(As of 7:20am, PST)
A cloud of uncertainty hovers over the markets today after
another difficult trading session yesterday that saw the major indices close
negative for the fifth straight session. The continuing themes of dropping oil
prices and global market slowdown were exacerbated yesterday when Fed
Chairwoman Yellen’s testimony to the House Finance committee failed to instill
confidence in the markets. Yellen didn’t take the dovish tone that investors
were looking for by acknowledging that the U.S. economy might suffer if the
unstable global economy continues which may result in the Fed postponing the
next interest-rate increase. What followed her testimony was a late session
selloff that has carried into today. Yellen continues her testimony today in
front of the Senate Banking Committee and unfortunately there isn’t much on the
economic calendar to distract investors. Oil has continued its tumble and is
currently trading below $28 per barrel while the 10 year Treasury yield has
dropped to its lowest level in three and a half years. This environment has
cause a flight to safe haven assets like gold and bonds which are surging.
Something to watch for is whether the S&P500 can hold up to its low of 1812
on January 20. Currently it is trading at 1836. Buckle your seat belts for
another wild ride today.
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