The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
A little chop
Overseas markets fell, our yields were higher, our futures were down, crude was climbing. It was a very typical risk-off morning. The S&P opened down about 25 points and wandered around over the day. Yields eventually came down across the curve and helped equities recover at points. Crude also dropped some on the announcement from President Trump that he would not attack Iran before the midterm elections. That helped the stock bulls too a bit. Overall though, news was pretty light and price action was pretty uneventful.
It seems that yesterday’s digestion, if we can call it that, continued through today. It didn’t spook any investors and it doesn’t tell us much. Is it truly a risk-off trend or just noise?
Is the overall market nervous about rates? The financial press is covering the topic extensively, but the stock market is cool as a cucumber, at least this week. Rates came in substantially intraday and yet stocks didn’t really react. It’s all a bit puzzling.
Just recently, stocks were very tightly linked to the movement in yields. Today they were in the morning but not so much by the afternoon.
I am scratching my head at the market’s behavior and mood. It does not seem consistent with recent history and I’m doubtful that something deeply fundamental just changed during today’s session.
At some point, hopefully soon, price action will give us some hints about what the stock market is both worried and hopeful about.
See you tomorrow.
-Mike
Visdom Market Commentary
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