wholesale inflation

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.

WHERE TO NEXT?

Stocks opened slightly lower this morning. The Dow is currently down 50 points and the SPX is down .1%. Financials (+.3%) and industrials (+.5%) are bouncing back from yesterday’s declines. On the other hand, healthcare, energy and real estate sectors are in the red. WTI crude oil fell back to $63.50/barrel in early trading. Most other commodities are down as well, partly due to a strengthening US dollar. Bonds are also trading lower as yields tick higher. The 10-year Treasury yield bounced back up to 2.49%. Only junk bonds are holding flat.


*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.

ECONOMIC DATA TO THE RESCUE

Stocks surged at the open this morning on better than expected economic data. The Dow is currently up 187 pts and the SPX is up .9%. Tech and healthcare sectors are leading the way, up over 1% in early trading. Banks, transports and biotechs are particularly strong. The VIX Index sank back toward 13.3, indicating waning investor fears. So far, the trading session can be characterized as broadly risk-on. Commodities are trading mostly higher. The Bloomberg Commodity Index is up .5% today, and 6% so far on the year. Crude oil rose to nearly $58/barrel, the highest level since November. Bonds are mostly selling off, with the exception of high-yield (or junk). After dipping to a 2+ month low, the 10-year Treasury yield ticked up to 2.62% today. Since the stock market bottomed on Christmas Eve, the 10-year yield is up only 7 basis points (or .07%). Typically, a huge run-up in stocks is accompanied by a sharp rise in yields. After all, better prospects for stocks usually causes investors to sell bonds. Not this time, and it’s mostly due to the Federal Reserve’s abrupt pause on 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.

DON'T BE MISLEAD BY NEWS HEADLINES ON THE ECONOMY

The major stock market averages opened lower today on the some disappointing retail sales data (see below). The Dow is down 107 points and the SPX is down .2%. The consumer staples sector is down over 1% after a weak earnings report from Coca Cola (KO). Financials are down over 1%, and industrials are down .6%. This could be the consolidation we’ve been expecting after a sharp rally in January. Commodities are mixed in early trading. WTI crude oil is unchanged around $54/barrel. Bonds are modestly higher in price, lower in yield. Longer-term Treasury notes—as measured by iShares 20+ Year Treasury Bond ETF (TLT)—are up about .5% today. TLT is flat on the year, whereas corporate bond ETFs are mostly higher so far in 2019. As you might expect on a day when stock prices are falling, junk bonds are also weak.


*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 11, 2018

December 11, 2018

Stocks rose at the open after a report suggesting progress in negotiating some sort of de-escalation of the trade war. The Dow is currently up 37 pts and the SPX is up .45%. The best performing groups in early trading are semiconductors, biotechs and retailers. The European markets closed up about 1.6% and most of Asia was up overnight. The dollar is stronger yet again, but WTI crude oil is up around $51.60/barrel. Bonds are trading modestly higher again. For the first time in a while we’re seeing a little rally in junk bonds. In Treasuries, we’re seeing short and long yields continue to converge. That is, you’re not picking up much additional yield for investing in longer-dated notes. The 5-year and 10-year Treasury yields are sitting at 2.71% and 2.85%, respectively. So yield curve concerns are front and center.


*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 9, 2018

August 9, 2018

The major stock market averages opened mixed this morning (Dow -30 pts; SPX flat). It’s still a trader’s market with lots of back-and-forth but no trend. But now we’re in August and there’s no trade volume to speak of. So in some respects the day-to-day commentary doesn’t matter much. Today’s trade action—defensives leading; cyclicals mostly lagging; foreign markets lower—is exactly the opposite of what we saw earlier this week. The VIX Index—which attempts to measure investor fear—is down around 10.8. The dollar is appreciating in value against a basket of foreign currencies, and is now up 3.5% on the year. WTI crude oil is up modestly to trade around $67.10/barrel. Bonds are trading slightly higher today. The 5-year and 10-year Treasury yields are back down around 2.81% and 2.94%, 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.

April 2, 2018

Stocks opened lower this morning (Dow -560 pts; SPX -2.6%). All eleven major market sectors are in the red in early trading. Tech, energy and consumer discretion are down the most. The VIX Index jumped up to 22 and VIX April futures are trading up around 21. Copper and gold are up about 1% but most other commodities are down this morning. WTI crude oil is down 2.8% to trade around $63.10/barrel. Bonds are modestly higher in price, lower in yield. The 5-year and 10-year Treasury note yields are hovering around 2.56% and 2.74%, 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.

February 15,2018

Stocks opened higher this morning. The Dow and SPX are currently 74 pts and .3%, respectively. Stocks have been in recovery mode for the last several days, but we’re still about 5.5% below late January highs. The VIX Index has receded back to 20 and VIX March futures are trading around 17.8. Commodities are mixed today. WTI crude oil is down a bit, still trading around $60.60/barrel. Bonds are trading modestly higher today. Both investment-grade corporates and junk are in the green after a rough start for the year. The 5-year and 10-year Treasury yields are hovering around 2.63% and 2.89%, 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.

December 12, 2017

Stocks surged at the open (Dow +129 pts; SPX +.28%). Believe it or not, telecoms are leading the way (+1.8%). Banks and pharmaceuticals are also up over .8%. On the other hand, the utilities sectors is down 1% in early trading. European markets are poised to close modestly higher. The VIX Index is back up to 9.5. WTI crude oil is down .8% to $57.48/barrel (still right around 2+year highs). Bonds are selling off this morning and yields are moving up after some higher than expected inflation data. The 5-year Treasury yield is up around 2.18%, the highest since April 2011. The 10-year yield is also picking up to trade around 2.42%. The next resistance level is 2.57%.


*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.

October 12, 2017

The major stock market averages gapped down at the open but quickly turned around. The Dow and SPX are currently flat. Just like yesterday’s session, defensive and interest rate sensitive sectors are leading. The only exception is telecom, down 2%. I get the sense that the stock market needs to rest and investors need to settle in and digest third quarter earnings announcements before acting with any conviction. Oil prices sank this morning; WTI crude is down 1.7% to trade around $50.80/barrel. The bond market is slightly higher as yields edge lower. The 5-year and 10-year Treasury yields are hovering around 1.94% and 2.34%, respectively. From a technical analysis perspective, the 5-year yield hasn’t been able to move above 1.96% since late March, so that’s the key resistance level to watch. 


*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.

July 13, 2017

Stocks opened slightly higher today. The Dow is current up 18 pts and the SPX is up .1%. Retailers, banks, and some tech stocks are trading modestly higher, whereas telecoms, biotechs and gold miners are lower. The VIX Index is still hovering around 10. Most commodities are lower, although WTI crude oil is up about 1% to trade around $46.10/barrel. That’s great news for the stock market. Bonds are selling off again today as yields resume their slow march higher. The 10-year Treasury yield ticked up to 2.35% and I’m guessing the 10-year will soon test near-term resistance at 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.

May 11, 2017

Stocks opened lower this morning (Dow -123 pts; SPX -.6%). Ten of eleven sectors are in the red, led by real estate, materials and consumer discretionary sectors. It does look like a pretty typical risk-off day. Small-caps, retailers, biotechs and transports are all down at least .6%. Gold miners are up over 2% and energy stocks are about flat. The VIX Index is trading back up toward 11. Believe it or not, oil prices continue to recover. WTI crude oil is trading just shy of $48/barrel this morning. The Bloomberg Commodity Index is up .3% today but still down 5% on the year. Bonds are trading slightly higher. The 5-year Treasury yield ticked down to 1.92% and the 10-year is trading at 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.

April 13, 2017

Stocks gapped down at the open but quickly recovered. The Dow and SPX are currently flat. Financials and tech are the best-performing sectors, up .3% to .5% in early trading. Biotechs are also up nicely. On the other hand, energy, materials and utilities stocks are in the red. The VIX Index is down today to 15.5. The dollar is a bit stronger today—and by the way, President Trump said yesterday he favors a weaker dollar to strengthen our global trade position. Anyway, oil prices continue to rebound and WTI crude is currently at $53.30/barrel. So it’s strange that most oil stocks (Chevron, Schlumberger, EOG Resources) are down on the day. Most other commodities are also higher, and I’ll point out that increased geopolitical tension has driven gold up 11% so far this year. Bonds are down a bit today as yields tick higher. The 5- and 10-year Treasury yields are at 1.78% and 2.25%, respectively. The next support level for the 10-year is at 2.23%.


*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 12, 2016

Stocks gapped down at the open but have pared losses. The Dow and SPX are currently off 40 pts & .1%, respectively. All three major averages (SPX, Dow, Nasdaq) hit all-time highs yesterday. Energy, utilities and consumer staples sectors are leading the way. Financials, industrials, healthcare are lagging. The VIX Index continues to fall, now trading around 11.4 and suggests very little market volatility over the next 30 days. The same is true for the VXTLT, which measures fear in the long-term Treasury bond market. The dollar is lower today and WTI crude oil is up again to $44/barrel. Bonds are slightly higher as yields dip. The 5- and 10-year Treasury yields are at 1.08% and 1.49%, respectively. Yields have been hovering in a tight range for the past month. 


*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.

July 14, 2016

July 14, 2016

The major stock market averages opened higher yet again (Dow +135 pts; SPX .55%). Financials are leading the way—for a change—after JP Morgan’s earnings announcement. The KBW Bank Index is up 1.9% in early trading. The transports are also up over 1%. That group, by the way, has been outperforming the SPX for most of 2016 and that’s a good sign for the health of the stock market. The dollar is down a bit this morning (and -3% year-to-date) and commodities are mostly higher. WTI crude oil is trading up toward $45.40/barrel. Gold is taking a breather after having surged 25% this year. Bonds are selling off as yields head higher. The 5-year Treasury yield is back up to 1.09% and the 10-year is up to 1.53%. It looks like it wants to move up past 1.6% 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 15, 2016

The major stock market averages opened higher this morning (Dow +39 pts; SPX +.27%). Financials (esp. banks) are the clear leaders in early trading (+.9%). Consumer staples and industrials are also in the green. Stocks have moved lower over the last few trading sessions after coming very close to touching all-time highs. The SPX is down about 2% over the last week. The VIX Index, which spiked yesterday to 21 (considered high), is back down to 19 today. European markets are poised to close up over 1% and most of Asia was positive overnight. The dollar is a bit weaker and commodities are mostly higher. Copper is up 2.6%. WTI crude oil is trading down, however, to $48/barrel. Bonds continue to gain in price, with yields moving lower. The 5-year Treasury yield is down to 1.11% and the 10-year is trading at 1.59%. So the 10-year yield is the lowest it’s been going back to November 2012. The bond market just doesn’t see inflation accelerating any time soon. By the way, German bond yields just fell negative for the first time ever, and that’s the other reason US bond yields are so low. Global investors are rushing to buy Treasuries because of their relatively higher yield. Huge demand for Treasuries is driving our rates 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.

May 13, 2016

Stocks are slightly lower this morning despite some better than expected economic data. The Dow and S&P 500 are currently down 41 pts & .15%, respectively. Tech and healthcare—among the worst performing sectors this year—are up modestly. More specifically, semiconductors & biotechs are faring well. On the other hand, transports & banks are weaker in early trading. WTI crude oil is down a bit to $46.30/barrel, but remember oil is hovering around the highest levels since early November 2015. So that’s constructive. Bonds are mixed, with yields moving up on the short end but down on the long end. The 2-year Treasury yield is up to .93%, but the 10-year Treasury yield is down (again) to 1.73%.


*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 15, 2016

Stocks dropped at the open again today. The Dow is down 26 pts and the SPX is off .5%. The Nasdaq is also down .5%. Energy, materials and healthcare are the worst performing sectors; all are down more than 1%. The Nasdaq Biotech Index is down more than 2.5%! We understand an executive from Express Scripts highlighted the rising cost of pharmaceuticals in a presentation this morning. So he’s just feeding the political firestorm over drug pricing. The VIX Index—a closely watched gauge of investor fear—is back up to 17. The dollar is a bit stronger on the day and commodities are lower. WTI crude oil is trading down to $36.30/barrel. The Bloomberg Commodity Index is down about .6% in early trading. Bonds are mostly unchanged; 5-year Treasury at 1.49% and 10-year Treasury at 1.96%.


*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.