After trading both sides of the fence the Dow closed the day up 73 at 26,909 on heavy trading volume. The NASDAQ posted a small loss as tech stocks continue to struggle while banks, energy and material stocks bounce off lows. IBD still has markets in rally mode.
Interest rates appear to have hit a low as of September 3rd and are now starting to rebound. In late August and early September, the yields on US treasury bonds hit record lows as the 30-year yield went below 2% and yields on the 10-year treasury went below 1.5%. Since that time however they have begun to rebound and now the 30 year is 2.16% and the 10 year is back to 1.62%. Money is also moving out of utility stocks which, after hitting highs are seeing a general retreat. The initial move into defensive assets like treasuries and utilities was caused by fears of a global recession but recently those fears seem to have diminished and with it we are seeing a bit of an uptick in the risk appetite. Gold also continued to pull back dropping another couple of bucks to $1,504 an ounce. Oil prices pulled back to $57.50 after trading above $58.
Apple is holding a “Special Apple Event” at the Steve Jobs Theater at the company HQ in Cupertino, CA. At this event Apple will unveil the latest iPhone 11 version, Apple Watch, iPad and Apple TV. While these new releases are expected to be incrementally better some are grumbling about the price. Also, the new phones will not be 5G ready and it is expected that iPhone 5G phones will not be rolled out until next year.
Things in Europe continue to get very interesting. The battle over Brexit is in full swing and many in Europe are now seeing the Brexit issue as the very demise of the entire European Union itself should the Brits leave. The UK currently pumps about $15 billion into Brussels each year and should they do the “Boris Bolt” it will leave a massive hole in the EU budget. One German politician noted that Britain contributes more money to the EU than 18 of its smallest members combined and Brexit will place an unbearable financial burden on the remaining members and perhaps start a domino effect as they try to avoid any added costs to their taxpayers. The stakes in Europe are high right now. Stay tuned!