Friends
Whether it is because of trade war consequences (likely) or simply that stocks are too expensive (not necessarily), stocks are experiencing a correction. We have many times in the past referred to market action as our guide as to just what we are experiencing at any given moment in time, and recent market action (the past five weeks) has been challenging for the bulls. Even up days have ended on a sour note lately, and today’s action is very typical of a correction. Stocks attempted to rally early, but rolled over as the trading session wore on and closed at the lows for the day. So far, the damage has been contained, perhaps because hopes that a trade war will be avoided still permeate the market, or maybe just because interest rates continue to fall and stock valuations are “reasonable”
Regardless, by the close the Dow Jones Industrial Average was down 237 points to finish the day at 25,347. The S&P 500 was down 23 points to close at 2,802. Gold was down $4 to trade at $1,278 per ounce, while oil was up $.29 to trade at $58.92 per barrel WTI.
Stocks are down just about 5% from earlier year highs, a very normal occurrence at least once or twice a year in a typical year. Will this develop into something more? Well, the bond market is sure sending an ominous signal as the yield on the 10 year Treasury note continue to tumble (2.26% near the close today). We’ve had mixed signals from stocks v bonds for some time now. The bears are counting on the bond market being right this time. We’ll continue to report as the battle plays out.
Have a nice evening everyone.
