“Federal Reserve officials discussed rate hike procedures at a joint meeting, but agreed the discussion does not signal rate action is coming soon. That was one of the key data points from the minutes of the FOMC meeting, released Wednesday. The Fed discussed the right mix of tools to control rates and board members agreed a mix of tools is likely needed to normalize rates. ‘Participants generally agreed that starting to consider the options for normalization at this meeting was prudent, as it would help the committee to make decisions about approaches to policy normalization and to communicate its plans to the public well before the first steps in normalizing policy become appropriate,’ the minutes said.” Full story and video at…
No new information was presented about when they may raise rates.
DOES MARGIN DECLINE INDICATE A CORRECTION? PERHAPS. (Advisor Perspectives)
“The New York Stock Exchange publishes end-of-month data for margin debt... The astonishing surge in leverage in late 1999 peaked in March 2000, the same month that the S&P 500 hit its all-time daily high, although the highest monthly close for that year was five months later in August. A similar surge began in 2006, peaking in July 2007, three months before the market peak….the April data shows a continuation of a decline that began in March. It will be interesting to determine in the months ahead if this is a brief pause in demand or was beginning of a major trend reversal.” – Doug Short. Commentary, charts and analysis at…
As Doug points out in the piece, the margin debt peak and decline happened in 2000 and 2007 at prior peaks.
-VIX fell about 8% to 11.93 (at 4:09).That value is low and I had to go back to August of 2013 to find a lower value of VIX. (VIX was 11.84 on 5 August and the S&P 500 fell 5% afterward.) VIX is now at a point that has recently aligned with the start of corrections. A falling VIX is usually good news so I think the correction connection has more to do with simple market cycles. In other words, I don’t think a VIX at this level is a great indicator for a pullback; it is, however, a value that has preceded pullbacks in 2013 and 2014.
-The yield on the 10-year Treasury Note ROSE slightly to 2.54% at the close.
The Bond Ghouls are still worried.
The S&P 500 Index has closed within 1% of its all-time high 19-times since 1 Jan 2014. This number has changed slightly as the market made new highs. Still, the “stalling” market is disconcerting and the Index must make significant new-highs or the correction will be underway.
MY INVESTED POSITION
Motley Fool suggests that the owners of floating rigs have overbuilt and rig-rentals and revenues will fall in the future. Commentary at…