Friends
Well, the bears decided to fight back today, but didn’t really do that much damage. Before the opening bell the retail sales report was about as expected, nothing to write home about, but not terrible, but the bulls couldn’t drum up enough interest at the opening and by late morning the Dow had dropped more than 75 points. The rest of the trading session stocks drifted into negative territory without much conviction.
For the day, the Dow Jones Industrial Average was down 36 points to close at 13,982. The S&P 500 was up a fraction to finish the day at 1520. Gold was down $7 to trade at $1642 per ounce, while oil was down $.35 to trade at $97.16 per barrel WTI. The Dow continues to straddle the 14,000 level, but the S&P has been able to remain firmly above 1500. Take what you want from that, but the longer we linger in this area, the better chance that overbought conditions are erased and the rally could continue.
Today’s Treasury auction of 10 year notes was a reminder that the government bond market is a very tender situation. The yield on the 10 year note came in over 2%, and though I know that doesn’t sound like much, it wasn’t that long ago the 10 year yield was under 1.60%. Today’s auction showed disappointing participation, and we believe that this is just a reminder that someday fixed income investors are going to be demanding higher yields. The ending of a bull market is a process, not a point in time, but today serves as a reminder that the end of the 30 plus year bull market in bonds is in our future.
We’ll see what the rest of the week holds for stocks, but so far the bulls are hanging on and the bears continue to be frustrated. We’ll check in with you tomorrow.
Have a nice evening everyone.
