A Quick Take on Markets to End the Week
Here's a quick take on various markets to end this relatively uneventful week.
(If you think Comey's testimony was a big deal, I read many Washington folks taking time away from the office to gather in various watering holes and eating establishments to watch the proceedings. Stuff like that floats their boats. But, seriously, did anything all that momentous issue from his chatter at the end of the day from the point of view of us regular folks?)
Stocks
With the Dow Jones Industrial average hitting new highs this week, following new highs in the S&P and the NASDAQ, stocks continue to look healthy. Add to this reasonably health earnings reports that - for the first time since 2011 - included revenue increases in many companies, and the near-term theoretically looks rosy - with special emphasis on "theoretically." We say this because inflation expectations, which "should" accompany a heating up of the economy, haven't really panned out. After a period of higher inflation earlier in the year, things have quieted down.
Bonds
Supporting the lower economic growth scenario, bond yields have fallen lately, after rising in the first part of the year. So after signalling a heating up economy, along with higher inflation, things have reversed. The ten-year has broken support around 2.20%, which could signal at least a short-term trend down, if not a slowing of the economy.
Gold
After a fiery start, gold turned down, but then headed up again recently. It's been as it usually is: volatile. So the ups and downs shouldn't surprise. Given that volatility, we want to look at longer trend lines. Depending on what you look at (and of course, how you see it), those trends haven't really given us a solid footing for either cutting back or increasing current positions.
Politics
And we may as well throw in some thoughts here as well. The year began with all sorts of drama and angst from those precious snowflakes who've been so mortified by the presence of Donald Trump in the White House. Conversely, supporters of the administration talked up a vision of America economically re-energized and back in the saddle as a world leader. It's hard to see how any of this has happened yet. And it's not clear it's got a very good chance of happening - at least so far.
Overall, even with new highs in the stock markets, we're mostly in stalemate territory. Yes, there's a chance that stocks will shoot for the moon, if you believe the theory that this bull market is on the cusp of a final "manic" phase where the regular guy jumps in and drives prices up - before the whole things collapses on him, as usually happens.
And yes, the fall in interest rates could signal a slowing of the economy, but that won't necessarily preclude a stock market "melt up."
Oh, and let's not forget that the summer's just about here, even given the rather wet and cool late spring we've been having here in the Northeast. It's put a bit of a damper on things. But with some really hot days coming up, I'll likely be wishing for a return to the cooler weather. The up and downs of the weather kind of mirror what the markets have been giving us lately, or so it seems.
(If you think Comey's testimony was a big deal, I read many Washington folks taking time away from the office to gather in various watering holes and eating establishments to watch the proceedings. Stuff like that floats their boats. But, seriously, did anything all that momentous issue from his chatter at the end of the day from the point of view of us regular folks?)
Stocks
With the Dow Jones Industrial average hitting new highs this week, following new highs in the S&P and the NASDAQ, stocks continue to look healthy. Add to this reasonably health earnings reports that - for the first time since 2011 - included revenue increases in many companies, and the near-term theoretically looks rosy - with special emphasis on "theoretically." We say this because inflation expectations, which "should" accompany a heating up of the economy, haven't really panned out. After a period of higher inflation earlier in the year, things have quieted down.
Bonds
Supporting the lower economic growth scenario, bond yields have fallen lately, after rising in the first part of the year. So after signalling a heating up economy, along with higher inflation, things have reversed. The ten-year has broken support around 2.20%, which could signal at least a short-term trend down, if not a slowing of the economy.
Gold
After a fiery start, gold turned down, but then headed up again recently. It's been as it usually is: volatile. So the ups and downs shouldn't surprise. Given that volatility, we want to look at longer trend lines. Depending on what you look at (and of course, how you see it), those trends haven't really given us a solid footing for either cutting back or increasing current positions.
Politics
And we may as well throw in some thoughts here as well. The year began with all sorts of drama and angst from those precious snowflakes who've been so mortified by the presence of Donald Trump in the White House. Conversely, supporters of the administration talked up a vision of America economically re-energized and back in the saddle as a world leader. It's hard to see how any of this has happened yet. And it's not clear it's got a very good chance of happening - at least so far.
Overall, even with new highs in the stock markets, we're mostly in stalemate territory. Yes, there's a chance that stocks will shoot for the moon, if you believe the theory that this bull market is on the cusp of a final "manic" phase where the regular guy jumps in and drives prices up - before the whole things collapses on him, as usually happens.
And yes, the fall in interest rates could signal a slowing of the economy, but that won't necessarily preclude a stock market "melt up."
Oh, and let's not forget that the summer's just about here, even given the rather wet and cool late spring we've been having here in the Northeast. It's put a bit of a damper on things. But with some really hot days coming up, I'll likely be wishing for a return to the cooler weather. The up and downs of the weather kind of mirror what the markets have been giving us lately, or so it seems.
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