Interest Rates, Interest Rates…
Strong corporate earnings lifted the Markets between Monday and Wednesday, suggesting the Market was going to start moving north. On Thursday and Friday, 10 year US Treasury moved up approaching 3%, the highest level since 2014 sending the Market south for 2 days.
For the week however, major US Stock Market Indexes were up approximately .5% leaving us flat so far in 2018.
2, 10 and 30 Year Rates
As of this writing, the Yield on a US 2 Year Note is 2.46%, 10 Year Note 2.96%, and the US 30 Year Bond 3.15%. This tight rate spread suggests many possibilities we’ll be watching and writing about. Worth noting, 2 years ago on April 27, 2016 the 2 Year rate was just .85%
Oil on the Move
Crude oil has climbed into the upper $60’s a barrel, the highest level in 3 years. It appears prices were lifted due to production cuts by major oil producing nations and renewed Geopolitical tensions in the Middle East. I also believe an improving Global Economy is also contributing to the rise in prices.
Paul’s Take Going Forward
This week will bring information on existing, new home sales and durable goods. On Friday, we’ll get the first of three reads on 1st Quarter Gross Domestic Product (GDP).
I‘ll be most interested to see if earnings from corporate giant’s Facebook, Alphabet and Amazon move our Markets higher. Increasing rates could temper any significant move however, the Markets will need to come to grips with higher rates, hopefully sooner than later. The Global Economy is performing much better today than a couple years ago, so rates should be reflective.
What will happen, time will tell, always does.