unit labor costs

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.

June 6, 2018

Stocks opened higher again this morning (Dow +224 pts; SPX +.4%). Financials are rebounding over 1.5% as interest rates head higher. So not surprisingly, the utilities sector is down over 1.5%. Emerging markets funds are up 1% today and look to be recovering a bit from a beating in recent weeks. The dollar, which has been falling over the last week or so, is giving overseas stocks some breathing room. The VIX Index continues to slide, now trading under 12, suggesting little fear among investors. Commodities are mixed, with WTI crude oil down another 1% to trade around $64.80/barrel. Recall that oil was over $70 a couple of weeks ago. Bonds are selling off as yields tick up. The 5-year and 10-year Treasury yields are back up to 2.81% and 2.97%, 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.

March 7, 2018

Stocks opened lower today. The Dow is currently down 170 pts and the SPX is down .47%. The dip is not surprising considering Gary Cohn’s resignation as the president’s chief economic advisor yesterday. Most of America couldn’t care less, but the investor class is clearly worried. At the moment, most sectors are trading lower led by energy, industrials and consumer discretionary. REITs and telecoms are trading modestly higher. By the way, year-to-date if you’ve not invested in consumer discretionary, financials and info tech sectors, you likely haven’t made money. Despite the return of volatility, cyclical sectors are performing well. Today, the VIX Index is up slightly to trade around 18.5. Commodities are mostly lower with WTI crude oil down around $62.10/barrel. Oil has traded in the range of $59-$66 this year. Bonds are mostly unchanged. The 5-year and 10-year Treasury yields are holding at 2.64% and 2.87%, 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.

May 4, 2017

Stocks opened mixed this morning (Dow -14 pts; SPX flat). Consumer staples (particularly ABC, CVS, GIS) are up .7% at the moment and financials & healthcare sectors are up modestly. On the other hand, telecoms & real estate—interest rate sensitive groups—are falling. The dollar is lower today but most commodities are down as well. Gold is down 1.5%. WTI oil is down over 4.8% to trade around  $45.50/barrel for the first time since November 2016. It just blew through the key short-term support level of $47; the next support level is around $45, and then $42. Bonds are selling off too, strangely, with yields moving sharply higher. The 5-year Treasury yield is up to 1.88% and the 10-year is up around 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.

December 6, 2016

Stocks opened pretty flat this morning (Dow -7 pts; SPX +.1%). The telecom sector is up 1.2% in early trading and the semiconductors & banks are up about .5%. But most other groups aren’t moving much. The VIX Index is back down to 12 so the market is pretty complacent/calm. The dollar is up a bit today but has fallen over the last week or so. WTI crude oil is trading back down under $51/barrel. Bonds are roughly unchanged. The 5-year Treasury yield is hovering around 1.84% and the 10-year is trading at 2.39%. So not a very exciting day. 


*The foregoing content reflects the author's personal opinions which may not coincide with the opinions of the firm, and are subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk. Asset allocation and diversification does not ensure a profit or protect against a loss. Finally, please understand that–as with other social media–if you leave a comment, it will be made public.

September 1, 2016

Stocks opened lower again this morning (Dow -89 pts; SPX -.46%), and should probably be a lot lower given some surprising economic data (see below). Financials and energy sectors are down the most (over 1%) in early trading, but all 10 sectors are lower. The VIX Index is up to 14.3. The dollar is weaker but commodities are also down on the day. WTI crude is trading down around $44/barrel after a higher than expected US inventory report. Bonds are lower in price, higher in yield. So the post-Brexit trend of gradually rising interest rates continues. The 5- and 10-year Treasury yields are currently at 1.19% and 1.58%, respectively. And by the way, the 2-year Treasury yield at .79% doesn’t suggest the Federal Reserve will be hiking interest rates in the near term. 


*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.

June 7, 2016

Stocks gapped up at the open this morning (Dow +68 pts; SPX +.35%). The SPX is now only .8% away from its all-time high. The energy sector is the clear leader in early trading, up 2%. Healthcare (particularly biotech) is the only sector in the red. So gains are fairly broad-based, from semiconductors to transports to retailers. The dollar is a bit weaker on the day and oil is up yet again. WTI crude is trading up to $50/barrel. Bonds are rising in price, with yields falling. The 5-year Treasury is down to 1.22% and the 10-year is hovering around 1.71%. That’s the bottom of the yield range we’ve seen over the last 4 months. The bond sees a zero chance that the Federal Reserve will hike interest rates this month, and a 20% chance they will hike in July. 


*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.