Stock Volatility at its Finest

Stocks are significantly higher in early market trading this morning, as they attempt to recoup the heavy losses they absorbed yesterday. The 600+ point loss the DOW took yesterday was supposedly fueled by fears of a soon to be democratic House pursuing further investigations into President Trump’s ties to Russia and whether there was collusion. The losses pushed stocks back beneath their day moving average, which could not serve as a ceiling of resistance as stocks attempt to climb higher. This could provide an opportunity for the bond market, assuming stock are not able to break above this critical level. It could mean that more losses are in store for the stock market.

The good news of the day is surrounding hope that the trade disputes between the US and China will soon be minimized, on reports that China’s Vice Premier Liu He will ensure a meeting between the leaders of the two biggest economies in the world. Given that trade war concerns have been the cause of massive swings in the US stock market, it seems that a resolution between the two major economies would help provide some stability for stock prices. In the meantime, we will continue to deal with the swings in hopes of an agreement to be made soon.

With mortgage interest rates still grinding against the ceiling of multi-year highs, there is great risk in floating. As a result, we will maintain a locking bias.