Reviewing the Week and Checking In With Some Experts
After reviewing the past week's price action, there's not a whole heck of a lot to say.
Stocks continued to show strength, even in the face of some down days. Buyers keep stepping in to keep prices from falling too far. The gains since that nasty December still (at least to me) look like a bear market rally.
Is that "Melt Up" in stock prices still in play? Yes. Again, nothing has changed that.
Bonds seemed to "reverse" when Fed Chairman Powell basically put on his put. You remember that string of puts we've had since the 1990s: the Greenspan put, the Bernanke put, the Yellen put? Well, it seems we've got a Powell put to add to the string. The only difference we can ascertain this time around is this one comes with alliteration. The result: Wall Street gets to dig deep, take risk, and rake in the dough, knowing someone's got their back. It's been their tried and true method that somehow survived even the 2007-2009 financial crisis. As the saying goes, never look a gift horse in the mouth.
As for bonds, you really can't call the action a reversal. Sure, for a while yields declined for a bit, with prices thereby rising. But the general trend that seemed to establish itself for the longer term was rising bond yields, falling bond prices - basically a momentous change in trend from the long-term bond bull market that began around 1980. In that context, recent rising yields confirm that trend reversal, something that's been in place for a while. For now, we'll stick with the bond bull market ending, and a new (and likely very long-term) bear market beginning. Yes, you can a few who claim that bull isn't dead; or a few more who think we'll be stuck in a tight range of low yields that will sustain bond prices for - potentially - years. If we do, it should sustain stock prices for - what, years? I don't know, but it seems unlikely.
Then there was gold. Ah, precious gold, and it's precious cousins, silver, platinum, palladium. Week's end saw a rather dramatic drop down through 1,300, along with a commensurate swoon in metal mining stocks. What happened to all that momentum that seemed to be building for precious metals and the companies that mine them? Was that yet another head fake, one in a frustrating chain dating back now over two years? Surely something happened there?
Well, it's more likely that gold has taken a rest. Our trusted source and their reliable indicators tell us that we could see a drop to 1,275 without disturbing the overall upward thrust. Gold would have to plunge through that level, sink lower, and stay there to upset the apple cart.
And so we're left with - nothing.
Frankly, it may be time to get on with more important topics than asset prices. It certainly would be more interesting.
Of course, that means carving - or at least scratching - out some time. At the moment, though, we're in the midst of annual filings for our company's regulator (ah, compliance, how we hate thee!) as well as a determined effort to get our taxes filed early this year. Waiting for the last minute has never been fun and over the last few years we've managed to get organized well enough to stay at least a couple of steps ahead of the proverbial curve. Never one to look a gift horse in the mouth, the fact that we can get these two odious tasks out of the way means that's the priority this week. Not quite that Powell Put gift horse presented to Wall Street, but we'll take what we can get.
After that, we'll see how things go.
Stocks continued to show strength, even in the face of some down days. Buyers keep stepping in to keep prices from falling too far. The gains since that nasty December still (at least to me) look like a bear market rally.
Is that "Melt Up" in stock prices still in play? Yes. Again, nothing has changed that.
Bonds seemed to "reverse" when Fed Chairman Powell basically put on his put. You remember that string of puts we've had since the 1990s: the Greenspan put, the Bernanke put, the Yellen put? Well, it seems we've got a Powell put to add to the string. The only difference we can ascertain this time around is this one comes with alliteration. The result: Wall Street gets to dig deep, take risk, and rake in the dough, knowing someone's got their back. It's been their tried and true method that somehow survived even the 2007-2009 financial crisis. As the saying goes, never look a gift horse in the mouth.
As for bonds, you really can't call the action a reversal. Sure, for a while yields declined for a bit, with prices thereby rising. But the general trend that seemed to establish itself for the longer term was rising bond yields, falling bond prices - basically a momentous change in trend from the long-term bond bull market that began around 1980. In that context, recent rising yields confirm that trend reversal, something that's been in place for a while. For now, we'll stick with the bond bull market ending, and a new (and likely very long-term) bear market beginning. Yes, you can a few who claim that bull isn't dead; or a few more who think we'll be stuck in a tight range of low yields that will sustain bond prices for - potentially - years. If we do, it should sustain stock prices for - what, years? I don't know, but it seems unlikely.
Then there was gold. Ah, precious gold, and it's precious cousins, silver, platinum, palladium. Week's end saw a rather dramatic drop down through 1,300, along with a commensurate swoon in metal mining stocks. What happened to all that momentum that seemed to be building for precious metals and the companies that mine them? Was that yet another head fake, one in a frustrating chain dating back now over two years? Surely something happened there?
Well, it's more likely that gold has taken a rest. Our trusted source and their reliable indicators tell us that we could see a drop to 1,275 without disturbing the overall upward thrust. Gold would have to plunge through that level, sink lower, and stay there to upset the apple cart.
And so we're left with - nothing.
Frankly, it may be time to get on with more important topics than asset prices. It certainly would be more interesting.
Of course, that means carving - or at least scratching - out some time. At the moment, though, we're in the midst of annual filings for our company's regulator (ah, compliance, how we hate thee!) as well as a determined effort to get our taxes filed early this year. Waiting for the last minute has never been fun and over the last few years we've managed to get organized well enough to stay at least a couple of steps ahead of the proverbial curve. Never one to look a gift horse in the mouth, the fact that we can get these two odious tasks out of the way means that's the priority this week. Not quite that Powell Put gift horse presented to Wall Street, but we'll take what we can get.
After that, we'll see how things go.
Comments