Market Update: Friday, September 9, 2016


  • Stocks’ slide continues; oil pares gains. U.S. equities are following overseas markets lower this morning as traders focus on a slate of Federal Reserve Bank (Fed) speakers ahead of next week’s policy meeting and eye falling WTI crude oil prices, which are off more than 2%. Today’s weakness comes after major indexes saw modest declines on Thursday despite a 4.6% rally in crude, spurred by a surprise drawdown in inventories. The move stoked energy sector shares, which gained along with healthcare, REIT, and utilities stocks; though the other seven sectors declined. Overseas, European markets are mostly lower in midday trading with the STOXX Europe 50 down 0.7%. Meanwhile, Asian indexes closed out the week on a mixed note: the Nikkei was flat, while the Shanghai Composite and Hang Seng indexes moved in opposite directions, down 0.6% and up 0.8%, respectively. Elsewhere, COMEX gold is lower, Treasury yields continue to rise, the yield on the 10-year note is at 1.66%, and the dollar is mixed.


  • What is the VIX saying? With the S&P 500 currently in the tightest 40-day range (using closing prices) ever at 1.54%, volatility has been muted. You can’t talk about volatility without mentioning the Volatility Index (VIX), so what is it saying now? Well, the VIX has been beneath its 50-day moving average for 49 straight days. Going back to 1990, this has only happened 16 other times. The big question is, what does this mean? Today on the LPL Research blog we dive into this question.
  • Week ahead. Early in the week, focus will be on a trio of Fed speakers (Brainard, Lockhart, and Kashkari) ahead of the quiet period before the September 20-21 Federal Open Market Committee (FOMC) meeting. Fed policymakers and market participants will have plenty of U.S. data to digest next week, including the September readings on manufacturing in Philadelphia and New York, and August readings on small business sentiment, retail sales, Consumer Price Index (CPI), and industrial production. Overseas, the Bank of England meeting highlights a busy week, which includes the German ZEW index for September and post-Brexit readings on retail sales, industrial production, and employment in the U.K. EU leaders will meet late next week to discuss Brexit, and China will release August data on property prices, retail sales, fixed asset investment, and industrial production.
  • Over the last month, the LPL Financial Current Conditions Index (CCI) was unchanged at 212. The CCI has now rebounded well off of its January lows and remains in the range it has held for most of the current expansion. All 10 components of the CCI were relatively flat, with improvement in shipping traffic and credit spreads offset by a small increase in volatility and a rise in unemployment claims off of nearly 40-year lows. View the CCI.



  • European Union: Central Bankers and Finance Ministers Meeting in Bratislavia
  • China: New Loan Growth and Money Supply (Aug)


  • European Union: Central Bankers and Finance Ministers Meeting in Bratislavia

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