This week’s trade has been headlined by the yield-curve inversion theory, where the yield of shorter-dated debt rises above its longer-term counterpart.
On Wednesday, the yield 10-yr T-Note rate briefly fell below the 2-year T-Note a condition that has sometimes been a recession indicator.
The degree to which investors have crowded into the perceived safety of government debt has driven yields across the globe into ultra-low and negative levels, a dynamic that has also helped to keep US government bond yields pinned lower.
Some $15-T in government debt now carries a yield of less than 0%, another unusual condition in markets that has helped to drive investors into risky assets including stocks for lack of better-yielding assets.
The average dividend yield on S&P 500 index stocks is around 2.0% currently.
Despite the rally in stocks Friday, demand for US Treasuries held firm amid lingering growth concerns. The 2-yr yield declined 2 bpts to 1.47%, and the 10-yr yield increased 1 bpt to 1.54%.
.DXY finished flat to unchanged at 98.18. WTI Crude Oil increased 0.5% to $54.89 bbl and US gold futures finished -0.1% to $1508.60 oz.
There really is no answer as to the Why of this as the US economy is solid, and there is no recession in sight, Key: Tune out the Noise.
Friday, the major US stock market indexes finished at:DJIA +306.62 at 25885.99, NAS Comp +129.38 at 7896.01, S&P 500 +41.08 at 2888.68
Volume: Trade on the NYSE came in at 861-M/shares exchanged
- NAS Comp +19.0% YTD
- S&P 500 +15.2% YTD
- DJIA +11.0% YTD
- Russell 2000 +10.8% YTD
HeffX-LTN’s overall technical outlook for the major US stock market indexes for the week ended 16 August 2019 is Neutral – Bullish
Have a terrific weekend