Market Snapshot October 7, 2019
Good Morning on this fantastic Monday,
The Dow is flat and bond prices are as well. Concerns that China is going to use the Impeachment procedures to strike a better trade deal has the markets in a wait and see pattern. The latest rhetoric is that China wants to narrow the discussions and make a smaller deal that will be easier for them to accept while stopping further tariffs. President Trump is stating that won’t happen. The impeachment process is a huge distraction. Historically this level of uncertainty would be a risk off signal and bonds would benefit.. We are not seeing any of that yet which makes me nervous. Last week’s move was data driven as the economy continues to slow and the odds that the Fed will cut in October has increased (maybe this is the reason stocks are hanging tough). It’s a big news week with key inflation numbers and the Fed minutes coming our way, but that’s a few days out. Technically, bonds are trying to push through resistance once again. Whether we succeed or not will depend on the inflation numbers and whether or not the market concern about the above items escalate. The signals are there for rates to improve but for some reason it feels just uncertain now. I do think we go lower but do not think it will be a straight line.
Make today great!