- Stocks pause after best trading day of the year. (10:10am ET) Global equities are mixed this morning after major U.S. indexes posted their largest gains of the year on Wednesday, spiking more than 1%; the Dow leapt over the 21,000 mark. Also in focus is the recent surge in expectations for a rate hike when the FOMC meets later this month, having gone from roughly 30% on Tuesday to near 80% this morning following speeches from several Federal Reserve Bank (Fed) governors; Fed Chair Yellen and Vice Chair Fischer are slated to speak tomorrow. Overseas markets took a similar approach in Thursday’s session as performance in Asia varied with the Nikkei gaining 0.9% on the heels of continued dollar strength, while the Shanghai Composite (-0.5%) and Hang Seng (-0.2%) fell. In Europe, the STOXX 600 is near flat as investors digest inflation figures that came in above the European Central Bank’s 2% target, though a rise in non-core energy prices accounted for much of the increase. Elsewhere, WTI crude oil ($53.02/barrel) is pulling back after data showed U.S. stockpiles hit an all-time high, COMEX gold ($1238/oz.) is slipping, and yields on the 10-year Treasury are moving higher after a sharp jump yesterday; currently near 2.49%.
- Finally, a 1% close higher. The S&P 500 jumped 1.4% to a new all-time high and this was the first 1% close (higher or lower) since the day after the U.S. election (55 trading days). That was the longest streak without a 1% close higher or lower since 62 during the summer of 2016. Since 1970, there have been six other streaks that went at least 50 days without a 1% close higher or lower. Three of those ended with a gain and three ended with a loss. After the 1% gains, the S&P was up 1.5% a month later and up 3.1% three months later, on average. How about when the streak ended with a 1% drop? On average, the index was up 0.7% a month later and up 0.8% three months later. The S&P still hasn’t closed 1% lower for 96 consecutive days, its longest streak since 105 in 1995.
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- ISM Non Mfg. (Feb)
- Yellen (Dove)
- Fischer (Dove)
- China: National People’s Congress Meeting Begins in Beijing
Past performance is no guarantee of future results.
The economic forecasts set forth in the presentation may not develop as predicted.
The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
Stock investing involves risk including loss of principal.
Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.
Treasury Inflation-Protected Securities (TIPS) are subject to interest rate risk and opportunity risk. If interest rates rise, the value of your bond on the secondary market will likely fall. In periods of no or low inflation, other investments, including other Treasury bonds, may perform better.
Bank loans are loans issued by below investment-grade companies for short-term funding purposes with higher yield than short-term debt and involve risk.
Because of its narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.
Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments.
Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
Investing in foreign and emerging markets debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards.
High-yield/junk bonds are not investment-grade securities, involve substantial risks, and generally should be part of the diversified portfolio of sophisticated investors.
Municipal bonds are subject to availability, price, and to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rate rise. Interest income may be subject to the alternative minimum tax. Federally tax-free but other state and local taxes may apply.
Investing in real estate/REITs involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.
Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.
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