U.S. equities 1/31

U.S. equities surged higher after Federal Reserve Chairman Powell made remarks about remaining patient on raising interest rates.  The Fed left interest rates unchanged and indicated that further rate hikes were on hold.  Stocks started the day higher after positive earnings results from Apple (AAPL) and Advanced Micro Devices (AMD), and accelerated higher after the cautious comments from Chairman Powell.   Low expectations and optimistic comments from CEO Tim Cook, sent shares of Apple almost 7% higher, after a downbeat earnings report.  Aerospace giant, Boeing (BA) gained 6.3% after beating estimates and a positive outlook for 2019.  On the day, the Dow Jones Industrials ($DJI) gained 1.8% to 25014, the Nasdaq Composite (COMP) rose 2.2% to 7183, and the S&P 500 (SPX) added 1.6% to 2681.

SBUX

Shares of Starbucks Corp. $SBUX are staying caffeinated after the company's strong earnings report Thursday evening. The stock reported earnings of $0.75 per share, topping the consensus forecast by $0.10 and rising 15.4%.

Gold Futures (/GC) 1/25

Gold Futures (/GC) are tracking higher near $1288 an ounce in reaction to a softer U.S. dollar despite some notable progress being made to resolve the impending Government shutdown.  Energy prices (/CL) are holding steady near $53 with investors keeping a close eye on fresh developments out of oil-rich Venezuela as two different President elects remain in a tug-of-war over power. The U.S. has already discussed potential oil sanctions which could create more short-term demand. Natural Gas (/NG) futures are trading 1.25% lower near the $3 threshold despite an Arctic cold spell that is set to cripple much of the mid-west through next week. 

Gold Futures (/GC)

Gold Futures (/GC) are slipping near the $1280 an ounce range as upbeat equities tarnish the value of the precious metal which has remained bid amid the government shutdown. Energy prices (/CL) are up slightly with crude back above $53 a barrel after suffering a 1% defeat to start out the shorted week yesterday over demand concerns. 

10-year bond yield 1/22

The nominal spread between the 10-year bond yield and short-term interest rates -- the so-called "yield-curve spread" -- has been closing since 2014 and is now at a 10-year low. Many believe this signals a U.S. economy headed for recession. But other leading indicators do not point to a sharp slowdown. For example, the nominal spread fails to take inflation into account. On this measure, the real, inflation-adjusted level of bond yields remains historically low versus five-year inflation, and the real level of short-term rates is finally above zero, but only by 40 basis points. We think that Leading Economic Indicators are better predictors than the yield curve. One-year growth for the LEIs is a very robust 5%.