The Market Week in Review

U.S. stocks continued to sell-off as increases in the federal funds rate and low outlooks on global growth weigh on investor confidence.  Despite an increase in the federal funds rate, interest rates dropped as the 10-year treasury yield fell 10 basis points to 2.79%.  The spread between the 10-year treasury yield and the 2-year treasury yield remained unchanged at 0.14% as short-term rates also dropped.  Amid the federal funds rate hike, the price of gold jumped 1.32% to its near 6-month high of $1,258.50 an ounce.  Consequently, the U.S. dollar weakened as its index (DXY) dropped from 97.40 to 97.02. …

Predicting the Unpredictable

Highlights.   The business cycle has a significant impact on the stock and bond markets. Determining the current state of the business cycle is harder than some analysts suggest. Using the business cycle as an input for managing your portfolio’s stock-bond asset mix can lower risk and increase returns.   Discussion.   The “business cycle” refers to fluctuations in the overall economy.  These fluctuations are referred to as a “cycle” because the economy tends to rise above and fall below its long-term growth trend in a cyclical pattern, which can be illustrated as follows.     Source: www.lumenlearning.com   The…

The Market Week in Review

The U.S. stock market finished the week lower as rising fears over global growth hinders investor sentiment.  Interest rates rose slightly after dropping severely last week, with the 10-year treasury yield rising 4 basis points to 2.89%.  The spread between the 10-year treasury yield and the 2-year treasury yield rose by 3 basis points to 0.14% as short-term interest rates were little changed.  Signs of slowing growth in China had the U.S. Dollar Index reach its 19-month high of 97.40 while the price of gold, a contrarian to the U.S. dollar, dropped 0.92% to $1,242.30 an ounce.  The price of…

Know Your Limits

Investors need to be confident of their investment approach to respond wisely to market volatility.   A sound, sensible and thoroughly tested investment strategy leads to confidence.   Even a well-designed investment strategy can underperform expectations at times.   It may come as a surprise to learn that The Market Commentator is an amateur vintage-sports-car racer.  When I first started racing competitively, a veteran driver advised me that I would not know what my car and I were capable of until I spun out.  The purpose of this advice wasn’t to encourage reckless driving that could endanger myself and fellow…

The content found on this website is for informational purposes only and do not necessarily reflect the opinions or views of The Milwaukee Company or its employees. Nothing presented on this website should be regarded as investment advice or as a solicitation for the purchase or sale of any security or investment or the provision of investment advice.  Visitors to this site should conduct their own independent research before acting on any information found on this site.