The Zigmont Report (Daily Market Recap for 9/11/18

Mike Zigmont

Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $12B 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 and do not necessarily represent those of Harvest Volatility Management, LLC.

The overdue bounce.  Yesterday’s rally was small.  Today’s rally was modest.  The damage of last week is mostly repaired now as we’re back at last Tuesday’s levels.  The news today was minor again and the flow was a bit light (95%).  If there was one news item that dominated the financial press, it was Florence’s approach of the Carolinas.  Estimated insured losses are $6-$11 billion.  The market isn’t concerned a bit.  The insurance industry was flat on the day and is down 0.8% since last Tuesday.

I’m no storm expert so I don’t have the foggiest whether that’s sensible or not.  Historically, hurricane’s haven’t mattered to the broader market so this all seems like business as usual.

And the usual business today was dull.  The yield curve bearishly steepened today and the probability of a 4th Fed hike in December climbed to 78% from about 70% yesterday.

The market is voting that it expects the Fed to accelerate the normalization plan.

Until we hear from the Fed, this is all just laying out the market expectations.

See you tomorrow,