Missed it by that much…
The Dow Jones Industrial Average (DJIA) got within 13 points of 20,000 last Tuesday. It finished the week about 90 points below the vaunted milestone. “The Dow has gained nearly 10 percent since the end of October, more than double its 4.1 percent rise during the first nine months of the year, spurred in part by Donald J. Trump’s victory in the 2016 U.S. presidential election,” Barron’s reported.
The Federal Reserve put a hitch in the markets’ giddy-up last week.
It wasn’t the Fed’s second interest rate hike in a decade that caused markets to stumble. December’s rate hike was old news before it happened. In mid-December, Reuters reported Fed funds futures indicated there was a 97 percent probability the Fed would raise rates one-quarter percent at its December Federal Open Market Committee (FOMC) meeting. In addition, all 120 economists polled by Reuters agreed rates were headed higher.
Dad: “Fra-gee-lay” …it must be Italian!
Mom: I think that says “fragile,” honey.
Dad: Oh, yeah.
This holiday season, investors’ enthusiasm for U.S. stocks has rivaled old man Parker’s passion for his major-award leg lamp in ‘A Christmas Story.’ Last week, three major U.S. indices hit all-time highs.
Flirting with higher interest rates.
Last week, yields on 10-year Treasury bonds rose to a 17-month high of 2.44 percent, reported The Wall Street Journal, before retreating to finish the week at about 2.4 percent.
As we’ve mentioned previously, some experts suspect the bull market in bonds, which has persisted for more than 30 years, may be headed into bear territory. In part, this is because the U.S. Federal Reserve is expected to increase the fed funds rate in December. Last week, CME’s FedWatch Tool indicated there was almost a 99 percent chance the Fed would raise rates in December. Bond yields often reflect the actions of the Fed. If interest rates rise, bond prices move lower, resulting in a higher bond yields.
This time it’s the end. Really. Possibly.
It seems like experts have been forecasting the end of the bull market in bonds for years – and they have been doing so. In July 2010, bond guru Bill Gross predicted the 28-year bull market in bonds was near an end and, as interest rates moved higher, bond values would move lower. The Federal Reserve’s first round of quantitative easing had ended in March 2010, and he couldn’t know a second round, which would keep interest rates low, would begin in November 2010.
November is National Long-term Care Insurance Awareness month, so in memory of my father who had Alzheimer’s, I thought I’d dedicate an article to this important subject. What is the cost of long term care insurance? As always in any complicated transaction – the answer is always “It depends”. There are four primary determinants that I will address: Which company, What type of policy, the Owner’s personal factors and how much coverage.
Markets were remarkably sanguine following the election of Donald Trump to the presidency of the United States.
There was a moment of panic. As election results rolled in on Tuesday, Gold prices rose and Treasury yields fell, as investors sought safe havens. Dow Futures, a measure of overnight sentiment, fell by 4 percent, and Standard & Poor’s 500 futures dropped 5 percent. (When index futures trade lower before the market opens, it is an indication investors expect the actual index to trade lower when the market opens.)
Markets hate uncertainty – and that may create opportunities.
Last week, investors experienced another bout of election jitters, and the Standard & Poor’s 500 (S&P 500) Index fell for the ninth straight session.
The CBOE Volatility Index (VIX), a.k.a. the fear gauge, which measures the expected volatility of the S&P 500 during the next 30 days, was up more than 40 percent for the week. The shift in the VIX reflected investors’ concerns about stock market performance after the election. Many think the next four weeks will offer a rough ride.