The Dow continues to hold steady falling 14 points on light volume to close at 25,614. It’s all quiet on the western front…..for now.
We received the latest market update from Dan the man over at BTS in Lexington, Mass. I love these updates since they are short, accurate and informative. What made this report interesting is that it showed a consistent underlying strength in US corporate high yield junk bonds despite volatility in US equity markets. This decoupling of volatility between these two asset classes could be a bullish indicator. High yield paper in the US is correlated to equity markets but more importantly high yield bonds tend to move early and can signal transitions before they are seen in equity markets. A calm junk bond market is a good sign.
Prices of WTI crude oil fell today after the release of two reports which indicated potential slack in oil demand. One report showed that US oil stockpiles were higher than expected after a stockpile drawdown was much less than expected. The other report showed that independent refinery’s in China imported a relatively low amount of oil imports which could signal a potential slowdown in the Chinese economy as trade issues coupled with internal debt problems could impact global oil demand going forward. WTI crude today traded at $66.92 down 3.24%.
Shares of Disney pulled back slightly after the company reported a 7% increase in revenue and an 18% rise in net profits. Both top and bottom line numbers missed the guru estimates. Disney said good results from theme parks and studios (Black Panther, Incredibles 2) were offset by poor results in media and the sale of consumer products like bobble head dolls. One item of note is that China just told Disney they could not screen the upcoming Christopher Robin movie in China because of a perceived similarity between Winnie the Pooh and President Xi Jinping which the Chinese gubment did not like. This seems hard to believe but Seeking Alpha actually had a note about it. I wonder what would have happened if President Xi resembled Kylo Ren?!