With the government in partial shutdown, many of the departments that compile and release the economic indicators are affected. The stock market continued its rally from December 26 with news from the ISM that the services sectors also slowed in December, which was its third-largest decline since the Great Financial Crisis. The US-China trade talks … Read more
It’s not often I find myself bothered by the stock market’s reaction to the news, but the large move higher Friday didn’t make much sense to me. I understand in Bear markets, which we are in the initial stages of, that equity prices can move violently up and down. What struck me was a conversation … Read more
The US stock market quickly hit the ‘undo’ button after yesterday’s large decline on the heels of the Bank of China cutting the reserve rate for its banks. Interest payments on Chinese debts total 22% of its GDP, an unsustainable percentage, so the BoC decided more debt will help stabilize their economy. With interest payments … Read more
On the heels of Apple’s shocking first-quarter guidance, US equities were down in early trading on fears that other companies will post similar forward-looking guidance. The seven-to-ten-year Treasury bond ETF saw one of its largest inflows in several years yesterday, which quickly drove 10-year Treasury yields to 2.58% in early trading. After sales plunged -9% … Read more
US investors ignored risks from abroad by buying stocks early despite a contraction in China’s Caixin small-business manufacturing survey contracted. Following the report out of China, South Korean exports fell in December, posting a 1.2% YoY growth rate. To make matters worse, manufacturing survey’s out of the Eurozone show some countries in contraction, and the … Read more
New Year’s Eve is generally a quiet day for stocks as most professional money managers have taken a long weekend. Today will be the last day for tax-loss selling and portfolio rebalancing for the year. Foreign equities were up as China’s official manufacturing PMI fell to 49.4 in December, signaling a contraction in China’s manufacturing … Read more
On Saturday President Trump spoke with President Xi regarding their issues with the trade spat. President Trump tweeted, “Just had a long and very good call with President Xi of China. [The] deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas, and points of dispute. Big progress … Read more
In overnight trading, foreign markets followed US markets higher, which gave an early boost to US equities to start out the trading day. Treasury yields rose in overnight trading, but quickly reversed, and are back where they were in April 2017. Credit spreads or the difference between high yield and investment-grade bond yields are rapidly … Read more
Yesterday’s big move on Wall Street started to fizzle as some Asian market responded positively, but European markets didn’t. Treasury yields shrugged off the advance as 10-year Treasury yields held under their key resistance level of 2.80%. When US markets opened, equities and Treasury yields both opened lower. China’s industrial profits fell after nearly three … Read more
After Treasury Secretary Steve Mnuchin failed to reassure investors on Monday, President Trump tweeted that investors should buy stocks. Stock prices reacted positively while Treasury yields largely ignored his tweet. This week brings the remainder of $131 billion in Treasury auctions, an increase of $30 billion over last year. By the close of business on … Read more