The Week's Message: Near-Term Mixed

Here's the summary for our market/economic analysis for this week:

The Technicals (long-term trends)

Our long-term technical trend analysis remains notably bullish for the S&P 500. 

America Prospers From A Prosperous China

In my August 6 blog post I made mention of the following recent commentary by the President:

Over the weekend he boasted that the U.S. market is "stronger than ever" and that Chinese stocks are "down 27%". The U.S. is therefore "winning the trade war."

After updating readers on the returns of U.S. stocks vs. Chinese stocks since the 2016 election (it's a dead heat by the way), I stated the following:

Hugely Broad Tariff Risk! But imagine the upside if/when cooler heads prevail...

UBS compiled its list of companies "most at risk from President Trump's trade war." 

I entirely agree that the present trend toward protectionism puts the listed companies at serious risk. But, my, we're only talking the tip of the iceberg here! 

Market Update: Why Shorts Have Been Losers This Year (video)

In this morning's video I update you on the state of the current market correction as well as general conditions:

Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:

Chart of the Day: U.S. Government Borrowing -- and Foreign Investors Lending -- At Record Pace

Three key takeaways from the chart and highlight below:

Our Latest Log Entry: Washington's Pushing the Needle

Sharing the latest entry to our log:

8/7/18 (Tuesday)

The market continues to hold up remarkably well given the trade war threat, which I attribute 100% to favorable general conditions, as there’s absolutely nothing bullish in the prevailing rhetoric. 

My "remarkably well" comment notwithstanding, given the hugely strong setup coming into the year, the exceedingly positive Q1 earnings results, and I’ll say notably positive Q2 results, tax cuts, etc., the fact that the broad market isn’t up considerably more speaks to the ill-effects/uncertainty of protectionism.

Is Capitalism Only For the Elites?

Yesterday The Economist posed the following question to its readers:

"Is capitalism rigged in favour of the elites?"

 Its own Callum Williams set the stage for the debate with: