Originally published by Rivkin Securities
The Dow Jones Industrial Average climbed 1.4% on Friday as the recovery from the declines of early February continue. Although the index isn’t back at its highs, it has recovered approximately 50% of the losses it suffered in the first week of February. US bond yields have fallen to 2.87% as the rally in yields that has persisted since the beginning of this year looks to have stalled.
Oil prices have continued to climb with WTI reaching $63.55 per barrel. Fears of a glut due to increased US production are still present but the latest production data showed that production growth was virtually flat two weeks ago with last weeks data due to be released later this week. The market is also moving on the fact that inventories declined unexpectedly at a time of the year when they normally rise.
Volatility in (Bitcoin) is as high as ever. The price reached a February low of just under US$7,000 per coin three weeks ago but subsequently recovered to back above US$11,000. The last week, however, has seen a sell-off to back below US$10,000 with coindesk recording the current price as US$9,583. The bitcoin sell-off in early February showed that the cryptocurrency has some degree of positive correlation with equities and that in a crisis, that correlation might be very high. This reduces any diversification benefit that might have otherwise been achieved by owning the cryptocurrency.
Later this week, new FOMC chair Jerome Powell testifies before the House Financial Services Committee. On Thursday, preliminary US GDP for the 4th quarter of 2017 is released as well as Australian private capital expenditure data.
Data Releases:
- No Significant Data