Earnings Season is Here – Internals Fairly Strong
With earnings season beginning in earnest this week, the markets are now focused on two major items, earnings and the Fed. Weaker than expected earnings will give the Fed another excuse to cut rates at the end of July, not that they are really looking for more reasons to cut. With stocks at all-time highs, expectations are now very high for companies to deliver this month. Those that don’t will be severely punished. Sentiment has also become very bullish with […]
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Date: July 16, 2019
Trump 1 – Powell 0
Fed Chair Jay Powell finished his second day of testimony on Capitol Hill and his comments were unambiguous regarding a rate cut. It’s coming and it will not be a one and done. When pressed about the very strong employment landscape, he basically dismissed it and focused on everything his mandate doesn’t include, like weakness in Europe and trade tensions. I couldn’t find those listed in the Fed’s dual mandate of price stability and maximum employment. Um, ah, the economy […]
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Date: July 11, 2019
Powell on the Hot Seat
Wednesday is yet another one of those media created “all-important” days this month as Fed Chair Jay Powell begins two days of testimony before Congress in what used to be called the Humphrey-Hawkins testimony named after the two Congressmen who created the act. With stocks at or near all-time highs the only precedent for an interest rate like the market is expecting at the end of the month is July 6, 1995 when stocks were also at or near all-time […]
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Date: July 10, 2019
Don’t Go to The Hamptons – Big Move Coming
With the world seemingly focused on Friday’s employment report, I expected a lot more fireworks than we saw. After a gap lower at the opening and some modest follow through, stocks made it all the way back to even before tailing off to end the day. I have been talking about the rally not looking “complete” yet and that is starting to change. Our models remain defensive and only a break above Dow 27.000 on a daily and weekly close […]
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Date: July 8, 2019
Rally Not Complete Even Though New Highs Waning
Stocks continue the traditional holiday week drift higher. The S&P 500 has made fresh all-time highs and I expect the Dow and NASDAQ 100 to follow suit very shortly. The S&P 400 and Russell 2000 may take some time. While I continue to be a little defensive on stocks over the short-term, some of the indicators within our models that caused that in the first place have strengthened. I imagine the next week or so will be key to see […]
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Date: July 3, 2019
Trump Lays Down As Expected
The G20 meeting in Japan is now behind us. Trump met with Xi and that’s no longer an uncertainty for the markets although you would have to be a fool to believe that something positive wasn’t going to come out of that meeting. That has been the president’s m.o. since he took office. He creates a spike in negativity and tough guy persona wit heels fully dug in to appease his base. Then he emerges as some victor or great […]
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Date: June 30, 2019
HUGE Crosscurrents on Friday
Interesting day on Friday. We have end of week, month, quarter and first half of 2019. The skeptic in me says some portfolio managers could play some games to mark up their positions. I know. I know. You are SHOCKED to hear this. I mean, money wouldn’t cause people to do unscrupulous things, right? Next, we have the last day for positioning ahead of the G20 meeting in Japan where Presidents Trump and Xi will meet tonight to discuss the […]
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Date: June 28, 2019
Bears Finally Get a Tiny Win But Tweet Watch Remains in Play for the Weekend
Tuesday was the first real down day since May. By “real”, I am referring to a day where stocks open near the highs for the day and close near the lows. Given that it’s the last week of June, that speak volumes for how strong the bulls have been. Unless stocks are going to fall hard right here, which I doubt, the bulls should make at least a little stand on Wednesday morning. As I have been writing about for […]
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Date: June 26, 2019
Mixed Messages – Playing a Little Defense
Earlier last week I wrote about a very binary outcome for stocks. You can reread it here. I thought a bigger move was coming, but the direction wasn’t totally clear. While stocks broke out to the upside across the board, the move was a bit more muted than I anticipated. With so many short-term indicators locked and loaded for higher prices at the time, I will say that the bulls should be a little disappointed. Of course, they could play […]
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Date: June 24, 2019
Post Fed – A Rate Cut – SERIOUSLY?!?!
Jay Powell & Company gave the markets exactly what they wanted on Wednesday. They threaded the needle which is no easy feat. As someone who has been very critical of the Fed, I have to give them props for not upsetting the apple cart. The problem now is that markets are pricing in a 100% chance of a interest rate cut in July which doesn’t sit well with me. If stocks continue rallying, how can the Fed really give it […]
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Date: June 21, 2019
