Where to? During the last 45 days it appears everything is going wrong at once. Commodities led by a record plunge in oil, have been crushed. In equities, the FAANG complex is down about 25%. Debt markets have been rattled by the turmoil engulfing GE and PG & E. Goldman had its worst week since … Read more
Led by tech, equites declined. There are numerous uncertainties…the Fed, tariffs, earnings, inflation, political issues including impeachment and other threats, Brexit, etc. Oil however initially rose as Saudi Arabia unilaterally reduced oil exports by 500,000/day in December, calling for other producers to do the same, cutting production 1 million barrels from October’s levels. Gains became … Read more
Equity markets led by technology staged a strong post-election advance. Gridlock is the new positive buzz word and yesterday’s era will last into perpetuity following October’s speedbump. Typically strong advances like the one experienced yesterday, the percentage of advancing S & P 500 stocks is over 90%. Yesterday it was less than 75%. The NASDAQ … Read more
Equites rallied as oil climbed to a 2016 high after Iraq’s oil minister said major OPEC and other producers will meet possibly next month is a new push to freeze output. US crude output also fell more than expected to the lowest level since October 2014. Stocks also were buoyed by better than expected earnings … Read more
FRB Chair Yellen suggested yesterday the central bank might delay, but not abandon, planned interest rate increases in response to recent turmoil in financial markets. Yellen also stated the obvious that the turbulence had “significantly” tightened financial conditions by pushing down stock prices, pushing up the dollar and raising most borrowing costs which in turn, … Read more
Stocks led by energy rallied yesterday on the belief that monetary policy will remain unchanged until March 2016, perhaps under the simplistic guise of “bad is good.” September’s ISM non-manufacturing data disappointed albeit the data is consistent with GDP growth of 3.5%. Even allowing for the weaker ISM manufacturing index, a weighted average of the … Read more
I am firm believer in the comment to never over react to one single data release. I will make an exception. The chances of a rate hike by the Fed this year just fell exponentially given September’s labor report. Payroll employment rose by a much weaker than expected 142,000 versus the consensus view of a … Read more
Stocks rallied yesterday as Treasuries tumbled as data suggested a resilient consumer. Retail sales is suggesting third quarter growth can be potentially around 3.0%. The two year treasury or the treasury most sensitive to monetary policy rose to the highest level since 2011. Against this backdrop one would think Fed Funds Futures would suggest a … Read more
Bespoke Investment Group has quantified recent market volatility. According to Bespoke, the number of “all or nothing days,” or trading sessions when the number of advancing stock minus the number of declining stocks in the S & P 500 reaches more than 400 or less than negative 400, is huge. Bespoke states since the intense … Read more
Many times I have commented about the velocity of change and to expect the unexpected. Equities had their worst month since May 2012 as the most owned momentum stocks imploded sending some issues down almost 30% in a few weeks. And then there was oil. Oil is now up 29% or $11 from its close … Read more
