Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide. Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business since 2008, sending it daily shortly after the market close.
The opinions expressed below are my own
Summer forecast? Today was quiet and bullish. It kind of feels like the equivalent of a pleasant and sunny summer day at the beach. News and activity was light (flow was 90% today) but the bulls won the session and that’s what counts. There was some back-and-forth intraday but the major averages never went negative so longs were happy the whole day.
Treasuries sold off again today… nothing to be alarmed at but Friday’s action and today’s action were repeats in that regard. Rates climb as do equities. One day of that is just noise. Two days of that is a little bit curious.
I don’t know when we have to really concern ourselves with these two markets trading in opposition but we should be watching. The 10 year is heading back towards 3% and the whole curve is rising with it. Rates always matter. They can’t keep climbing without impacting equities. When, as always, is the $64,000 question.
For the moment, there’s nothing to see here. Summer trading is in effect. Things are pleasant and we’re waiting for the Fed to hike on June 13th.
If a big worry jumps into focus before then, we’ll do the usual risk-off thing and kick off a re-energized churning cycle of US equities. Until then, the market is calming down and becoming more content with the status quo.
See you tomorrow,