Stocks were mostly higher on Wednesday morning amid more positive news from Pfizer, which reported that its coronavirus vaccine was 95% effective in the final results of its late-stage trial, and from Boeing, which received FAA approval to fly its 737 MAX jet after a 20-month review. On the housing front, the Commerce Department said that October housing starts rose 4.9% to a seasonally adjusted annual rate of 1.53 million units, up from 1.459 million in September and above the Reuters consensus forecast. The Dow rose 0.4%, the S&P rose 0.1%, and the Nasdaq was flat. Crude oil traded near $42 per barrel, while gold fell $3 to $1882 per ounce.

Today, we take another look at crude oil, perhaps the most-interesting (and possibly volatile) market right now -- this despite the stock market's rapid recovery and the precious metals collapse.

Stocks rose on Thursday, rebounding from Wednesday's selloff but also giving up some of their gains late in the session. The Commerce Department reported strong growth in 3Q GDP, which rose at a better-than-expected 33.1% annualized rate. Unemployment claims, still high by historical standards, also trended lower. First-time unemployment benefit claims fell from the prior week to 751,000, below the consensus forecast. Continuing claims totaled 7.756 million, also down from the prior week and below consensus. The Dow rose 0.52%, the S&P 1.19%, and the Nasdaq 1.64%. Crude oil fell more than 3% to $36 per barrel, while gold fell $13 to $1866 per ounce.

Bio-Rad Laboratories, headquartered in Hercules, California, develops, manufactures, and markets products and solutions for the clinical diagnostics and life sciences markets. In diagnostics (60% of sales), Bio-Rad manufactures, sells, and supports test systems and specialized quality controls for clinical laboratories. In life sciences (40% of sales), the firm develops and manufactures a range of instruments and reagents used in research, biopharmaceutical production, and food testing. The company is geographically diverse, with major markets in the United States (40% of 2019 sales), Europe (33%), and Asia (22%), with Canada and Latin America accounting for the bulk of the remaining 5%. Bio-Rad owns 37% of Sartorius AG, a laboratory and biopharmaceutical supplier.

Our proprietary Treasury Note Yield Model is signaling that bond yields, which have climbed 20 basis points in recent weeks, are still too low based on the fundamentals (though not necessarily on sentiment). Our model discounts factors such as current yields, GDP growth and long-term inflation, as well as stock prices and earnings. We smooth trends out over a five-year period, in order to avoid short-term momentum swings. Our current 10-year T-bond fair value yield is 1.75%. The normal valuation range has a floor of 0.5% and a ceiling of 3.0%. The current 10-year bond yield is around 0.74%, above the low end of the fundamental range but well below fair value. From an asset allocation standpoint, we think bonds remain fully valued compared to stocks and recommend that long-term investors modestly favor equity securities in their diversified portfolios. We typically break the fixed-income component of a portfolio into four areas: Core, such as the industry benchmark ETF AGG or Treasuries; Inflation-Indexed; Opportunistic, such as securitized debt, corporate debt, high-yield or floating bonds; and Cash. We currently favor the Core and Opportunistic segments. On duration, we recommend the intermediate-term.

There are many ways to check the breadth, or underlying strength, of major stock indices. The easiest is to look at the advance-decline line of an index in relation to price. Another way is to look at the McClellan Oscillator and the McClellan Summation Index of each index. A third path is to look at the Buying Percent Index (BPI) of each index and see what percent of issues are on point & figure buy signals.