Market Brief – Tuesday 10/2/18

The DJIA set a new all-time high today as the S&P 500, Nasdaq-100 and Russell 2000 all closed lower. It now takes the average American worker 1,164 hours to buy one share of the Dow Jones Industrial Average!

Treasury yields moved down in early trading, jumped on remarks from Fed Chair Powell that the Fed was likely to continue raising the Federal Funds rate, and then fell in late afternoon trading. Treasury short-sellers continue to lay siege to the bond Bulls, but they aren’t gaining any traction for their effort.

The biggest buyer of Treasury bonds is commercial banks who have expanded their purchasing of Treasuries over the past four weeks at a rate of 15% year-over-year. Bankers have a great deal of information on the economy and when they are buying, investors should take heed.

Technical traders are indicating that physical gold and silver could both be near breakouts to the upside. The largest gold mining EFT, symbol GDX, continues to run into a wall at $19 per share. A CEO of a large gold miner purchased an estimated 2.5 million shares of his company stock recently. When corporate insiders are buying, it’s an indication of where prices are headed in the future.

Agricultural commodities jumped on strong volume day and the broad-based agricultural commodity EFT, symbol DBA, closed over its 50-day moving average. Today’s volume and price action is indicating higher prices are likely to come.

According to a recent survey by the Federal Reserve, U.S. households reported 34.3% of their financial assets are invested in stocks as of the second quarter. This is the second highest level in history, with the dot-com bubble being the highest.

In another survey published by the MIT Sloan School of Business, Republicans bought stocks following the Presidential election, while Democrats bought bonds. Republicans have won in the short-term, but will they win in the long-term?