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Good morning and thank you for reading this week’s Monday Morning Market Commentary. Before I dive into the commentary I want to let you know of a change that will be taking place in regards to these commentaries. Many of you took the time to fill out the client survey that was sent a few weeks back, so thank you. From the survey I found that over 80% of you would like monthly e-mails from me instead of weekly. Don’t worry, my feelings aren’t hurt at all, I’m actually glad to hear you don’t want me to spend every weekend writing these 
. So, this will be the last weekly commentary and starting July 1st, I will be sending out a monthly commentary within the first week of the month.
Now onto what’s been happening in the markets. We saw stocks trade in a very tight range during the short week, with the only big moves coming on Friday afternoon. Some of this was surprising, as we continued to receive very poor economic reports throughout the week from both the US and abroad. The S&P 500 ended the week down just over 1%, falling to 1,630.74.
Bond yields continued their climb from the previous week and are comfortably sitting over 2% on the 10-yr Treasury yield. Like I discussed last week, this is due to the fear of the Fed ending the bond buying program (QE) sooner than expected. While you would like this is good because it means they don’t believe our economy needs them to do as much, it also means that bond yields will most likely rise sharply, making it less affordable for business and individuals to take out loans. All these fears caused bond prices across the board to drop, leading yields to rise to levels we haven’t seen in over a year. The 10-yr Treasury yield ended the week at 2.16%, up from 2.01%. Continue reading
Tag Archives: Jobs
Does The Market Have Room To Rise Or Is It Finally Going To Pullback?
Good morning and thank you for reading this week’s Monday Morning Market Commentary. I hope everyone enjoy Mother’s Day the weekend before last and I want to thank so many of you for the kind emails, wishing Beth Ann a Happy First Mother’s Day! We had a wonderful time and she was very thankful that I spent all weekend with her and Madison. Also, for all those that filled out the client survey, thank you. I really appreciate your feedback and will be making some changes to how we work because of it.
Now onto the markets for the last two weeks. Even with so much bad news coming out about our economy and the global economy, stocks have continued their swift ascent. These past two weeks looked very similar to many of the weeks we have seen this year, with stocks pushing high into the midweek, pulling back a little midweek, and then rising to close high on Friday. The S&P 500 rose over 3% over the last two weeks, closing at 1,667.47 on Friday.
Bond yields followed along with the S&P 500, rising to just over 1.9% throughout the week. Although bond yields have diverged severely from stocks the last few years, we have seen them start to move in unison again the last few months. The 10-yr Treasury went from 1.75% two Fridays ago, to close at 1.95% this past Friday, quite a big jump over 2 weeks. Continue reading
Stocks Hit New Highs Even As Economy Shows Signs of More Weakening
Good morning and thank you for reading this week’s Monday Morning Market Commentary. As I talked about in last weeks commentary, this week was a VERY important week for the markets as we had a lot of economic reports coming out. By looking at the markets, you wouldn’t be able to tell that most of the reports showed the US economy is continuing to slow down, as stocks held up throughout the week and ended up closing at another all-time high. Bond yields followed a similar pattern for the week but are still well off their highs for the year.
All this has led to a change in our outlook for a few sectors/regions of the markets. I will be sending out an update to clients this week about changes we are recommending. Continue reading
Stocks Make Lower Highs While Bond Yields Make Lower Lows… That’s Not Good
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
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