Morning Note: “At the right price, markets function”

Asian equities traded mostly higher overnight, with 11 of the 16 markets we track closing in the green. European markets are liking the news out of their auto sector, plus I suspect optimism around Brexit isn’t hurting either, as 16 of the 19 bourses we follow are in the green as I type. U.S. stocks are searching for direction this morning as disappointing earnings reports from chip makers has tech trading a bit lower: Dow up 28 points (0.10%), S&P 500 up 0.13%, Nasdaq down -0.35%, Russell 2000 up 0.17%.

The VIX (SP500 implied volatility) is down -1.25%. VXN (Nasdaq vol) is down -0.34%.

Oil futures are off -0.27%, gold’s down -0.13%, silver’s down -0.13%, copper futures are down -0.62% and the ag complex is down -0.34%.

The 10-year treasury is trading slightly lower (yield slightly higher) and the dollar’s down -0.08%.

Led by banks, energy, Eurozone stocks, Verizon and financials, our core portfolio is up 0.20% to start the day. Tech, emerging market equities, ag commodities, silver and base metals are drags.

Economist Peter Boockvar’s comment on credit markets (in a RealVision interview yesterday), to no small degree explains the somewhat perplexing buoyancy of the stock market (although all boats have definitely not risen with the tide) amid such stormy macro conditions (i.e., the Fed’s got its back):

“The Fed itself has broken the market because they’ve created such a sense of dependency and the market thinks that without the Fed it can’t function. At the right price, markets function. That’s how markets work.”

Next up our weekly macro update…

Have a great day!
Marty

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