Click here for the Weekly Wrap by Briefing.com.
BOTTOM LINE: Overall, last week's market performance was mixed. The advance/decline rose slightly, sector performance was mixed and volume was about average on the week. Measures of investor anxiety were mixed. The AAII % Bulls rose again, but is still only around average levels. Mortgage rates continued to drop and are now only 41 basis points away from all-time lows set in June 2003. Long-term treasury yields fell significantly as multiple measures of inflation fell, concerns over global growth rose, the US dollar rallied and the Fed's Fisher made dovish comments. Fisher said that "there's room to tighten a little bit further" and that "we're in the eighth inning of the rate cycle.” I am now more confident in my prediction of a few weeks ago that the Fed would raise 25 basis points at the June meeting and remove the word "measured" from the policy statement, thus paving the way for a "pause" in their rate of hikes. Commodity prices rose sharply as investors began to anticipate an end to the Fed rate hikes and strengthening demand. Energy was especially strong even as inventories climbed further. Oil supplies last week were 11.4% higher than a year ago at this time. Crude inventories were 26 million barrels, or 8.4% above the five-year average. Stockpiles have now risen in 14 of the last 16 weeks. API implied US crude demand last week was down 2.68% from a year earlier. I believe the recent commodity rally will be short-lived as global growth falls more than is generally expected, supplies increase and the US dollar rises further.
No comments:
Post a Comment