Thoughts {06.15.17}
The Federal Reserve raised interest rates a quarter of a point yesterday. Markets digested that pretty well until Federal Reserve Chair Janet Yellan began providing guidance on how they would unwind the bonds off of their balance sheet that they've been purchasing since the beginning of the Great Recession. Markets sold off after than and that swoon looks like it's carrying over into today as all futures are in the red.
Of course yesterday's shooting of a Congressman and a few others at a baseball practice for an upcoming charity game didn't help yesterday's trading. Neither will having all of East Coast press running with the story that President Trump is being investigated for possible obstruction of justice in the Russia probe likely help the markets today.
Stocks are expensive and have been on a great run. Nobody can deny that. It's been months since we've seen any serious profit taking in the markets so it wouldn't come as much of a shock if we stalled out here. Summer's just kicked off and once we get to the 4th of July trading will take somewhat of a backseat for the Wall Street crowd.
In case you were wondering about pullbacks in stocks, I generally measure these slumps from highest trades to lows in markets before they pivoted higher. Most of the time when you see these numbers, writers use either market opens or market closes. I like highs and lows because these are numbers that somebody actually bought or sold and so they seem to me to reflect more on the actual trading nature of the markets. You have to go back to last fall to find a period where we saw even a 5% correction in case you wanted to know when the last pullback was. Prior to that you had to go back to last summer and the "Brexit" scare. You have to go back to late fall 2015/early winter 2016 to find a pullback worse than 10%. Beyond that you have to go back to 2011 to find a pullback beyond the 15% range. That's a long time ago and also lot of points ago in terms of performance.
That's also a long time for investors to have forgotten what real volatility and real market draw downs feel like.
Back Monday.
Of course yesterday's shooting of a Congressman and a few others at a baseball practice for an upcoming charity game didn't help yesterday's trading. Neither will having all of East Coast press running with the story that President Trump is being investigated for possible obstruction of justice in the Russia probe likely help the markets today.
Stocks are expensive and have been on a great run. Nobody can deny that. It's been months since we've seen any serious profit taking in the markets so it wouldn't come as much of a shock if we stalled out here. Summer's just kicked off and once we get to the 4th of July trading will take somewhat of a backseat for the Wall Street crowd.
In case you were wondering about pullbacks in stocks, I generally measure these slumps from highest trades to lows in markets before they pivoted higher. Most of the time when you see these numbers, writers use either market opens or market closes. I like highs and lows because these are numbers that somebody actually bought or sold and so they seem to me to reflect more on the actual trading nature of the markets. You have to go back to last fall to find a period where we saw even a 5% correction in case you wanted to know when the last pullback was. Prior to that you had to go back to last summer and the "Brexit" scare. You have to go back to late fall 2015/early winter 2016 to find a pullback worse than 10%. Beyond that you have to go back to 2011 to find a pullback beyond the 15% range. That's a long time ago and also lot of points ago in terms of performance.
That's also a long time for investors to have forgotten what real volatility and real market draw downs feel like.
Back Monday.
posted by CR English at 7:53 AM
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