Wal-Mart (WMT)

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.

STOCKS & BONDS RISING TOGETHER

STOCKS & BONDS RISING TOGETHER

Stocks opened slightly higher this morning (Dow +21 pts; SPX +.2%). Consumer goods sectors are up about .7% after Wal-Mart (WMT) reported strong fourth quarter results. Other than that, cyclical sectors are faring worse than the defensives. Traders are pondering—now that the SPX has risen back above its 200-day moving average—whether the recovery rally can continue, or some consolidation is needed after a really strong run. WTI crude oil is up a little to trade around $55.80/barrel. Copper is up nearly 2% today and nearly 10% so far this year. Bonds are trading modestly higher as interest rates tick lower. The 5-year and 10-year Treasury yields are back down to 2.46% and 2.64%, respectively. The Treasury bond market and stock market essentially don’t agree right now. Stocks are telling you the economic outlook is a little less positive but things are OK. The bond market seems to be less optimistic. But remember, Treasuries are reflecting a more dovish Federal Reserve, and also ultra-low or negative sovereign rates overseas. So lower Treasury yields aren’t necessarily warning of a coming recession. As evidence, look to the junk bond market, which is up over 5% so far this year. If the bond market really believed recession was coming within the next year, you’d see much higher junk yields.


*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.

August 31, 2018

August 31, 2018

The major stock market indexes are mixed in early trading (Dow -55 pts; SPX -.13%; Nasdaq +.1%). Retailers, semiconductors and REITs are moving up, but most other groups are in the red. Banks and oil companies are some of the worst-performing groups, and year-to-date they’ve been flattish. Trade volume is pretty light in front of the three-day weekend. European stock markets are down about 1% and Asian markets were down overnight. Over the last 24 hours we’ve seen headlines saying President Trump is leaning toward imposing trade tariffs on another $200bil in Chinese imports, and he’s also doing his part to cast doubt on the trade talks between US and Canadian officials this week. Today is the deadline for negotiating a new NAFTA deal with Canada. That country’s foreign affairs minister said the two sides are “not there yet.” That haze of political uncertainty will keep a lid on stock market gains for now.


*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.

August 16, 2018

August 16, 2018

Stocks gapped up at the open this morning (Dow +365 pts; SPX +.94%). Consumer discretionary, financials, industrials and telecom sectors are all up over 1% in early trading. The VIX Index, which spiked to nearly 15 this week, sank back under 13 today. European markets will close up about .8%, whereas most of Asia was down overnight. The dollar is down slightly, giving a little room for commodities to rise. WTI crude oil is back up around $65.50/barrel. Copper is up nicely after taking a massive 20%+ beating this year. Bonds are trading roughly sideways. The 5-year Treasury yield at 2.76% hasn’t moved much in a week. The 10-year Treasury yield ticked up slightly to 2.89%. The yield curve—difference between the 10-year and 2-year—is as flat as it has been this year.


*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.

February 20, 2018

The major stock market averages dipped at the open but quickly recovered. The Dow and SPX are currently down 77 pts & up .1%, respectively. The SPX has now recovered 70% of its correction losses. Telecoms, utilities and consumer staples sectors are down over 1% this morning due to interest rate sensitivity and a weak earnings announcement from Wal-Mart (WMT). Semiconductors and banks, on the other hand, are in the green. The VIX Index is hovering around 20, generally regarded as the dividing line between low and high volatility. The only reason that matters is that hedge fund trade algorithms are sometimes programmed to trade on VIX moves relative to 20. Bonds are down in price again as yields head higher. The 5-year Treasury yield is up around 2.67% and the 10-year is up around 2.91%.


*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 1, 2017

The major stock market averages opened down after the Dow hit 24,000 for the first time yesterday. At the moment, the Dow is down 133 pts and the SPX is down .6%. The energy sector shot up over .8% in early trading. Pharmaceutical stocks are also up over .6%. On the other hand, most everything else is in the red. Semiconductors are down 2% and transports are down 1%. VIX Index futures, which attempt to guess at market volatility over the next couple of months, are up around 11.7. That’s still very low. The dollar is a bit stronger today but commodities are up a lot. Bloomberg’s Commodity Index is up over 1% today. WTI crude oil, which has been in an up-trend since June, is now at $58.70/barrel. Apparently, OPEC decided to extend is self-imposed production cuts through the end of 2018. On one hand, OPEC is not to be trusted. On the other hand, Saudi Arabia really needs to boost oil prices in front of its IPO of Aramco next year. Bonds are modestly higher in price today. The 5-year Treasury yield is at 2.11% and the 10-year Treasury yield edged down to 2.40%.   


*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.

November 16, 2017

The major stock market averages surged at the open, reversing the pattern of the prior week. The Dow is currently up 193 pts and the SPX is up .77%. Tech and telecom are the best performing sectors, up well over 1% due to positive earnings announcements by Cisco Systems and Wal-Mart. The only sectors in the red are utilities and energy. Asia was up overnight and European markets are poised  to close about .5% higher. Commodities are rebounding modestly today, but WTI crude oil is down slightly to trade around $55.20/barrel. Day-today movements in oil are largely driven by speculators and headlines, not fundamentals, and it seems like traders are selling after a pretty big run. Bonds resumed their selloff today. The 5-year Treasury yield climbed back to 2.06% and the 10-year yield ticked up to 2.35%. 


*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.

November 18, 2016

Stocks opened lower this morning (Dow -36 pts; SPX -.25%). The Nasdaq briefly touched an all-time high. The SPX is within spitting distance of its all-time high (2193). The healthcare sector is down nearly 1% in early trading. Gold miners are down 2%. Transports, banks and semiconductors are up a bit. The dollar is still strengthening (+2% YTD) and commodities are mostly lower. WTI crude oil is down modestly to trade around $45/barrel. Bonds continue to sell off. The 5- and 10-year Treasury yields are up to 1.78% and 2.34%, respectively. Keep in mind the 10-year yield is up 100 basis points since bottoming in July. Rates are back up to November 2015 levels. 


*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.

August 18, 2016

The S&P 500 Index and Dow Industrial Average opened lower this morning but quickly turned around. The energy sector is leading the charge, up about 1.2% in early trading. One big reason why: WTI crude oil jumped 2% to $47.80/barrel and Brent crude went over $50/barrel. European markets are poised to close in the green as well. The dollar is weaker on the day (and has been falling for a month now). That’s giving some life to commodities and in fact the Bloomberg Commodity Index is up nearly 10% year-to-date. Copper, which has been smacked around for 5 years now, is actually up modestly in 2016. I suppose that says something about China’s economic growth. Bonds are mixed today. The 5-year Treasury yield ticked down to 1.13% and the 10-year is trading at 11.56%. 


*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.