Bellevue Perspectives

Monday Minute

  • With growing risks to economic activity, the Federal Reserve dropped the Fed Funds rate by .50% last Tuesday, prior to the scheduled mid March meeting.  The move brings the target range to 1.00% to 1.25%.   Powell stated that “the fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity.”  Finance ministers from the G7 stand ready to act in a coordinated effort to support price stability and economic growth.  The equity market wasn’t thrilled with the move.  It was a buy on the rumor sell on the news situation given the run late Friday and Monday after the hint of a cut.  This likely is not their last cut.
  • If you have been considering refinancing your home, now may be a good time to act.  With recent market activity and rush to investment grade bonds, interest rates have plummeted.  The 10 year treasury dropped below .50% for the first time ever and the average 30 year fixed-rate mortgage average has dropped as well.  Please let us know if you would like to discuss your situation and/or need a referral to trusted lender.
  • On top of the Covid-19 fears Saudi Arabia and Russia moved to significantly ramp up production after the collapse of a supply cut agreement.  Oil dropped to nearly $30 on WTI, roughly 26% from where it closed Friday.  WTI is now down nearly 50% year to date.  This is great news for the consumer but hurts global oil producers and the major indexes that contain these names.  As a result, we’re seeing a significant drop on the equity markets after a volatile week last week that ultimately ended positive.  The equity markets are now pushing up against official bear market territory, which is a loss of 20% from the highs.  Remember that a balanced portfolio is holding up much better as there has been a flight to safety in the bond market as investors push prices up and yields lower.  We will continue to look for opportunity as the oversold conditions continue, bringing portfolios back to their target allocation.

HighTower Bellevue is registered with Hightower Securities, LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities, LLC; advisory services are offered through Hightower Advisors, LLC.

This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.

All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and Hightower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.

This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of Hightower Advisors, LLC, or any of its affiliates.