Underlying Inflation Gauge (UIG)

FOCUS ON INFLATION & THE FED

Stocks opened mixed this morning (Dow -13 pts; SPX +.2%, Nasdaq +.5%). The best performing groups in early trading are semiconductors and biotechs, both up about 1%. Banks are being dragged down by the theatrics of congressional testimony by major bank CEOs today. Retailers and industrials are also down a bit. The dollar is stronger against a basket of foreign currencies after the European Central Bank (ECB) reiterated warnings over slower economic growth and said it plans no interest rate hikes in the foreseeable future. WTI crude oil bounced back toward $64.20/barrel today despite the stronger dollar. Bonds are trading higher as well. The 10-year US Treasury yield backed down to 2.4% after today’s economic reports (see below). The iShares 20+ Year Treasury Bond ETF (TLT) is up .27% and the iShares Investment Grade Corporate Bond ETF (LQD) is up .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.

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 9, 2017

Stocks opened higher again this morning (Dow +99 pts; SPX +.3%). Healthcare stocks are on the rebound after yesterday’s rout. In fact, the Nasdaq Biotech Index is up 1.6% at the moment. Banks are also rallying over 1%. Bond replacement stocks, such as utilities, telecoms and real estate are down. The dollar is stronger against a basket of foreign currencies and bonds are selling off. The 5-year Treasury yield shot up to 2.31%, which is a long-term resistance level going back to April 2011. The 10-year yield is also moving higher, to 2.53% (highest since last March). The next level of resistance is 2.63%. If Friday’s CPI inflation report comes in high, the 10-year could possibly hit that resistance level in short order.


*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.

September 22, 2017

Stocks opened slightly lower again today (Dow -29 pts; SPX flat).  Utilities, real estate and healthcare are leading to the downside. Telecoms, industrials and energy are in the green, however, continuing a recent trend. The VIX Index still isn’t registering much fear, trading just under 10. European markets are poised to close slightly higher today. And by the way, just about all the major European stock indexes are up more this year than the SPX or Dow. The dollar is weaker again vs. a basket of foreign currencies, and is down about 10% so far this year. That doesn’t really fit well with the Fed’s expectations for rising interest rates over the next year. In other words, if the economy is improving and interest rates are rising, you would expect a stronger dollar. Part of the reason for the weaker dollar is that foreign economies are faring better this year. Bonds are trading a bit higher today after a two-week drubbing. The 5- and 10-year Treasury yields edged back down to 1.87% and 2.26%, respectively. But it really does look like the 10-year yield will move up to test resistance at 2.39% soon. 


*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.