Yields and the Dollar Inching Higher


Stocks slipped today after Janet Yellen said a rate increase at the central bank’s December meeting was a “live possibility.” Bond prices also fell and the dollar gained ground against other currencies following her comments.

Will there be coal in the market’s stocking come December? A hot jobs number later in the week may lock that possibility in, if we get a cold number, than we will probably buy some more time on a rate increase.

Energy stocks sold off today as crude dropped following data showing higher U.S. oil inventories and an uptick in production. The S&P 500 energy index lost 1%. Also the dollar was strong.

Our market lately has a strong tendency to trade with crude, and as crude got weak today so did the market, so crude oil is very important to watch over the next few days.

Its time to be careful here. This whole rally has been predicated on the belief that rates would get raised until next year, if the thinking changes on that we could give it back just as fast.

The yield on the 10-year Treasury note turned higher as investors priced in the possibility of higher short-term rates. The yield rose to 2.232%, its highest level in almost two months, as prices fell.

The jobs number Friday is the event of the week.

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