Major Indices Fall, But Pare Losses

Market Recap for Wednesday, January 10, 2018

We saw losses across our major indices on Wednesday, but the bulls spent most of the day recovering from steeper losses just after the opening bell.  Losses were inconsequential as they ranged from 0.02% on the aggressive Russell 2000 (small caps) to a whopping (sarcasm) 0.14% on the NASDAQ.  Before the market opened on Wednesday, reports were circulating that China might slow or completely halt their purchases of U.S. treasuries and that had the double effect of (1) sending traders to the exits in the bond market, with corresponding surges in yields, and (2) equity traders turning a bit more cautious as well.  Typically, the stock market enjoys periods of selling in treasuries as the proceeds from such selling result in more inflows into stocks.  But the reason for treasury selling does matter.  Many view the China reports bearish for as China is widely considered a viable buyer as the Fed offloads treasuries from its bloated balance sheet.  If the Fed sells treasuries and China isn't buying, there's more risk that yields could spike very quickly and that could be bad for credit availability and Corporate America's bottom line.  Those early concerns appeared to fade as the day progressed. < p class"entry-more-link">Continue reading "Major Indices Fall, But Pare Losses" »

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