1 February 2018: Rate hikes

Yesterday was the last meeting of the Federal Reserve under the direction of Janet Yellen. The Fed did not change interest rates, but expressed the expectation that inflation will reach the much-hoped-for level of 2% later this year. And that would justify a number of rate hikes (probably three) in the course of 2018.
Investors reacted at the end of the session yesterday: prices of stocks went slightly down. Three rate hikes in 2018 have been the overall consensus among investors and analysts for some time now. It looks like there was a group of investors who had hoped for two rate hikes or less. It is becoming more unlikely that they made the right bet. But even after three future interest rates, the costs of lending will be at a low level from a historical viewpoint.

white-chapel-logo-smallThe major US indices ended in positive territory on Wednesday, booking solid monthly gains. The Dow closed 0.28% higher, while the S&P posted a more modest gain: +0.05%. The NASDAQ closed 0.12% higher. Volatility eased from relatively high levels: the VIX closed more than 8% lower. UVXY ETFs closed with a loss of 4.16%. This was slightly higher than the opening of these ETFs. XIV ETNs closed 0.5% higher, but recorded an intraday loss of more than 2%.
Due to the lower opening of UVXY ETFs and the intraday loss of XIV ETNs, Danny Daredevil‘s RSS dropped to 13%. Danny switched from UVXY to XIV at the opening of the session. Adventurous Anny switched from cash to XIV at the same moment. Due to the intraday loss of XIV, her RSS dropped to 20%. Solid Suzy and Lazy Larry recorded a small gain, since they kept holding XIV ETNs. Their RSS rose to 88%.
None of our models gave a trading signal at the end of yesterday’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil XIV 1 January 2016

12.52%

10.33%

10.33%

6%

Adventurous Anny XIV 6 March 2017

20.08%

-2.30%

-2.30%

22%

Solid Suzy XIV 6 March 2017

88.29%

-6.61%

-6.61%

101%

Lazy Larry
XIV 6 March 2017

88.29%

-6.61%

-6.61%

101%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

RS_v05-small

René visited a second-hand bookshop in his hometown yesterday. There, his attention was drawn to a book titled Atlas Obscura: An Explorer’s Guide to the World’s Hidden Wonders. According to lifehacker.com, this is ‘the book every travel nerd needs’. But for those who prefer digital content, there’s also a website. At www.atlasobscura.com, you are invited to start exploring this hidden world of wonders from your armchair: “Atlas Obscura catalogues the most unusual, surprising, and amazing places around the world, thanks to the discoveries shared by our intrepid community of travelers and explorers. There are now more than 13,000 incredible hidden wonders listed in the Atlas, and we’ve plotted each and every one of them on this interactive map.”
Where are you on this definitive map of the world’s extraordinary sights? Which hidden wonders are near you that you didn’t know about? (Or that they don’t know about, in which case you can add it to the atlas.)