The last day of spring was a red one with markets all over the planet down about 2.5% on the day with no safe place to hide. Gold was off more than $80.00 and bonds, the safe place that all are supposed to go fell in price as yields rose. If you were going to suggest that none of that made any sense, you would be correct. Every asset class yesterday fell in value (except cash) which in most cases would suggest a capitulation as traders try run away. Not surprisingly, this is when investors remain in the game, rotate sectors in an orderly manner and add to oversold positions (in this case essential services).
Overnight in Asia, bargain hunters came back to the table driving Japan higher by more than 1.5%. China and Australia both were off about a half a point on real economic news as China injected some cash into the banking system.
Europe is trading slightly higher as markets there have turned in the last hour on new real news other than day traders are taking profit at midday and waiting for direction as North American markets open.
Futures in the US are higher by about a half a point as are TSX 60 futures. Investors and traders are looking for some bargains this morning after the sell off yesterday.
Gold is up 6 bucks to 1292, oil is flat at 95.07 and the loonie is off half a cent to 95.63.
The Friday bond report reiterates what I have been commenting on all week, so the news is not new. With that said, in the US, 2yr yields were up to 0.327% vs. 0.278% last Friday, 10yr – 2.406% vs. 2.138% and 30yr – 3.48% vs. 3.32%. In Canada, 2yr – 1.179% vs. 1.112%, 10yr – 2.239% vs. 2.124% and 30yr – 2.804% vs. 2.689%. Again, while yields have increased I believe all will agree that giving the US or Canadian Government money for 30 years at 2.8% or 3.32% would be financially prudent.
The speed at which markets are moving continues to suggest organized methodical changes to portfolios which I continue to practice.
|Kenneth A. Dick, BA, CIM, CFP, FCSI
Branch Manager & Portfolio Manager | Independent Wealth Management
Canaccord Genuity Wealth Management