Monday – November 26, 2018

Market opens sharply higher to start the new week. It has its work cut out for it to erase last week’s losses and the overall carnage since September. Global growth is slowing and equity volatility is increasing. This isn’t a good pairing for investors, as people don’t generally pay up for stock prices in this type of environment. Morgan Stanley downgraded their rating on US Stocks and upgraded Global Stocks. With so many variables at play, investors have been seeking safety of cash and the Bond Market. Helping today’s rally is the record Black Friday sales number. There are some major events ahead which will be Market moving: The G20 summit, which will include the much anticipated meeting between Presidents Trump and Xi as well as the final Fed meeting of the year, which is still expected to bring a rate hike although nothing is certain anymore and OPEC has its summit next week. Crude prices are catching a bid ahead of the OPEC meeting, but the price of Oil got completely smashed again last week, taking WTI down to $50, the lows on the year. Surging supplies in the US have been a major contributor, but the big concern is a global slowdown in demand, which is generally an important indicator that recession is not too far ahead. Tech has been hammered of late, bringing stock prices down to levels not seen in quite some time. European leaders approved a treaty outlining divorce terms with the U.K., a milestone in Britain’s bid to extract itself from the bloc that leaves Prime Minister Theresa May with a tough task selling the deal to Parliament. Global Markets were largely in the red overnight. Rumors are circulating that President Trump is angry at Treasury Secretary Steve Mnuchin, in addition to Fed Chairman Jerome Powell, blaming both for the Stock Market selloff. The Dollar is lower in early trading. 2018 has been one of the worst years in history for global asset classes.

Have a great morning,

Mike Frazier

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