Here In The US....

The "Trump Trade" keeps on rolling, or is this portion of the current rally more of a "Fed Trade?" Regardless of what was behind the action on Thursday, it was not quite as convincing as had been the first two days of said rally. There was decent demand for US Treasury debt securities for a nice change, which did shake a few trees on the equity side.

The yield of the US Ten Year Note dropped ten basis points for the regular session, going out at 4.33%, while the US Two Year Note paid 4.20% (down 7 bps) by day's end. As the zero-dark hours roll by, those two yields are down to 4.30% and 4.18% respectively. The spread between the yields of the US Ten Year Note and US Three Year Note backed away from normalizing on Thursday, dropping from -11 bps to -19 bps. Early Friday morning, I now see that spread at -23 bps as on Thursday we learned that Q3 Non-Farm Productivity had underperformed expectations and Q3 Unit Labor Costs had significantly exceeded what had been projected.

For the day on thursday, the rally that we investors had enjoyed this week narrowed sharply. The S&P 500 gained 0.7% as the Nasdaq Composite popped for another 1.51%. That's all well and good, but around the mid-majors, the rally faded. While the Philly Semiconductors still gained 2.27% led by Intel (NTC) and Marvell Technology (MRVL), the Dow Industrials closed very close to unchanged as the banks were hit with a bout of profit taking. The KBW Bank Index gave back 2.68% for the session. Additionally, the Dow Transports closed down 1.44% as the rails, trickers and airlines all tumbled. All of your favorite small to mid-cap indices closed in the red as well.

I am long INTC.