Market Snapshot November 7, 2018
Good Wednesday A.M.,
Quick recap on the elections in case you are living without any connectivity (which I guess would also indicate you’re not getting this email). Elections had something for everyone. The Democrats won the majority back in the House, the Republicans kept the Senate and likely added a bit to their majority (maybe two or three seats). What happens now… well, the equity markets are digging the results and are up big (Dow up another 350 today). Bond markets also having a positive day, as I would guess the short sellers are starting to pare their positions. The 10-yr is at 3.19 and mortgage bonds are +22bps. The Fed starts their November meeting today and we will hear what that have to say tomorrow at 11. No change in rates expected but it will be interesting to see if the statement mentions the election results as a potential drag on growth. If so, markets would get the impression the number of rate hikes could be tempered. I still think we get a December hike, but 2019 is a bit more curious on the morning after. I do think that it will take a few days to flush out which direction markets (particularly bonds) will head and it is probably best to lock today ahead of the Fed meeting.
Make today great!