Market Snapshot August 23, 2019

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Good Morning on this fantastic Friday,

 

There are two main items in the news today.

 

  • China is retaliating with tariffs on US goods
  • Fed Chairman Powell’s speech in Jackson Hole was non-committal but friendly. Markets have taken his words of “carefully watching developments” to mean  a rate cut in September (futures pricing that at a 100% chance right now) and at least one more in 2019.
  • New homes decreased 12.8% to seasonally adjusted annual rate of 635,000 units last month, missing forecast of 649,000 and largest monthly drop since July 2013. However, June was revised 82,000 additional units to 728,000. Median price was $312,800, 4.5% lower than last year.
  • The yield curve remains inverted.
  • Central banks are cutting rates (minutes of the ECB meeting show the ECB will cut next month).

 

All this is good for US bond yields. It hasn’t flowed into rates yet but it will. Keep the faith. The Dow is down 500, the 10yr yield down to 1.51%.. Sunshine on the horizon

 

Enjoy the weekend and make today great!