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 shortly after the market close.
The opinions expressed below are my own
Slow gets slower. US equities traded very quietly today. Capital flow was very light today at 80%. That’s the second lowest level of the year so far. Only the half session before the July 4th holiday had a lower dollar volume. The magnitudes of today’s moves were also very tame. Today’s High/Low range places today’s session in the calmest third for the year. The news of the day was hurricane Harvey. US equities broadly have not reacted to concern about Harvey’s economic impacts. I don’t know whether that is foolish or not. The only obvious market reaction to Harvey has been concentrated in the insurance sector. The Property & Casualty group was quite affected today, losing about 1.7%.
The group has suffered lately but it doesn’t look that horrible. Who knows if the market has properly priced in the damages at this point but if the P&C group isn’t too banged up, it’s doubtful negativity will spill over to the broader market.
It appears that US equities are going to continue sleep-walking into month-end.
The one part of the market worth looking at today was precious metals. They rallied strongly today and the narrative there is that these markets are pricing in a less hawkish Fed. Maybe they are correct in that but the Treasury market wasn’t sending the same signal. Could this just be another example of different markets marching to the beats of different drums?
I prefer to wait for fixed income markets to move before I conclude anything but it’s worth paying closer attention.
See you tomorrow,