened lower today on the some disappointing retail sales data (see below). The Dow is down 107 points and the SPX is down .2%. The consumer staples sector is down over 1% after a weak earnings report from Coca Cola (KO). Financials are down over 1%, and industrials are down .6%. This could be the consolidation we’ve been expecting after a sharp rally in January. Commodities are mixed in early trading. WTI crude oil is unchanged around $54/barrel. Bonds are modestly higher in price, lower in yield. Longer-term Treasury notes—as measured by iShares 20+ Year Treasury Bond ETF (TLT)—are up about .5% today. TLT is flat on the year, whereas corporate bond ETFs are mostly higher so far in 2019. As you might expect on a day when stock prices are falling, junk bonds are also weak.


*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.

RETURN OF THE FED PUT

RETURN OF THE FED PUT

RETURN OF THE FED PUT

Stocks surged at the open this morning following yesterday’s Fed meeting. The SPX is up .8% and the Nasdaq is up 1.4%. Only the Dow is lagging a bit, down 6 points. The communications services sector shot up nearly 4%. Most other sectors are in the green as well, with the notable exceptions of financials and materials. Oil prices continue to recover, with WTI crude back above $55/barrel. Copper is now up over 5% this month, signaling some optimism over a trade deal with China. Bonds, strangely enough, are uniformly higher as well. The iShares 20+Year Treasury Bond ETF (TLT) is up .8% in early trading, and the SPDR High Yield Bond ETF (JNK) is up .4%. It is rather unusual to see stocks, commodities and bonds all trading higher on the same day.


*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.

RECOVERY CONTINUES IN FITS & STARTS

RECOVERY CONTINUES IN FITS & STARTS

RECOVERY CONTINUES IN FITS & STARTS

Stocks opened lower this morning (Dow -45 pts; SPX -.1%). Most major market sectors are in the red, led by energy and utilities. Semiconductors and banks, on the other hand, are trading higher. Over the last several days, the VIX Index has collapsed—that is, expected near-term volatility has collapsed. European markets closed .5% lower today after we learned that Italy’s economy contracted in the third quarter and industrial production plunged in November. On the other hand, most of Asia was positive overnight. China’s Shanghai Composite has been cautiously advancing since January 3rd—could that signal some optimism over trade? Commodities are trading mixed today. WTI crude is down 2% to $51.60/barrel, hence the dip in energy stocks. But make no mistake, oil’s new trend is up. Bonds are mostly higher today, except junk which is following the stock market pretty closely these days. Interest rates are down across the curve today. The 5-year and 10-year Treasury yields are back down to 2.52% and 2.70%, respectively.


*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.

January 8, 2019

January 8, 2019

Stocks opened higher yet again today (Dow +165 pts; SPX +.45%). The financial sector is down nearly .6% and the tech sector is pretty flat. But every other sector is in the green, led by communications and energy. WTI crude oil extended its recovery from the late 2018 crash and is now trading up around $49.50/barrel. Most of the bond market is trading higher as well, meaning that interest rates are lower. Junk bonds are up over .3% in early trading (see below). High-grade corporate bonds are up about .2%. Treasury bonds are modestly lower on the day, which is what you would expect. The 5-year and 10-year Treasury yields are back up around 2.55% and 2.71%. I expect they’ll head higher from here.


*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 18, 2018

December 18, 2018

Stocks opened higher this morning (Dow 243 pts; SPX .5%) in an attempt to recover from yesterday’s rout. A number of market sectors are up about 1%: industrials, real estate, materials, communications services and consumer discretionary. Energy stocks are down following oil prices. WTI crude oil fell to a 15-month low after a report that global oil production is rising. European stock markets closed down about .7% and Asian markets were down overnight. China’s Shanghai Composite Index is down 22% so far this year in local currency terms (or about 26% in dollar terms). Commodities are mixed in early trading. As mentioned, WTI crude oil is down around $47/barrel (down 36% since early October. Consensus Wall Street opinion is that global oil demand is just fine, but supply is temporarily too high. As I’ve mentioned before, there is a lot of room for traders and governments to manipulate oil prices. Bonds are mixed in early trading. Treasury bonds are rising but junk bonds are falling in price. The 5-year and 10-year Treasury note yields are back down to 2.67% and 2.83%. Remember last summer when traders were freaking out over rising interest rates? They feared higher mortgage & auto loan rates and worried incessantly that the Federal Reserve would have to keep hiking rates to keep pace. Well, those concerns seem in the distant past now. We’re all wondering what the bond market’s massive volatility is trying to tell us.


*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 13, 2018

December 13, 2018

Stocks opened modestly higher again today, but soon faded. The Dow is now up 10 pts on the day and the SPX is down .28%. Transports, retailers and banks are down. REITs and utilities are trading higher along with bonds. Commodities are broadly higher, trying to recover from a rough year. WTI crude is trading over $52/barrel. Year-to-date, copper is still down 19%, gold is down 5%, and oil is down about 10%. The iShares Global Agriculture Producers ETF (VEGI) is down nearly 7%. Despite strong economic growth and corporate earnings, cyclical risk-on sectors like energy, materials and industrials have not fared well in 2018.


*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 12, 2018

December 12, 2018

Stocks opened higher this morning (Dow +350 pts; SPX +1.57%). A number of sectors are up more than 1.5% in early trading: tech, communications services, energy, healthcare, industrials and consumer discretionary. Semiconductor stocks are rallying sharply for the second consecutive session. The SOX Index is trying to recover from a pretty deep 21% correction this year. The VIX Index is down around 20.6 and VIX January futures are trading down around 20, suggesting traders are less fearful than they were a week ago. The dollar is weaker on a benign inflation report (see below). That—along with OPEC’s decision to cut output—is helping oil prices recover. WTI crude is back up around $52.30/barrel. Bonds are mixed in early trading. For the second straight session, junk bonds are rallying; trying to recover from a 7% correction this year. Remember, junk bonds are seen as leading indicator of economic growth. In addition, we’re seeing Treasury bonds sell off for the third consecutive session. The 5-year and 10-year Treasury yields are back up around 2.76% and 2.90%. For what it’s worth, the bond market seems to suggest that the worst of the stock market correction is past.


*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 4, 2018

Stocks fell at the open, giving up yesterday’s post-G20 meeting rally. The Dow is currently down 587 pts and the SPX is down 2.3%. A number of sectors are down more than 2% in early trading: consumer discretionary, financials, industrials, tech, materials. Only utilities are catching a bid. This is clearly a risk-off trade. Foreign markets closed mostly lower last night and early this morning. The VIX Index is back up to 19., but it should be higher if traders were really frightened. Today’s selloff is mostly due to program trading (i.e. “the machines”). The dollar is flat and commodities are trading higher. WTI crude oil, which was crushed in October & November, is edging back up toward $53/barrel. Bonds are faring well today as yields tick lower. In fact, over the last few days, Treasury bond prices have skyrocketed. And remember, bond prices run inverse to yields. So the 10-year Treasury yield is all the way back down to 2.92% for the first time in 2 ½ months. And all of the sudden, investors are again concerned about the yield curve. The difference between the 10-year and 2-year Treasury yields is down to just 10 basis points, or .10%. At the same time, junk bond prices continue to glide lower. The SPDR High Yield Bond ETF (JNK) is now off 6.4% from its January peak. So we’re seeing a risk-off trade in the bond market today as well.


*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 1, 2018

October 1, 2018

Stocks surged at the open this morning (Dow +250 pts; SPX +.65%). Materials, industrial and energy sectors are all up over 1% in early trading. Only the most interest rate sensitive sectors—utilities and real estate—are in the red. The VIX Index fell below 12 and most global equities rallied. Even Chinese markets participated last night (Shanghai Composite +1%). The dollar is a little stronger today and commodities are mixed. Gold, copper and iron ore are falling in price, whereas WTI crude oil is up around $73.90/barrel. Despite trade war fears, global oil demand is healthy and the perceived constraint—what with trade sanctions in Iran & assorted problems in Venezuela—is supply. Bonds are mixed in early trading. Longer-term Treasuries are selling off a bit. The 10-year Treasury yield backed up to 3.06%. On the other hand, junk bonds are surging after a new trade deal with Canada was announced (see below).


*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.