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Good morning and thank you for reading this week’s Monday Morning Market Commentary. This past week we saw stocks rise all week, even as we received more and more disappointing economic and earning reports. Bonds, however, did seem to notice all the disappointing reports as yields dropped to lows for the year.
Let’s first look at the chart of the S&P 500 from last week. As I said and you can see, stocks rose throughout the week, with Friday being the only down day. Most indices were able to get back half of what they had lost the previous week, but this marks a lower high for stocks, which isn’t usually a good sign. The S&P 500 finished at 1,582.24, or 1.74%.
This week we saw bond yields continue their divergence from stocks and bonds put in a low for yields this year. Bond yields were basically flat all week with the big drop came after we received the disappointing GDP report on Friday morning. The 10-year Treasury yield finished the week quite a bit lower, ending at 1.66%. Continue reading
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Jobs Report Hurts Stocks and Brings Down Bond Yields
Good morning and thank you for reading or watching this week’s Monday Morning Market Commentary. This past week we started to see a breakdown in the US markets that I have been talking about for quite some time. The week started off down and pretty much stayed down all week because of many pretty bad economic reports. We saw the biggest drop on Friday after an absolutely dismal jobs report came out. I’ll spend some time diving into this report because it sheds quite a bit of light into what is going on in the economy right now.
As usual, let’s first look at the chart of the S&P 500 from last week. After hitting all-time new highs, stocks took a big breather this week and spent most of the week in the negative. Between the US ISM Manufacturing index dropping, Europe’s unemployment hitting another new all-time high, huge rise in initial jobless claims, ADP jobs report also missing big, and the number of jobs added last month being just a quarter of what was expected, stocks really didn’t stand a chance. This all leads to an even bigger question, is the worst still ahead. The S&P 500 finished down to 1,553.28, losing just about 1% for the week.
Although stocks dropped this week, bonds continued to diverge from stocks and we saw the 10-yr Treasury yield drop to four month lows. Unlike the stock market, bonds didn’t rise throughout the day on Friday and closed near their lows for the week. The 10-yr Treasury yield had the biggest weekly drop in yields since June 2012. It ended the week all the way down to 1.694%. Continue reading
Is This The Never Ending Rally? Techinicals & Copper Prices May Be Warning Otherwise
Good morning and welcome to another Monday Morning Market Commentary. Thank you for taking the time to read/watch this week. This week we saw stocks rally sharply throughout the whole week, leading the Dow Jones Industrial Average to reach it’s highest level ever and the S&P 500 to come within 1%, and bonds followed suit, with the 10-Yr Treasury yield back above 2%. We had a good employment report on Friday but some very worrisome reports out of China throughout the week.
This week I cover a little bit of everything: some economic data, some fundamental data, and a little technical analysis.
Stocks & Bonds Disagree About Sequester and Where To Go Next
Good morning and thank you for reading/watching this week’s market commentary! Last week we had one heck of a roller coaster ride in the stock market as stock dropped sharply at the beginning of the week but made a comeback to finish basically flat. The big drop on Monday came after the Italian election resulted in a mixed government, with not one party winning enough votes to rule as majority. Stocks then recovered throughout the week as Bernanke reassured Congress that the Fed is going continue the QE programs until they see the economy recover more. The other positive notes were that we saw the 2012 Q4 GDP number revised to just barely positive and initial claims drop again. On the negative, we saw income drop the most it’s done in 20 years and we also had our politicians push us full on into the sequester. I’ll talk about all this in just a minute.
By looking at the chart of the S&P 500 we can see this volatile ride quite clearly. The market was quite choppy all week as investors digested all the data that was reported this week. There was also quite a bit of buzz about the Dow Jones Index this week as it was within 1% of hitting an all-time high but failed to. The S&P 500 did rise, just barely, for the week, to close at 1,518.20.
Bonds yields didn’t follow the stock market back up after the drop early in the week. As I’ve said many times, I trust the reaction in the bond market more than the stock market and am worried to see the bond yields dropping again. The 10-Yr Treasury yield dropped from 1.967% last week to 1.853% this week.
Stocks Pushed To Five-Year Highs on Employment & China GDP Reports
Good morning and welcome to another Monday morning market commentary. This past week we saw stocks rise to levels we haven’t seen in 5 years. Stocks rallied on economic reports showing that the unemployment picture in the US may be getting better and that China isn’t slowing down as much as people had worried.
All the major stock indices rose this week after trading down most of the week. The big rally came during the last hour of trading on Friday as many traders wanted to buy in before the long weekend. The S&P 500 closed at 1,485.98, up 0.95% for the week and 4.19% YTD.
Bonds reacted similarly to stocks most of the week but diverged on Friday as yields came off the highs of the week. The 10-year Treasury stayed below 1.9% all week and closed at 1.84% on Friday.