Thursday, October 6, 2016 2:11 PM EDT
Stocks remain in full-on waffle mode as traders attempt to deal with a multitude of issues and crosswinds in the market. Even on the good days, there seems to be something to fret about.
For example, the focus of yesterday’s trade was clearly the data and interest rates. With the ISM coming in stronger than expected and with the biggest monthly increase on record, the yield on the 10-year continued to rise. The data also triggered chatter about the potential for a surprise rate hike by the Fed at their November meeting.
In reality, the chances of Janet Yellen’s “non-political” gang of central bankers taking action so close to the Presidential election are slim. But when coupled with the recent Fedspeak, the data would seem to suggest that a December move is in the cards.
And then when you add in the whispers/rumors from across the pond that the ECB is starting to talk taper, the move up in bond yields shouldn’t be surprising.
This morning, Deutsche Bank, whose shares are up about 25% from Friday’s low, is back in the news – and not in a good way. Apparently the bank’s legal woes aren’t limited to the U.S. Justice Department as there is word of an indictment for colluding with Banca Monte dei Paschi di Siena SpA to conceal the Italian lender’s losses.
And so it goes. There always seems to be something to worry about and tomorrow’s Jobs report is no exception as the current thinking is that if the report comes in hot again, the Fed will have little choice but to hike rates outside of the expected time table, which the market would not be prepared for at this time.
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The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report is for informational purposes only. No part of the material presented in this report is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program.
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