Hope you are all doing well. It was another week of choppy trading, the major U.S. stock indexes recovered from a sharp decline on Monday to finish positive overall for the week. With gains of around 1%, the Dow and the S&P 500 outpaced the NASDAQ; large caps outpaced their small-cap peers and the value equity style outperformed. This weekend is Comic Con in NewYork City, so I have broken down this week’s news using quotes from Batman villains.
Oil prices and bond yields are moving higher at a crazy pace. U.S. crude oil prices climbed for the seventh week in a row, briefly eclipsing $80 per barrel in intraday trading on Friday for the first time since late 2014. Oil’s rise has come amid a broader rally in commodities including natural gas and coal, whose prices have been driven up by recent supply concerns, particularly in Europe and Asia. It is particularly crazy when you consider the price was negative just 15 month ago. Meanwhile, bonds continue to get pounded. Prices of U.S. government bonds fell again, as yields continue to surge. The 10-year U.S. Treasury bond yield closed above 1.60% on Friday. That’s the highest yield in more than four months, and it marks a sharp increase from mid-September, when the yield slipped below 1.30%.
A potential financial crisis was averted at least for now. A congressional agreement was reached on Thursday to lift the U.S. debt ceiling. The agreement avoids a potential default on the government’s debt obligations. The deal was merely a short-term one, so another debt deadline looms in early December. The deal followed weeks of partisan fighting and came less than two weeks before the government faced the likelihood of being unable to pay its bills for the first time ever.
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