Panic Attack! Uncertainty Rises as Manufacturing Surveys Signal Acceleration of Economic Slowing. Bonds Look Set to Test Low End of Yield Range.

Plus a detailed update of our calm and steady rolling Extended Stay Portfolio including a new stealth money pick.

This morning’s news is causing uncertainty with volatility in both stocks and bonds rising. Stocks are showing weakness and bond yields are falling as the manufacturing sector continues it steady decline. 

Aside from election anxiety, ongoing developments in the Middle East, and the start of a port strike in the U.S. East Coast and Gulf regions, the S&P Global PMI Manufacturing fell for the third straight month as new orders continue to contract.  The ISM’s survey fell below already low expectations for the sixth straight month.  Both employment and prices paid also fell, adding to the gloomy tone of the data.

The New York Stock Exchange Advance Decline line (NYAD), the most accurate indicator of the market’s trend, remains in what can only be described as a consolidation pattern, while remaining well within reach of another new high. 

The U.S. Ten Year Note yield (TNX) is likely headed for a test of its recent lows near 3.6%.  A move below that could well signal that the economic slowdown is about to pick up further speed.

Meanwhile, the Nasdaq 100 Index (NDX), home of the big tech companies, is back below 20,000 and likely headed for a test of its 20, and perhaps its 50-day moving averages with the 19.250-19500 band likely to become a decision point for the algos.

Extended Stay Portfolio Update

Our Extended Stay Portfolio, as it is designed to do is holding up quite nicely, mostly ignoring the market’s panic attack. In today’s issue, I will review our existing Extended Stay Portfolio positions, while adding a new stock which is bucking the current downtrend quite nicely.

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