VIX Index

TRADE WAR MOVES TO DEFCON 4

Stocks gapped down at the open this morning. The Dow is currently down 350 pts and the SPX is down 1.5%. Nearly every sector of the market is down more than 1%, led by energy and tech (-2%). Domestically oriented stocks like healthcare insurance, real estate and utilities are holding steady. But companies exposed to the trade war are getting hit. A lot of this is headline driven (see below). The VIX Index spiked to 17.5. Commodities are falling in value, save gold (+1.5%). WTI crude oil is down 3% to $53.60/barrel. Bonds are sopping up the negativity and benefiting from it. The 10-year Treasury Note yield fell back to 1.55% and the iShares 20+ Year Treasury Bond ETF (TLT) is up nearly .9% this morning. The often cited “yield curve” difference between the 2-year and 10-year Treasury yields is still barely positive. This is a technical indicator bond traders watch in order to gauge the chances of an economic recession within the next year or two.


*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.

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.

THE BOND MARKET IS DRIVING THE BUS

Stocks opened sharply lower today (Dow -590 pts; SPX -2.1%). Financials and energy are leading the market lower, down by over 3% in early trading. The only sector in the green is utilities, up .4%. The SPX is still about 1.5% higher than it fell on Monday August 5th, so this is not even the worst day for stocks this month. Machine trading has taken over in reaction to falling yields in the bond market, and also lower trade volume. The VIX Index climbed back to 21, but that’s pretty tame compared with the spike above 35 we saw last December. As opposed to yesterday, everyone wants to be first to call the next recession. Scanning Bloomberg headlines, we see the following:

“Bond Panic Pummels Banks with Global Recession Fears…”

“Countdown to Catastrophe? The Yield Curve and Stock Bull Markets”

“Recession Worries Pile Up for the Battered Global Economy”


*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.

MANIC MARKET FLIPS ON TRADE HEADLINES

Stocks rallied after the Trump Administration delayed some of the new trade tariffs planned for next month. The Dow is currently up 363 pts, the SPX is up 1.3% and the Nasdaq is up almost 1.6%. Not surprisingly, the leading sectors today—consumer discretionary, industrials, tech—are viewed as having the most vulnerability to an escalating trade war. By contrast, the two sectors seen as the safest in an uncertain global trade environment—utilities and real estate—are in the red today. The VIX Index, a common gauge of fear among options traders, fell back to 17.9 from 21 yesterday. European stock markets rallied sharply on the trade tariff news as well. Asian markets, however, were down overnight on civil unrest in Hong Kong. The US dollar continues to strengthen as the Chinese yuan weakens. But better investor sentiment today is propping up commodities. WTI crude oil spiked 3% to $56.80/barrel for no good reason. Bonds are selling off after an enormous 2019 rally. The 10-year Treasury Note yield bounced back to 1.68% this morning. Since investors’ primary concerns at the moment are 1) trade war, and 2) falling interest rates, any day in which rate rise will generally evoke risk-on sentiment.


*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.

VOLATILITY IS HERE TO STAY IN AUGUST

Stocks opened lower this morning, taking a breather after two days of gains. The Dow is down 218 pts and the SPX is down 1%. Technology (-1.7%) and energy (-1.3%) are the worst performing sectors. Only utilities are holding flat. The VIX Index climbed back to 18.5 this morning. European stock markets (and those in China) closed down by about 1%. Commodities are mostly lower on the day, save oil. Oddly enough, WTI crude oil spiked more than 3% to trade at $54.40/barrel even after an IEA report showed global oil demand at a decade low. It’s no secret that slower global economic growth is bringing down the rate of demand growth; at the same time, US producers continue to pump oil near record levels. It just goes to show that speculation and manipulation are rampant with commodities, and day-to-day prices moves often don’t make sense. Safe-haven Treasury bonds are gaining in price today, pushing yields lower. On the other hand, corporate bonds are falling in price.


*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.

ANOTHER TRUMP SLUMP

The major stock market averages gapped down at the open, but quickly pared losses. The Dow is currently down 350 pts and the SPX is down 1%. Energy & financial sectors continue to slide, down 2% or more in early trading. In fact, the S&P energy sector has fallen nearly 11% since mid-July, right along with oil prices. It seems oil is somewhat over-supplied at the moment. The VIX Index, which spiked to 24.5 on Monday, has settled down toward 21. The index measures fear among traders, and hasn’t been this high since January. Commodities are mostly lower in today’s session, save copper and gold. In fact, gold is now up over 6% this month. Bonds are, in the words of Jim Cramer, trading like a recession is around the corner. The iShares 20+ Year Treasury Bond ETF (TLT) is up over 7% this month. Interest rates for Treasuries, municipals, and high-grade corporates are falling. The 10-year Treasury Note yield is down around 1.64%, the lowest since early October 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.

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.

MEXICO TRADE RELIEF

Stocks opened higher today after US & Mexican negotiators reached a tentative arrangement to avoid new trade tariffs. The Dow is currently up 174 pts and the SPX is up 1%. Consumer discretionary, financials and technology sectors are all up 1.5% or more in early trading. The VIX Index—a common gauge of fear among traders—sank back to 16. European stock markets closed up by about .5% and most Asian markets were up over 1% last night. In the wake of the Mexico headline, the dollar strengthened and gold & bonds fell. WTI crude oil is trading flat just under $54/barrel. Most areas of the bond market are down today, except for junk bonds. The 10-year Treasury yield climbed back to 2.14%.


*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.

BAD NEWS IS GOOD NEWS

Stocks surged higher today in spite of a weak jobs report. The Dow is currently up 299 points and the SPX is up 1.1%. The best performing sectors are tech (+2%), consumer discretionary (+1.5%) and communications services (+1.4%). Financials is the lone sector in the red—bank stocks are down on lower interest rates. The VIX Index is up slightly to trade around 16. European stock markets closed up about 1% and Most of Asia was higher overnight. Commodities are mixed. WTI crude oil rebounded to $54/barrel after taking a massive beating over the last six weeks. The bond market is rejoicing this morning on falling interest rates. Treasuries are up across the board, and even junk bonds are rallying. The 10-year Treasury yield dipped to 2.09% and is now at levels last seen in September 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.

RELIEF RALLY

Stocks opened higher today on some ever-so-slightly encouraging trade headlines. The Dow is currently up 390 points and the SPX is up 1.5%. The best performing sectors—financials and tech—are up over 2% in early trading. Real estate and utilities are in the red. The VIX Index sank back to 17 and somehow traders are in the mood to buy stocks, saying we’re “oversold.” European markets closed up by about .5% to 1%. Commodities are mostly trading higher, save gold. WTI crude oil fell at the open but recovered to $53.30/barrel. The bond market is broadly lower today. The 10-year Treasury note yield rebounded to 2.14% this morning after falling to a 20-month low. By the way, 2019’s downshift in bond rates and inflation have stoked speculation that the Federal Reserve will be cutting its policy short-term interest rate before long. Fed officials are obviously noncommittal but Chair Jerome Powell said in a speech today that the Fed will “act as appropriate to sustain the expansion.” That’s exactly what investors want to hear.


*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.

ANOTHER TRADE SETBACK?

Stocks gapped down at the open today (Dow -232 pts; SPX -.9%) after President Trump threatened new trade tariffs on Mexico. Ten of eleven major market sectors are down, led by communications services (-1.3%) and consumer staples (-1.1%). A number of key industry groups are down more than 1%, such as biotechs, retailers and transports. Not surprisingly, gold and gold mining stocks are up on the day. The VIX Index—a common measure of fear among traders—climbed back to 18.3. European markets closed down about 1% and Asia was mostly lower overnight. Interestingly, in the wake of higher trade tensions, China’s Shanghai Composite Index and the S&P 500 Index are down about the same in May, -5%. So we’re certainly not seeing any panic in global stock markets. Commodities are mostly lower in early trading. Gold is up about .9% but oil, copper and iron ire are falling in price. WTI crude oil is down 1.3% to trade at $55.35/barrel. Bonds are mostly higher—especially safe-haven Treasuries. After the Mexico tariff threat, the 10-year Treasury yield fell to 2.17%, the lowest since September 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.

STOCKS DOWN WITH HEADLINES

Stocks sank at the open, as is their custom this month. The Dow is currently down 367 pts and the SPX is down 1.5%. Energy is the worst performing sector, down 3.5% (see below). Most other sectors are down about 1% except the defensives (utilities, consumer staples, real estate). VIX Index June futures are trading up around 17, but that’s not considered elevated. There’s no real panic in the market, just a slow bleed on trade headlines. European stock markets closed down about 1.5% today and Asia was uniformly down overnight. The bond market is catching a bid—especially safe-haven Treasury bonds. The 10-year Treasury yield is down to 2.32%, the lowest level since November 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.

TRADE WAR II HERE TO STAY

Stocks opened lower again this morning (Dow -71 pts; SPX -.26%). But remember, the recent pattern has been a lower open with late afternoon recovery. At the moment, the energy sector is down 1.2% on concerns that China will reduce purchases of US natural gas. Tech, industrials and consumer discretionary sectors are down as well on trade tensions. Defensive sectors are in the green as traders shift into low volatility plays. The VIX Index is pretty low (14.8) considering current geopolitical tension. Commodities are mostly lower, led by oil. WTI crude fell back to $61.75/barrel. Copper is flat on the day, as is gold. In fact, gold has done nothing since the trade war reignited. Remember when gold used to be a dependable safe-haven play? Bonds are trading higher as yields edge lower. The 10-year Treasury yield is back down to 2.39%. All types of bonds—investment grade, junk, asset-backed, Treasuries, long-term, short-term—have done pretty well this year because interest rates are down.


*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.

MARKET AT THE MERCY OF TRADE HEADLINES

Stocks gapped down at the open this morning, but quickly recovered after President Trump said he would delay planned auto import tariffs hikes. The Dow is currently up 41 pts and the SPX is up .5%. By the way, the Dow had its best day in a month yesterday. Ten of eleven sectors are in the green, led by communications services (+1.6%) and tech (+1%). Banks, on the other hand, are down along with interest rates. The VIX fell back to 17.3 today. Commodities are also trading higher today. WTI crude continues to climb on fears of Iranian terrorism in the Persian Gulf. Bonds are trading higher across the board, forcing yields lower. The 10-year Treasury Note yield is back down to 2.39% and will probably test its near-term support level of 2.37%. One doesn’t normally see stocks and bonds move in tandem. But of course any time geopolitical tensions rise one can expect safe-haven trades like gold and Treasuries to move higher.


*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.

RELIEF RALLY

Stocks opened higher this morning in an attempt to recover from a week-long 5% correction. The Dow is currently up 219 pts and the SPX is up 1.25%. Ten of eleven market sectors are in the green, led by tech (+1.9%), financials (+1.5%) and energy (1.7%). The VIX Index—a common gauge of fear among traders—fell back to 18.5. Oil prices also recovered after a series of attacks on Saudi oil tankers and pumping stations, presumably by Iran in retaliation for trade sanctions. WTI crude is back up around $61.80/barrel. Bonds are little changed this morning. The 10-year Treasury yield edged up to 2.42%.


*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.

TRADE WAR ESCALATION

Stocks gapped down at the open after China escalated the trade war with fresh tariffs on US goods. The Dow is currently down 624 pts and the SPX is down 2.5%. The US stock market is now down about 5% from its recent all-time high. The worst performing sectors today are tech, industrials and consumer discretionary—those considered hardest hit by trade tariffs. The only sector with gains today is utilities. The VIX Index jumped up to 20.6 but VIX June futures are trading at 18.6. Commodities are mostly lower. Bloomberg’s Commodity Index (BCOM) is down .6% today, but still up slightly on the year. WTI crude oil fell back to $61/barrel. Bonds are not surprisingly rising in value. The 10-year Treasury yield fell back to 2.39% and the next real support level is March’s low of 2.37%.


*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.

TROUBLE WITH TRADE

The major stock market averages gapped down at the open after news that US-China trade talks are breaking down. The Dow is currently down 220 pts and the SPX is down .95%. Consumer discretionary, industrials, tech and materials sectors are all down more than 1%. The VIX Index spiked briefly to 19 before falling back to 16. WTI crude oil dipped slightly to $61.60/barrel. The US dollar strengthened and gold is modestly higher today. Bonds are trading higher (except for junk). The 10-year Treasury yield fell back to 2.48%.


*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.

POST FED MEETING HANGOVER

Stocks opened lower this morning (Dow -104 pts; SPX -.58%). There is a bit of pouting among traders in the wake of yesterday’s Fed meeting (see below). Interest rates are rising, and that means bank stocks are up and utilities & real estate are down. Commodities are mostly lower in early trading. Copper has lost about 5% over the last two days. WTI crude oil tumbled more than 3% today to trade around $61.30/barrel. US oil stockpiles are at a two-year high while the volume of US production is at record levels. Bonds are falling in price as a result of the Fed meeting. The 10-year Treasury yield snapped back to 2.55%. Apparently, some traders had positioned with the expectation that the Fed would discuss cutting interest rates in the near future. That seems terribly misguided but appears to have been the case.


*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.