11/2/2018 Weekly Update: The Week thatWas

11/2/2018 Weekly Update: The Week thatWas

by Zach Marsh on Nov 2, 2018

Weekly Recap

S&P 500                +2.40%

10 Year Treasury   -0.60%

Gold                      -0.12%

Volatility              -18.7%


Weekly Update: The Week that Was

The stock market went on another wild ride this week.  Monday, the S&P 500 touched an intraday low at just about 2600.  At that low point, the S&P had fallen over 11% for the month of October.  However, the market bounced significantly from that intraday low and, at the high today, was up over 5.8% from the Monday low.  From Tuesday through Thursday the stock market managed something it hadn’t done since September 20th, close higher for 3 consecutive days. 

Today, the market rally stalled in large part due to the unemployment numbers released by the Bureau of Labor.  After the release, interest rates began to rise on the back of higher employment and higher wage growth.  The rise in interest rates sent the stock market falling rapidly from its highs. The intraday market reversal seems to complicate the chances for a continuation of the relief rally witnessed mid-week.  Should the S&P 500 fail to stay above the 2700 level I would expect the market to attempt a retest of the Monday lows.  If this turns out to be the case, I would further expect interest rates begin to ease as dampening market expectations would begin to create a flight to safety, pushing bond prices higher and yields lower. 

The trade-off between stocks and bonds has become a bit more complicated lately, which is typical of late stage bull markets.  The fairly consistent inverse correlation between interest rates and stock prices has broken down at times this year.  During both the market sell-off in February and October interest rates were rising (bond prices falling), while stock prices were falling.  Barring the US economy slipping into stagflation ala the 1970’s and early 80’s, I don’t foresee this recent phenomenon having much sustainability.  In commodity trading they say nothing cures higher prices like higher prices.  Eventually supplies will increase to meet demand.  Likewise, either the stock market will get accustomed to higher rates and resume its march higher, or higher interest rates stifle economic growth, ultimately sending rates lower.  Either way, the challenges endured by multi-asset, diversification strategies in 2018 should, quite soon, be a thing of the past.  

Thanks for reading,

Zach and Dave

Calibrate Wealth





All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.  Tax laws are complex and subject to change. Calibrate Wealth LLC, does not provide tax or legal advice and are not “fiduciaries” (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise provided in writing by Calibrate Wealth. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account.


This material does not provide individually tailored investment advice. It has been prepared without

regard to the individual financial circumstances and objectives of persons who receive it. The strategies

and/or investments discussed in this material may not be suitable for all investors. Calibrate Wealth

recommends that investors independently evaluate particular investments and

strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a

particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Investing in commodities entails significant risks. Commodity prices may be affected by a variety of

factors at any time, including but not limited to, (i) changes in supply and demand relationships, (ii)

governmental programs and policies, (iii) national and international political and economic events, war

and terrorist events, (iv) changes in interest and exchange rates, (v) trading activities in commodities

and related contracts, (vi) pestilence, technological change and weather, and (vii) the price volatility of a commodity. In addition, the commodities markets are subject to temporary distortions or other

disruptions due to various factors, including lack of liquidity, participation of speculators and

government intervention.


Foreign currencies may have significant price movements, even within the same day, and any currency

held in an account may lose value against other currencies. Foreign currency exchanges depend on the

relative values of two different currencies and are therefore subject to the risk of fluctuations caused by

a variety of economic and political factors in each of the two relevant countries, as well as global

pressures. These risks include national debt levels, trade deficits and balance of payments, domestic and

foreign interest rates and inflation, global, regional or national political and economic events, monetary

policies of governments and possible government intervention in the currency markets, or other