Mike’s Morning Brief – February 21, 2018

Mike Frazier portrait headshot

What’s going on in the world…

Market opens in the green after yesterday’s selloff brought an end to the 6-day rally with an oversold bounce. Global Markets were mixed overnight, with Asia in the green and Europe in the red. We expect this choppy price action to continue with a re-test of the lows very likely. To form a bottom, the lows will need to be tested to prove its merit. It’s a process, and one that we believe will last into Spring. Corrections are not fun, but they’re healthy. Earnings Season is coming to an end, but the numbers are proving very solid. The focus now is on the Fed and its plans with interest rates and inflation. The Market is still recalibrating these issues. The Fed minutes will be released today, which will bring some insight into how they plan monetary policy under new Chair Jerome Powell. Transitions can be bumpy. Volatility was absent last year. It showed up in 2018 big time and looks like it wants to stay for a while. Interest rates are lower in early trading with the 10-Year Treasury yield backing off 2.9%. The 2-Year Treasury yield cleared 2.25% this morning for the first time since 2008. The yield curve is staying flat. Crude is churning in the low $60’s. Gold is catching a bid higher. Keep those belts buckled.

Have a great morning,

Mike Frazier

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