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 In The Lonely Bull

The money flow metrics that the Bull follows have recently strengthened. This indicates good demand for stocks and is mirrored in the day-to-day action of the stock market. It has been obvious for a few weeks now that when the background news improves, investors are quick to pick up companies’ stocks at what they believe are bargain prices. It has been volatile, but on an improving trend. Expect more of this!

Recently, investor attention has focused on the yield curve spread. That is the difference in the yield between short-term treasuries and longer-dated maturities. This week, the 2-year yield was the same as the 10-year’s. When the 2-year rate is above the 10-year, some investors believe this as a sign of a coming recession. The predictive track record of this is not that strong. Much more predictive is when the 3-month yield is higher than the 10-year. This spread is not close to an alarming level.

In short, all investors are trying to find their way through this difficult and confusing environment. So far, the Bull and his partners have not seen anything that changes our mostly positive outlook. However, we are also watching all the vital signs of this economy and business environment. We will make any additional adjustments as necessary. Stay steady my friends.

The Lonely Bull

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