Well, we knew this was possibly going to be a headline driven stock and bond market for a while and today was a good example. It looked like we were headed for another good day in a nice week of gains for stocks as the Dow was up a comfortable 50 points in early trading, despite a lousy consumer confidence number. But as soon as the news came that a Russian convoy was fired on and destroyed by Ukraine troops in Ukraine territory, stocks reversed course and the Dow sported a near 100 point loss. As the session wound down, stocks recovered a bit to minimize the damage, but global headlines once again provided the fuel for today’s volatility.
By the close, the Dow Jones Industrial Average was down 50 points to finish the day at 16,662. The S&P 500 was virtually unchanged to close at 1955. Gold was down $9 to trade at $1306 per ounce, while oil was up $1.44 to trade at $97.02 per barrel WTI.
What looked like a good week for stocks (well it still was pretty good), lost a little of its luster with today’s market reversal. Bond yields continued to fall as the flight to safety trade (mainly from global participants) continues, despite the paltry yields to our treasury bonds. We may be back to a previous rally cry of “there is no alternative” (Tina), if rates remain this low and savers seek return for their savings.
We get the Fed minutes next week as well and Ms. Yellen speaking at the Jackson Hole meeting. Fed news and global headlines should provide next week’s fuel for the markets. Let’s see how it all plays out.
Have a great weekend everyone.