A major question investors have struggled with is how immune is the U.S. economy to overseas malaise. The U.S. Federal Reserve believes the American economy will be resilient despite challenges. Recent data, though, suggest that the Fed may be too optimistic. Read more about Bad News May Be Good News, Again 02-03-16
The Federal Open Market Committee (FOMC), the decision-making board of the U.S. central bank, today concluded its first policy-setting meeting of 2016. Given market volatility and some soft economic data since the FOMC decided to incrementally raise the federal funds rate, the committee not surprisingly decided to hold the benchmark rate at the current 0.25 percent to 0.5 percent.
While there was little doubt that the Fed would not hike interest rates this week, market participants were curious to see how the Fed would modify its language in its scrutinized policy statement. Read more about The Fed Walks a Thin Line 01-27-16
Another day, another red day for stocks and commodities worldwide. The S&P 500 index broke through the lows set in October 2014 and at its intra-day nadir traded at a level unseen since April of that year.
Oil continues to lead the way down. Yesterday the International Energy Agency (IEA) issued a bearish monthly report that helped to drive prices further down. The international agency opined that unless something changes, global oil supply could exceed demand by 1.5 million barrels per day (bpd) and prices could go lower. Read more about Selloff Continues 01-20-16
So far 2016 has been a terrible year for the stock market. In fact, it’s the worst start ever for the S&P 500. Market participants are reducing their exposure to risky assets. Only the assets viewed as the most defensive—such as Treasuries and utility stocks—have managed to hold their ground amidst the selloff. Read more about More Fear Than Reality 01-13-16
The New Year has gotten off to a rough start as renewed panic in the Chinese stock market wreaked havoc globally. After a period of relative calm, the Chinese stock market plunged on Monday. The Shanghai Shenzhen CSI 300 Index—which tracks the largest stocks traded on the Shanghai and Shenzhen exchanges—fell 7 percent, triggering an automated trading halt. The panicky selloff carried over to other financial markets.
In the U.S., Monday marked the fourth worst first trading session of a year for the S&P 500 since the index’s 1957 inception. Read more about Eyes on China and Oil Again 01-06-16
As 2015 draws to a close, our stock, bond, and precious metals indicators are all in neutral territory, where they have been for the most part of the last month. Looking at the essentially flat performance of stocks, bonds, and gold over that period, the indicators have been pretty accurate.
Looking forward to 2016, we think where the stock market heads will depend primarily on what happens with oil, China, and the Fed. Read more about Key Factors for 2016 12-30-15
For the first time since a brief occurrence in 2013, West Texas Intermediate (WTI) crude, the benchmark for domestic oil prices, now trades at a premium to Brent crude, the WTI counterpart for the price of international crude. Before 2013, one would have to go back to 2010 to find an instance where WTI was more expensive than Brent. The fracking boom in recent years greatly increased domestic crude output, which created supply gluts and reduced oil prices at home. Read more about An Uncommon Sight 12-23-15