PNC Capital Markets has announced their acquisition of Ambassador Financial Group, subject to closing conditions. This web site is scheduled to transition to PNC on April 12th.


01-28-19 Market Commentary

U.S. equities are under pressure this morning with the Dow Jones Industrial Average off 300 points.  Aside from today’s performance, equities are off to a favorable start in 2019. The trade-war tensions seem to be easing and the market mostly ignored the government shutdown, which is now temporarily reopened.  The Dow Jones Industrial Average, NASDAQ and S&P 500 have all risen more than 12% over the past five weeks.

With recent dovish commentary by the Fed, the futures market isn’t pricing in a Fed Funds hike probability greater than 29% at any of the 8 meetings this year. This is certainly helping to stabilize the market, but will it last? After spending 6 months in 2018 in the 4% to 5% range, Atlanta Fed GDPNow has come crashing back down. Since the start of November, the index hasn’t been able to push above 3% and it currently sits at 2.722%. The economic surprise index remains negative at -0.173 with four of the six sectors in negative territory.

The 10-yr Treasury is currently 2.740% and the long bond is 3.048%. Investors have been looking to put excess liquidity to work over the past couple weeks as the 10-yr Treasury yield is up 20 bps in January. There continue to be portfolio rebalancing opportunities for clients. Many of these involve increasing interest income to help fight margin compression from higher funding costs. Given we are only months away from being in the longest expansion in the history of the United States, we are also focusing on strategies that mitigate credit risk in case a recession is on the horizon.