|Day's range||26,020.06 - 26,215.84|
|52-week range||21,712.53 - 27,398.68|
U.S. stocks rallied Monday morning in an at least temporary reprieve after a mid-August rout. U.S. government bond yields rose across the curve, led by yields on 30-year bonds and 10-year notes.
Investors await commentary from Federal Reserve Chair Jerome Powell this week at the annual Jackson Hole conference on Friday.
Based on the early price action, the direction of the September E-mini S&P; 500 Index the rest of the session on Monday is likely to be determined by trader reaction to the short-term 50% level at 26215.
Stocks retraced some of their recent declines on Friday, as investors’ sentiment improved following bouncing off the short-term support level, economic data releases. The S&P; 500 index continues to trade within a consolidation. Is this a bottoming pattern or just a flat correction before another leg down?
Based on Friday’s price action and the close at 25907, the direction of the September E-mini Dow Jones Industrial Average on Monday is likely to be determined by trader reaction to the main 50% level at 26012.
San Francisco is home to hot IPOs like Uber, Lyft, Slack and Pinterest. Big swings in the stock market get less attention than sizeable moves with any of the cities biggest publicly traded names.
The yield curve inversion had markets tumbling amid concerns of a coming recession, but what is a "yield curve" and how (and/or why) does it invert?
Plunging Treasury bond yields spooked a lot of investors this past week, especially after the yield on the 10-year Treasury briefly fell below that of the 2-year for the first time in more than a decade. That so-called inverted yield curve has preceded each of the last seven recessions. But Scott Ladner, chief investment officer at Horizon Investments, tells Yahoo Finance that the U.S. stock market shouldn’t necessarily be taking its cue from the bond market right now. That’s because about $17 trillion of government bonds worldwide are trading at negative yields, according to Bloomberg.
Liz Ann Sonders the chief investment strategist and a senior vice president at Charles Schwab & Co. is skeptical about a comprehensive trade deal.
On Wednesday, US stock indexes fell due to recession signals. The Dow Jones Industrial Average (DIA) was the worst performer with a 3.05% fall.
Based on the early price action, the direction of the September E-mini Dow Jones Industrial Average on Thursday is likely to be determined by trader reaction to the uptrending Gann angle at 25458.
On Wednesday, former Federal Reserve Chair Janet Yellen told FOX Business she doesn’t think the U.S. economy is headed toward a recession. “I think the answer is most likely no,” Yellen said.
Early Thursday, the yield on the 30-year Treasury bond dropped to a record low in the morning of Asian trading hours, breaking the 2% level for the first time, according to Reuters.
(Bloomberg) -- Stocks around the world are falling through technical support levels closely watched by investors.The MSCI All-Country World Index closed below its 200-day moving average on Wednesday for the first time since early June. It was joined by the Dow Jones Industrial Average. A break below the support level is seen by some traders as a bearish signal for stocks.“For the Dow itself, this violation of its 200-day average comes barely a month after it was trading at a new high,” said Sundial Capital Research Inc. founder Jason Goepfert in a note. “That’s a quick turnaround for the venerable index, and of course raises the prospects that the latest push to its highs was a false breakout, with the 200-day violation indicating likely weakness ahead.”The Dow’s drop means that two of the so-called Big Four U.S. benchmarks are now below their key averages, with the Russell 2000 Index of small stocks having done so earlier this month. While the S&P 500 Index is about 6% off its record high from July, it remains above its 200-day support around the 2,796 level.“The S&P is not broken, but clearly it’s not ‘strong’ either having swung more than 1% intraday in each of the past 8 sessions,” Evercore ISI technical analyst Rich Ross wrote Wednesday. “I thought this period of outsized volatility would resolve itself higher, but my confidence in that view has waned as we test support at 2,850.”Still, Fundstrat Global Advisors LLC Director of Technical Strategy Robert Sluymer said that given the breadth of the weakness Wednesday, it wouldn’t be surprising to see a bounce back on Thursday. He’s closely watching levels including around 2,943, this week’s high, to confirm a low is completing.(Adds commentary from Fundstrat and Piper Jaffray.)To contact the reporter on this story: Joanna Ossinger in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Christopher Anstey at email@example.com, Andreea Papuc, Cormac MullenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- A key portion of the U.S. Treasury yield curve has inverted, an ominous sign for the economy and the stock market. But what investors should do about it now is a complicated question.Looking at history, after the spread between two- and 10-year Treasury yields first turned negative 10 times going back to 1956, the S&P 500 topped out anywhere from two months to two years later, according to data compiled by Bank of America strategists. Often, bailing immediately after the signal flashed meant missing out on double-digit gains.“It’s a great recession indicator. It just happens to work with a lag,” Tony Dwyer, Canaccord Genuity’s chief market strategist, said by phone. “Acting on it now is inappropriate.”For the first time since 2007, the rate on 10-year Treasury notes dipped below those of 2-year notes Wednesday, sounding alarms across global financial markets. The signal from the bond market has preceded each of the last seven recessions.Six of the last 10 times the yield curve inverted, the S&P 500 rolled over within three months. In the other four, the gauge didn’t top out until at least 11 months passed, data compiled by Bank of America show. The wide range of possibilities muddies the waters for stock investors that consider the yield curve when allocating portfolios.The S&P 500 “can take time to peak after a yield curve inversion,” strategists at the bank, including Stephen Suttmeier, wrote in a note to clients this week. But ultimately, “the equity market is on borrowed time after the yield curve inverts.”If you took the yield curve’s first inversion prior to the 2008 financial crisis as a signal to sell, you were probably glad. Yes, you missed a nearly 25% advance between Christmas 2005 and the top of the bull market 22 months later. But just five months after that, your gain had shrunk to 4%. Holding on through the whole bear market left you gutted -- down 46%.Then again, five years later you were back to even. Ten years later you were sitting with a 64% gain. It’s a different story for the initial inversion that came before the dot-com bubble burst. The spread turned negative briefly in May 1998, and the S&P 500 went on to rally almost 40% through the bull market peak. While that gain would’ve turned to a loss of 30% just 2 1/2 years later at the market bottom, you still would’ve seen double-digit negative returns five years after the first signal.Still, timing the market isn’t easy and it can be tempting to hold on, especially since the S&P 500 usually enjoys a last gasp rally after the initial yield curve inversion. Sure, the S&P 500 has fallen an average of roughly 5% in the immediate aftermath of an inverted yield curve, but the comeback has been stronger, rallying almost 17% on average in the 7 months after the initial negative reaction, according to Bank of America. In Asia, stocks were sold off on two of the last three inversions. Major equity benchmarks plunged Wednesday after key parts of both the U.S. and U.K. yield curves inverted, stoking further concerns over weak global growth. The S&P 500 fell 2.9% while the Dow Jones Industrial Average lost 800 points. U.S. 30-year Treasury yields also fell to record lows. Stocks in Japan were down by almost 2% at 10 a.m. in Tokyo on Thursday.At Crossmark Global Investments in Houston, which manages $5 billion, the team is keeping an eye on the curve, but not yet taking the signal too seriously. Victoria Fernandez, the firm’s chief market strategist, notes that the consumer is still strong, and until retail sales data or other indicators start to deteriorate, she’s not worried a recession is imminent.Still, rates on longer-dated bonds falling to record lows is concerning, and the stickiness of the latest yield curve inversion is well worth paying attention to, she said. “If we had a true inversion of the yield curve that stuck for a while -- if we saw an inversion go for a quarter and those consumer numbers start to come down as well, we see that GDP start to contract, if we see that, then maybe we add a little bit of cash.”(Updates with Asian market performance in 11th paragraph)To contact the reporters on this story: Sarah Ponczek in New York at firstname.lastname@example.org;Lu Wang in New York at email@example.comTo contact the editors responsible for this story: Jeremy Herron at firstname.lastname@example.org, Chris NagiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Allianz Chief Economic Adviser Mohamed El-Erian says he would sound the alarm if U.S. Treasury yields dip into negative territory.