Stocks rebounded after yesterday’s material pullback. Concerns exist in that we’re seeing institutional investors as net sellers of equities, offset by continued buying by retail investors, along with hedge funds, and that margin debt levels are very high. Households are holding record levels of equities.
There still remains over $2 trillion in money market funds to fuel the market when the expected growth arrives, and the geopolitical risks ease. It remains a K-shaped economy where equity and housing prices remain high while credit card and student loan delinquency ratios have risen to uncomfortable levels.
On the economic front, weekly employment improved, and the y-o-y Redbook data on same-store sales fell slightly to 6.7%. The Conference Board’s came in at the highest since October. Concerns about employment and consumer spending being impacted by AI remain a potential more than a reality.
Interest rates are relatively stable, with the US 2-year up 2bps and the 10-year flat. Global interest rates are generally flat. The US dollar index is up slightly to 97.7, up 0.5% for the week and +0.9% the month.
is down on the day, dipping to $5,111 then recovering to $5,166 from yesterday’s $5,247 close. is up to $88/oz, copper is creeping back up to $6/oz. is flat, still above $66/bbl, and gasoline are down slightly. Energy stocks are down today, but still the leading sector YTD (+23.3%). Crypto’s woes continue, with Bitcoin almost hitting $60K overnight, but bouncing back to $64K this morning.
Tonight, Trump delivers his State of the Union address. Tomorrow, we get earnings after the close. These should both bring insights to the geopolitical and AI situation.
iShares 20+ Year Treasury Bond ETF – Investing.com
