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Friday, November 2, 2018

MANAGING DIRECTOR:
Scott Carrithers
 
PORTFOLIO SALES AND SERVICE:
Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty
Kevin Doyle • Lonnie Harris •  Mark Tranckino • Robert Schuyler • Tom Toburen • Josh Kiefer
 Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer • Chuck Honeywell • Gus Koppen

US Treasury Market
Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr
10/26/18 2.16 2.33 2.47 2.63 2.81 2.85 2.91 3.00 3.08 3.23 3.32
10/29/18 2.17 2.34 2.49 2.64 2.81 2.86 2.91 3.00 3.08 3.23 3.33
10/30/18 2.21 2.33 2.48 2.66 2.84 2.90 2.94 3.03 3.12 3.26 3.36
10/31/18 2.20 2.34 2.49 2.69 2.87 2.93 2.98 3.07 3.15 3.30 3.39
11/1/18 2.21 2.32 2.49 2.67 2.84 2.91 2.96 3.06 3.14 3.29 3.38
                                                                                                                                       Source: U.S. Department of the Treasury, as of 11/1/2018
 
                                          
                         
  Traders Perspective
 
October has come to a close but not before seeing some serious volatility in the stock and bond markets. The month started with the 10 year Treasury at a 3.08% and jumped to 3.23% before coming back to the 3.15% area. The Dow and S&P were more volatile with the high of 26,951 low of 24,122 and  2,939 and 2,603 respectfully.  The major question this brings to light is this a fundamental change with concerns about the US economy that could slow the Fed’s rate hike plans or is this just a repositioning caused by pre-election jitters?  Q3 GDP beat expectations at 3.50%, inflation seems to be under control and Treasury Supply continues to grow as direct bidders continue to pull back from the market.   If you listen to the members of the Fed, we are still a “few hikes away” from a “neutral rate”.   The Consumer Confidence Index (CONCCONF) in the graph below shows us the highest reading since 2000.   On the other hand, we have constant tariff talks with China to add uncertainty, a Brexit situation sans the exiting, a slowing global economy and most importantly we are in the 35th month of a hiking cycle. The second graph shows what the 10 year yields did coming off the high in consumer confidence in 2000.  Only time will tell if history repeats itself...stay tuned!
                                                                                                                                                                                           
       



                                                                                                                                                                                  Source:Bloomberg


                                                                                                                                                                                                                                                             Source:Bloomberg
 

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