Today is the start of the Democratic National Convention and with that, there has been an enormous amount of discussion around the recent hack of the e-mails from the Democratic party. Of course, this resulted in the announcement that Debbie Wasserman-Schultz would be resigning after the convention. The talk has been about Russian involvement in the hack. In my opinion, it doesn't matter who did the hack; it is that the damage was done. The attention is being drawn away from the convention and to the hack. It will interesting to see how all this plays out come November.
The S&P 500 or the SPDR S&P 500 (NYSEARCA:SPY) is down today about 60bps as of noon, or 12 points to 2162. I was writing for the past week that I was expecting a turn around in the market and today we have one. My expectation was for a test of about the 2120 level, and those expectations have not changed. click to enlarge) Click to enlarge
Today we will focus on the Consumer Discretionary Select Sector SPDR (NYSEARCA:XLY). It is the only SPDR up today, and it is fractional, by 7 cents to $81.66. This sector has performed extremely well post Brexit and for the most part, has led the charge higher for the overall markets. We can see from the chart that when the XLY leveled off so did the broader markets.
The currency market is flat as can be today, the British Pound, Japanese Yen and the Euro are all trading within of a few bps of being plus or minus. We will leave it at that for today.
WTI is trading down over a dollar to $43.15. My thought at the beginning of the month was that WTI was going to make a move towards $50 by month end. Clearly, I was wrong. It seems more likely that we will be fighting to stay above $40.
Ten-year yields are also relatively tame today with the rate down 2bps to 1.56%. I think things will remain that way until we get pass the BOJ and FOMC meetings this week.
As mentioned above the DNC national convention kicks off today. What I found surprising at first was that Michael Bloomberg would be supporting Hillary Clinton. Then I remember that before he was the Republican of mayor of New York City he had actually been a Democratic. He became a Republican when he ran for Mayor in 2001. Only to the switch to becoming an independent in the 2009 Mayor Race. So he tends to switch around, so surprised by this endorsement I am not. The latest Real Clear Politics Poll now has Trump in the lead over Clinton 44.1 vs. 43.9
Have a great rest of the day!
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.