Precious Metals Scrapped; Bonds Sold; Stocks Flat

Prospects for a breakthrough and potential finality to phase one of the US-China trade negotiations did little to move markets Tuesday. By midday, most of the hope and all of the hype had been wrung out of headlines, stocks staged a half-hearted rally, and slumped into the close.

The days activity in stocks was best described as sluggish, or possibly uneventful. The Dow Jones industrials were in the green all day but never higher by more than 100 points. Other indices were equally quiet. A mixed bag of earnings reports for the third quarter from mostly mid-cap companies did little to inspire confidence on the heels of fresh record closes on Monday.

Bonds were generally sold, with yield on the benchmark 10-year note rising six basis points, to 1.86%, the highest they've been since September 13. In stark contrast to the the Fed's recent rate cut, the long end was whipped, with yield on the 30-year bond reaching 2.34%. The short-dated end of the curve was well-behaved, with everything from one-month to two years yielding in a range from 1.56 to 1.63, extremely flat.

As yields were rising on less risky fixed income, precious metals were hammered lower, with silver dripped under $18/ounce to end New York trading at $17.58. Gold, too, was kicked to the curb, falling from $1505 to 1483 by the end of the day.

The entire day seemed to be one of selling just about anything that may have had value. That sentiment stood in sharp distinction to the ongoing narrative. It's likely that markets overall had been overbought and due for a letdown. The potential for continued upside still exists, though mixed messages are coming through the data.

Still, with holidays just a few weeks ahead and money conditions so easy, the possibility of a breakout rally prior to and/or inclusive of Black Friday is very strong. There remains a convincing argument for the ownership of stocks over all other asset classes and there is significant force - and money - behind that argument.

At the Close, Tuesday, November 6, 2019:
Dow Jones Industrial Average: 27,492.63, +30.53 (+0.11%)
NASDAQ: 8,434.68, +1.48 (+0.02%)
S&P 500: 3,074.62, -3.65 (-0.12%)
NYSE Composite: 13,339.59, -15.81 (-0.12%)