• Raymond Kanyo, CFA

MarketBites: Up & Down, Up & Down

MARKET PERFORMANCE:
 

Portfolio Manager Commentary:


Treasuries rallied, stocks came back from the grave, and commodities dropped like a rock on Tuesday. Talks that the US government is considering easing tariffs on China, imposed by the previous administration, didn't help alleviate recession fears.


Growth stocks outperformed; mainly because interest rates have come down. At this point, the bond market is moving ahead of the Federal Reserve and predicting rate cuts within a year. Rate cuts would help stimulate the economy in the event of a recession, which the bond market is now predicting. Interestingly, the Federal Reserve continues to hold firm on raising interest rates.


While growth stocks bounced, energy companies sold off. Oil prices dropped over 8% and the energy sector closed the day down 4%. Investors are growing concerned about the demand destruction a recession can bring to the booming commodity market.


Today here are some key data points to watch for: Mortgage Application, S&P Global US Services PMI, JOLTS Job Openings, and the Federal Reserve's FOMC minutes.

Chart of the Day:


Oil price predictions are all over the place nowadays. JPMorgan is estimating a high of $280, while Citi is looking at $65. Meanwhile, Warren Buffett keeps on buying energy companies. Historically, Buffett has done pretty well with his energy bets.

Source: Bloomberg

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