iShares IBOXX Investment Grade Corporate Bond ETF (LQD)

JOBS REPORT SPURS DEBATE ON HEALTH OF THE ECONOMY

Stocks opened modestly higher this morning (Dow +70 pts; SPX +.14%). Small gains are broad-based across consumer-facing sectors, as well as financials, healthcare, industrials, materials and real estate. Only utilities, communication services and tech are left out with small losses. Commodities are trading lower. WTI crude oil fell back to $55.70/barrel; copper fell .5% and iron ore is down something like 3%. Only gold (+.14%) is higher on the day. The bond market is modestly higher in today’s trade. The 10-year Treasury Note Yield is unchanged at 1.55%. Bonds have done well this year due to the sharp decline in rates. The iShares 20+Year Treasury Bond ETF (TLT) is up nearly 20% and the iBoxx High Grade Corporate Bond ETF (LQD) is up 13%. And in case you’re wondering, no it is not normal for both the stock and bond markets to post 10-20% returns over the same 8-month period.


*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.

IMPROVING ECONOMIC MOMENTUM

Stocks opened lower this morning on trade war concerns. The Dow is currently down 22 pts and the SPX is down .28%. Pharmaceuticals, transports, semiconductors and banks are all down. Real estate investment trusts (REITs) are up on the better than expected pending home sales report. The consumer staples sector is higher on a strong earnings report by Procter & Gamble (PG). European markets were uniformly and sharply lower in today’s session, whereas Asian markets traded higher overnight. Commodities are mostly higher, with WTI crude oil bouncing back toward $57.15/barrel. Bonds are mixed. Long-term Treasuries are up slightly, but corporates are down on the day. The iBoxx Investment Grade Corporate Bond ETF (LQD) is showing signs of topping out after 10% run this year. As we see more signs of improving economic momentum (see below) rates could move upward, pushing bond prices lower.


*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.

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.

WALL STREET MORE OPTIMISTIC

Stocks opened mixed. The Dow is currently down 30 pts but the SPX is flat. Utilities, real estate, and communications services sectors are down somewhere between .6% and .9%. On the other hand, financial and energy sectors are up over 1%. The VIX Index jumped up to 13.5 today—still considered pretty low. Remember, the fear gauge spiked above 35 last December during the bear market correction. Investor fear, as measured by options trading activity, is near a 5-month low. Commodities are trading slightly higher today. WTI crude oil rose to $59/barrel, the highest level in 4 months. Oil has now retraced 50% of its massive plunge during the last quarter of 2018. An OPEC committee recommended deferring a decision on whether to extend current production cuts. Those cuts are what allowed oil to begin recovering in January. Bonds are mixed today, with Treasuries up slightly and corporate bonds a bit lower. The 10-year Treasury yield is hovering around 2.60%, the lowest level since January 3rd.


*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.

August 8, 2018

August 8, 2018

Stocks opened lower today on escalating trade tensions with China. The Dow is currently down 38 pts and the SPX is flat.  Losses are led by energy as well as the defensive sectors. On the other hand, banks, semiconductors and retailers are higher in early trading. Most European markets are poised to close lower by .3% and China’s stock market gave up the prior session’s gains last night. WTI crude oil sank nearly 4% to trade at $65.50/barrel after Chinese import data revealed modestly lower oil demand over the last few months. Traders are eager to jump to the conclusion that trade tariffs are damaging commodity demand. The fact is that economists are expecting global oil demand to grow 1.5% this year vs. the historical average 1%. So don’t be surprised if oil prices continue the uneven march higher. Bonds are mixed in today’s trade. The iShares 20+ Year Treasury Bond ETF (TLT) is up .1% (but is still down 6% this year). Corporate bonds—represented by the iShares IBOXX Investment Grade Corporate Bond ETF (LQD) are down about .1% today. Yields aren’t moving much. The yield curve remains pretty flat; the spread between the 2-year and 10-year Treasury yields is hovering around .30%.


*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.

April 26, 2018

Stocks gapped up at the open as investors reacted to better earnings announcements and economic data. The Dow is currently up 147 pts and the SPX is up .65%. Tech, biotech and retailers are leading the way after strong first quarter reports from Facebook (FB), Abbvie (ABBV), and Visa (V). The VIX Index is trading down around 17 and VIX May futures are trading exactly in line. So traders aren’t anticipating any blow-ups over the next month. WTI crude oil is down slightly to trade around $68/barrel. Higher oil prices boosted first quarter profits for Royal Dutch Shell, and traders are getting much more positive on the energy sector. Bonds are taking a breather after selling off hard over the last couple of weeks. While the stock market is roughly flat year-to-date, bonds are down across the board. Long-term Treasuries (iShares 20+ Year Treasury Bond ETF) are down 6.6% on a total return basis. Junk bonds (SPDR High Yield Bond ETF) are down 1.1%. Intermediate high-grade corporate bonds (iShares IG Corporate Bond ETF) are down 4.5%. That’s what happens when interest rates reset to a higher level. 


*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.

March 6, 2018

The major stock market averages opened mixed this morning. The Dow is down 104 pts and the S&P 500 is down .1%. The Nasdaq is up .14%. Utilities are down .8% and biotechs, banks and retailers are in the red. Gold miners, semiconductors and materials stocks are in the green. The VIX Index, which uses stock options to measure investor fear, is holding around 18.5. VIX March futures are at the same level. Whereas the VIX remained below 12 for most of 2017, it has been significantly higher (that is, more normal) this year. The dollar is weaker today (and down 2.7% so far this year) and commodities are mostly higher. WTI crude oil is trading down a bit to $62.30/barrel. Bonds are modestly higher this morning. The 5-year and 10-year Treasury note yields ticked down to 2.63% and 2.86%, respectively. The trend for interest rates has been mostly higher this year, so bonds have traded lower. The popular iShares IBOXX Investment Grade Corporate Bond ETF (LQD) is down 4% this year; the iShares 20+ Year Treasury Bond ETF (TLT) is down 6.5%.


*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.