Market Snapshot March 13, 2019

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Good Morning on this fantastic Wednesday and best day of the week,

 

I was reminded yet again this a.m. when I dropped my 7-yr old off at school without a jacket that my parenting skills are suspect. It’s not that I didn’t recognize it was 47 degrees. I asked him to bring his jacket when we left home. It was more that he told me (and I accepted) that he had a shirt on underneath which was fine for him. Seemed reasonable at the time.

 

Yesterday was an interesting day with news of another failed Brexit vote, more data showing a slowing economy and a terrific 10-yr Treasury auction. Bonds were on a tear and the 10-yr closed at 2.61%. Stocks took a hit as well over the money flowing to bonds. This morning, well, things are a shade different. Economic data has Durable goods (jumped .8% vs an expected +.1% and the largest increase since last July) and PPI +.1% and 1.9% annually. Stocks are loving the first release and bonds are content with the second. For bonds inflation is always the concern. PPI continues to show no inflation pressures and bonds are hanging tough.  The 10-yr at 2.62% and mortgage bonds flat on the day. Rick Santelli from CNBC shared an interesting observation a few minutes ago. If the 10-yr dips below 2.55% in the next weeks (end of March or early April) stocks are likely to fall/fail. If not, rates are going north for the spring. I can get into the details another time, but it is a pretty solid read/expectation.

 

From a lock/float perspective, we closed above resistance yesterday and are still above that level today. I would wait until the end of the day to make a decision. If we hang tight or improve, I might float another day. If we tail off, I would lock.

 

Make today great!