monetary policy

INCREASING PRESSURE ON CHINA

The major stock market averages gapped up at the open, but quickly faded. The Dow is currently up 47 pts and the SPX is up .29%. Energy is the best performing sector, up 1.1% on higher oil prices. And unlike yesterday, cyclical sectors are faring well but defensives are in the red. There’s just no discernible trend in the market this week. European stock markets closed roughly flat this morning and most of Asia was lower overnight. Hong Kong protests over a proposed extradition law are gaining momentum and have grown violent. Bloomberg reports hundreds of thousands of people are involved. Hong Kong is officially autonomous but China’s communist party exercises effective control. Commodities are trading sharply higher, led by oil. WTI crude oil climbed back to nearly $53/barrel after terror attacks—likely initiated by Iran—on two oil tankers in the Strait Hormuz. Bonds are again moving higher in price, lower in yield. The 10-year Treasury yield is hovering around 2.10%.


*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.

FED TO THE RESCUE

The major stock market averages opened a bit higher this morning (Dow +50 pts; SPX +.25%). This week has been one of recovery, especially after a couple of Federal Reserve officials hinted that they’d loosen monetary if necessary to keep the business cycle alive. Energy is the best performing sector in early trading, up 1.2% despite the fact that oil prices are down again. Some kind of bounce is to expected since energy has absolutely cratered over the past six weeks on oversupply concerns. Today, WTI crude oil is down .6% to trade around $51.44/barrel. Gold is now up 4% on the year as a safe-haven trade. Bonds are trading higher this morning as yields dip again. The iShares 20+ Year Treasury Bond ETF (TLT) shot up 1% today as the 10-year Treasury bond yield fell back to 2.09%. The reason for continued bond market gains is also the Fed (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.

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.

TRADE WAR JITTERS CONTINUE

Stocks headed lower again this morning on (what else?) trade war headlines. The Dow is currently down 350 pts and the SPX is down .7%. All eleven major market sectors are lower, led by tech (-1.2%) and materials (-1.3%). The VIX Index spiked to nearly 22, suggesting traders are getting nervous. European markets closed down by nearly 2% and Asian markets were down nearly that much overnight. China’s Shanghai Composite Index was down 1.5% last night and has fallen almost 13% since April 19th. Commodities are down today, except for gold. WTI crude oil is down 1% to trade around $61.50/barrel. Bonds moved higher as the 10-year Treasury yield fell back to 2.44%. Junk bonds, however, are down about .4%.


*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.

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.

JOBS REPORT TO THE RESCUE

Stocks opened higher this morning after the Bureau of Labor Statistics released its March jobs report (see below). The Dow is currently up 34 pts and the SPX is up .38%. Nine of eleven major market sectors are trading higher, led by energy (+1.5%) and healthcare (+.8%). The communications services sector is flat. Small-caps and emerging markets equities are outperforming today. The US dollar is slightly higher in early trading, and commodities are mixed.


*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.

IT'S ALL ABOUT INTEREST RATES

Stocks sank in early trading (Dow -152 pts; SPX -1%). All eleven major market sectors are down, led by energy (-1.4%), healthcare (-1.3%) and tech (-1.3%). Interest rates are driving the stock & bond markets today (see below). European markets lost steam at the end of their session, closing roughly flat. Commodities are mostly lower today (copper -.3%; gold -.4%; iron ore -.2%). WTI crude oil backed down to $59.50/barrel. Bonds are, not surprisingly, higher on the day as yields tick lower. The 10-year Treasury yield fell to 2.37%, the lowest level since December 2017. Persistent concerns about global economic growth are propping up the bond market.


*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.

IT'S ALL ABOUT THE FED

Stocks opened sharply higher today (Dow +161 pts; SPX +.67%). Interest-rate sensitive sectors are moving in response to yesterday’s Fed meeting (see below). Homebuilders, REITs, and utilities are up nicely, while banks are down on the day. Commodities are mixed (gold down, copper and iron ore up). WTI crude oil is flat, hovering around $60/barrel. Bonds are sharply higher as well. The 10-year Treasury yield slipped to 2.52% after the Fed announcement. That’s a 14-month low. The yield curve flattened again; the difference between the 2-year and 10-year Treasury yields is down to 11 basis points (.11%).


*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.

DOUBLING DOWN ON A DOVISH FED

The major stock market averages are mixed in early trading (Dow -70 pts; SPX +.5%; Nasdaq +.6%). Gold miners, healthcare, and energy exploration stocks are all up about .7% to 1.2%%. On the other hand, airline and aerospace names are trading lower, paced by Boeing (BA) down 6.7% after the Ethiopian Airlines jet crashed. Retailers and consumer staples names are flat to down at the moment. The US dollar is weaker today after a softer inflation report (see below), and not surprisingly, commodities are trading higher. WTI crude oil is back up around $57.22/barrel. Copper is up .5% today and 12% on the year, reflecting optimism over a potential trade deal. Copper is sort of a commodity trader’s referendum on the Chinese economy, since China accounts for half of global copper demand. Bonds are mostly higher today as yields tick lower. The 10-year Treasury yield fell to 2.63%, the lowest in the past 6 weeks.


*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.

SOFT ECONOMIC DATA IN FOCUS

SOFT ECONOMIC DATA IN FOCUS

Stocks opened lower today but are clawing back (Dow -63 pts; SPX -.16%). The energy sector is leading to the downside (-1.6%), along with biotechs (-1.4%). Defensives—utilities, consumer staples—are faring better. The VIX Index, down under 15, is suggesting low volatility over the next 30 days, despite the US-China trade deadline in March. The dollar is a bit stronger today and commodities are trading mostly lower. WTI crude oil is down around $56.80/barrel. Copper and iron ore are also in the red. The flavor of the day is clearly risk-off. However, the bond market is down as well. Long-term Treasury bonds, which usually trade inverse to stocks, are down nearly 1% today. The 10-year Treasury note yield shot up to 2.69%.


*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 IN A HOLDING PATTERN

STOCKS IN A HOLDING PATTERN

The major stock market averages opened roughly unchanged this morning (Dow & SPX flat). The materials sector is leading the way (+1.4) on higher commodity prices and optimism over a potential US-China trade deal. Semiconductors and gold miners are up 1%+, energy stocks are up over .5%, and banks are up .3%. The healthcare sector is lower after CVS Health (CVS) reported quarterly results. REITs are down nearly 1% in early trading. Commodities are trading higher today. Copper and iron ore—which tend to move on China’s economic outlook—are up 12% and 26%, respectively, so far this year. WTI crude oil is back up to nearly $57/barrel. Bonds are mostly lower in price, higher in yield today. The 10-year Treasury yield is up slightly to 2.65%.


*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.

RISING INFLATION SAYS RECESSION NOT IMMINENT

RISING INFLATION SAYS RECESSION NOT IMMINENT

Stocks gapped up at the open this morning, but quickly faded. The Dow is currently up 70 pts and the S&P 500 (SPX) is up .2%. Gains are broad-based, led by energy, semiconductors and transports. Defensive sectors like utilities aren’t really participating. The VIX Index has stabilized below 16 over the last week. Foreign stock markets are acting better—especially China—and that suggests some expectation for resolution of trade concerns. Traders are excited about the fact that the SPX closed above its 200-day moving average for the first time in over two months. The index is now only about 6.5% below its all-time high reached 13 months ago. So risk assets are acting better this year. The Bloomberg Commodity Index (BCOM) is up 4.5% so far in 2019. WTI crude oil is back up over $54/barrel. Iron ore and copper are also climbing. I’ll point out that while falling commodity prices were seen as a very scary sign of falling economic growth in 2018, very few are seeing the commodity recovery as a sign global economic improvement.


*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 SENTIMENT

IMPROVING SENTIMENT

Stocks opened higher again today, as investor sentiment gradually improves. The Dow is currently up 143 pts and the SPX is up .5%. Tech, energy, healthcare and industrials are up nicely in early trading. Utilities, consumer staples, real estate and communications services are in the red. European stock markets will close up by about .5% and Asia was broadly higher overnight. The Shanghai Composite Index, China’s main stock index, closed up .7%. The dollar is down about .5% against a basket of foreign currencies. That’s a big deal. Dollar weakness means emerging markets stocks do better; it means US multi-national exporters do better; it signals that investors believe inflation is well under control and the Fed won’t be aggressive with monetary tightening. It might even signal more optimism (among traders) that the trade war can be resolved. All else equal, commodities generally rise as the dollar weakens. WTI crude oil is up nearly 3% today to trade at $51.25/barrel. Copper and gold are up modestly as well. Bonds are trading slightly higher as well. Both investment-grade and high-yield corporate bond ETFs are up about .2% today. The exception is long-term Treasuries. Whereas the 5-year and 10-year Treasury yields are basically flat to slightly lower, the 30-year Treasury yield jumped up to 3.02%. And remember, we want Treasuries to sell off when the stock market is moving higher. I can’t emphasize enough how closely traders are watching the bond market as a signal to whether the stock market recovery can continue.


*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 4, 2019

January 4, 2019

The stock market gapped up at the open after an encouraging jobs report (see below). The Dow and SPX are currently up 650 pts and 3%, respectively. Tech—hated by traders yesterday—is the best-performing sector, up over 3.5%. The materials sector is up 3% in early trading. Transports—again, hated yesterday—are up over 3% as well. The VIX Index is back down to 22.7, exactly even with VIX January futures. Traders are wondering why, when the market is now routinely moving more than 2% per day, the VIX isn’t well into the 30s. It may no longer be an accurate reflection of market volatility. European markets will close up over 2% in today’s session. The Chinese stock market has stabilized over the last several days, so that’s good news. After the release of the jobs report this morning, the dollar strengthened and bonds sold off. Opposite of the recent trend, Treasury bonds fell in price but junk bonds rose. The 10-year Treasury Note yield climbed back to 2.66%, surging 10 basis points from yesterday’s level. Bond yields provide different signals depending on the economic & market situation. At this moment, rising yields will signal some relief that perhaps the economic outlook isn’t as dire as the bears think.


*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 20, 2018

December 20, 2018

Stocks sagged at the open again today following another interest rate hike by the Federal Reserve (see below). The Dow is currently down 367 pts and the SPX is down 1.5%. This looks like another risk-off day, with cyclical sectors like tech, energy, and consumer discretionary sectors down the most. The utilities sector is up 1% as retail investors look for safety. European markets are down more than 1% and Asian markets were down at least that much overnight. The dollar is weaker today after the Federal Reserve downgraded its outlook for US economic growth (see below). Copper and gold are trading higher, but WTI crude oil fell back to $46.20/barrel. Believe it or not, most of the bond market is trading lower as well. High-grade corporates and junk bonds resumed their slide. Long-term Treasury bonds, however, are moving higher in response to the Fed meeting. The 10-year Treasury note yield is hovering around 2.77%, the lowest level since April.


*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 19, 2018

Stocks surged at the open this morning, but who knows how the session with end? The Dow is currently up 175 pts and the SPX is up .68%. A few market sectors are up about 1%: energy, financials, materials. Most everything is trading higher, save gold miners and semiconductors. European markets are up about .3% to .9%, although Asia was mixed overnight. WTI crude oil, which has fallen out of bed since early October, is up 3% to about $47.65/barrel. OPEC says it will reduce production by about 1.2 million barrels per day but those cuts won’t go into effect until next month. At the moment, production in the US, Russia and Saudi Arabia is near record levels. Bonds are trading modestly higher in front of the Fed meeting today (see below). Since early November, bonds have done very well and that of course means interest rates have fallen. The 2-year Treasury note tends to move along with expectations for Fed rate hikes, and since November 8th the 2-year yield has declined to 2.66% from 3.1%. That probably means bond traders are predicting a pause in monetary tightening.


*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.