Monday, September 12, 2016

Volatility, Interest Rates, and Ballyhoosh

On Friday the S&P registered a -2.45% drop that seemed to have come out of nowhere.  Considering how calm the week started it seems traders, high frequency computers, and investors decided to go off one's trolley out of nowhere. I did highlight this time of year is prone to large swings.

Friday's move gave the S&P 500 it's largest decline since Brexit's collywobbles*. Today's advance has seemed to calm nerves for the most part.

Also of note is since the beginning of the year Utilities(XLU) have been
outperforming Financials(XLF). Much of that was the desire of investors seeking safe havens to park funds. But that trend has been reversing lately.  Looking closely you'll see since July the two ETF's have started to head in separate directions. I think this highlights investor and trader sentiment on interest rates.

Of course I've been stating for awhile the Fed needs to raise rates. The market still seems to agree.

*To my British readers I hope I used those two phrases correctly! To everyone else If you're wondering what "Ballyhoosh" is you'll have to ask me. 

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