Lucky Number 7 For the Dow Tomorrow?
The Dow Jones Industrial Average (^DJI) could close down for the 6th day in a row, if it in fact closes negative on the day. We are currently on the ropes. This would be the longest down streak since March 2017 when the Dow closed down 8 days straight. Does this mean a lot? Not on its own. March 2017 was not the beginning of a bear market. However, it is enough to make traders more nervous about equities generally and could trigger a waterfall decline any day if it is not soon reversed.
When the Bond Vigilantes Come, Yield
Interest rates were up again across the yield curve, with the 10-year (^TNX) holding above 3% for the first time since 2014. This is mostly just a psychological number that headlines like to point out (see here) but what may be a bit more important is that rates on the 1-year and 2-year are not far behind. 2-year notes are already at 2.5%, and the 1-year is at 2.25%. Short term yields at higher rates means, among other things, that large purchases, like housing, become cheaper as the costs of borrowing to purchase those things rise. Think real estate and large capital, which stocks represent.
Gold About to Turn Around?
Gold has been down 2.3% over the last month, but the NYSE ARCA Gold Bugs Index (^HUI) is up 1.6% over the same timeframe. Historically, when gold stocks outperform gold, it has signaled at least short term rallies in the metals. Today again, the index has outperformed the metal so far, with gold down 0.8% but the HUI Gold Bugs Index down only half as much at 0.4%. A rising gold price would be consistent with the steadily rising inflation statistics Wall Street has been seeing since last year.
So Much For Venezuela Easing the Oil Price
When things aren’t going your way, the best thing to do is arrest people out of frustration. Chevron (NYSE:CVX) has evacuated its executives from the hyperinflation and price-control-ravaged Venezuela after two of its top executives in the country were arrested over a contract dispute with the state-run oil firm that can’t seem to produce any oil anymore anyway. Chevron has asked its employees not to show up at work until further notice for fear that they will be arrested by the Venezuelan authorities, who are quickly running out of resources themselves. It looks like Venezuela will not be benefiting too much from a rising oil price.
Facebook Earnings Have Everyone On the Edge of Their Timelines
Status update! Facebook (NASDAQ:FB) is about to release its Q1 earnings at market close, and everyone is waiting with baited breath. With the firm under attack for privacy issues and Congress threatening to regulate it for breach of privacy, which Congress itself breaches on a daily basis itself anyway, a sagging earnings report could end up clobbering the stock further. The big question is, if there is an earnings beat and the stock still falters as Caterpillar (NYSE:CAT) did yesterady, what does that say about broader market conditions? Stay tuned.