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Market Update: September 6, 2019

Pipe

‘Sell in May and go away.’ We can officially add that one to the list of old trading clichés that don’t work in today’s financial marketplace. Summer used to be a quiet time in the markets…most of the financial service pros would leave their NY offices and head to a vacation home somewhere with limited telephone access. Today’s hyper connected and 24-hour news cycle world have turned summer into one of the more volatile points on the calendar for investors. Case in point:

Early on August 1,2019, the tweet above, along with others, surprised the global equity markets. China fired back with tariffs of their own and by the end of the month, the public back and forth had shaved more than 2.0% off various developed world markets. The charts below from J.P. Morgan show August market performance.

August’s market news was also full of interest rate watching and FED interpreting. The FED lowered rates by 25 basis points in July and another cut is expected in September. FED Chair, Jerome Powell’s Jackson Hole comments in mid-August were largely positive, but he did stress that, ‘the global growth outlook has been deteriorating since the middle of last year.’ This comment seemed to bolster the chances of a September rate cut to market watchers and FED hawks. According to the CME FedWatch tool, the chance of a September rate cut currently sits at 95% (up from 74% on July 31.) The chart below is a current snapshot of the CME FedWatch:

The 10-year Treasury has been on a historic run the past month, and not in a good way. The 10-year is now perilously close to its 2016 all-time low of 1.32%. Currently, the bond yield sits at 1.38%, having given up more that a half a point in August alone. The drop in yield has inverted the yield curve, meaning that an investor would be paid more to hold a shorter-term bond than a longer one. Typically, yield curve inversion is a strong recessionary indicator, but our economy continues to grow (Q2 was up 2%) which adds to the confusion and conversation surrounding the 10-year’s current performance. The chart below from the Federal Reserve shows past performance of the 10-Year Treasury.

School is back in session! While we are sad to see summer go, we are excited for all the kids…big and small…connected to HighTower Great Lakes to begin their school year. Here’s to a great year with lots of growth and wonderful discoveries!


HighTower Great Lakes is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.
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HighTower Great Lakes is registered with HighTower Securities, LLC, member FINRA and SIPC, and with HighTower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through HighTower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.

All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and HighTower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.

This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of HighTower Advisors, LLC, or any of its affiliates.