There was a time when a no collusion verdict from Mueller would have ripped the stock market higher.
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MON, MAR 25, 2019
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DJIA |
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+% |
+
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S&P 500 |
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+% |
+
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NASDAQ |
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+% |
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| DOW |
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NAME |
LAST |
CHG |
%CHG |
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AAPL |
188.74 |
-2.31 |
-1.21% |
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MSFT |
117.66 |
+0.61 |
+0.52% |
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JPM |
98.93 |
-0.83 |
-0.83% |
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| S&P 500 |
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NAME |
LAST |
CHG |
%CHG |
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AMD |
25.97 |
-0.40 |
-1.52% |
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BAC |
26.84 |
-0.17 |
-0.63% |
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GE |
9.88 |
-0.10 |
-1.00% |
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LAST |
CHG |
%CHG |
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AMD |
25.97 |
-0.40 |
-1.52% |
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AAPL |
188.74 |
-2.31 |
-1.21% |
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SIRI |
5.75 |
-0.01 |
-0.17% |
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Why didn't the stock market rip higher after the Mueller report showed President Trump did not collude with Russia? The main reason is because the investigation had dragged on for so long, it kind of fell off Wall Street's radar. Investors we spoke with felt that if Mueller was going to surface something really damning, they would have known it by now.
Instead, fears of a global economic slowdown have taken over. Check out this chart of different benchmark bond yields from around the world:
A gravitational pull is happening here. German and Japan benchmark bond yields are back in negative territory, and the 10-year yield is being dragged lower by that same force. The global bond market is telling us something is wrong. The U.S. bond market specifically, with its inversion of the 3-month and 10-year yields, is also telling us something is not right. It's all reminiscent of behavior during the Great Recession, except this time global central banks have used most of their bullets. If there really is a global economic slowdown again, investors may need to navigate it without the help of the Federal Reserve. In fact, the more the central bank says it will help (like last week), the more it may hurt confidence. Morgan Stanley told clients today to stick with staples and utilities, which should benefit from lower rates and have a track record of steady cash flow during tough economic times.
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