Tuesday, December 18, 2018

Within The Range of Probabilities

I know how present conditions seem like the definition of uncertainty, but, as a friendly reminder, here's what we said back on September 29th (just off of this year's peak) about the then coming weeks:

Quote of the Day: Data Dependent


I couldn't agree more with Bloomberg Market's Anchalee Worrachate this morning. In fact, it basically sums up how we approach the investment process (i.e., data dependent):

Monday, December 17, 2018

Read Between the Lines

While this is simply an observation, not a complaint, as the media is what it is, I never cease to be amazed at how the media can spin a headline to incite angst. Yep, angst sells!

Quote of the Day: Yet Another Sign???

The major averages had just struggled their way to the plus column on the morning when this headline hit the tape:

Chart of the Day: Again, Bearishness Can Be Bullish

Bespoke Investment Group echoes (with the data) what we've been saying herein about how bearishness among individual investors like we're seeing presently can be a bullish indicator:   emphasis mine... (and don't forget to watch this morning's video commentary)

A Quick Look at This Morning's Action, And The Characteristics of Market Bottoms (video)

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: 

Sunday, December 16, 2018

Bonus Chart of the Day

Each week I track the Commodity Futures Trading Commission's (CFTC) Commitment of Traders (COT) reports, across currencies, commodities and financial markets to get a feel for what some of the world's most sophisticated traders think of the near-term prospects for various asset classes.

Chart of the Day: How Bad Is It So Far? Comparatively speaking...

"Recency bias" often has us seeing present circumstances as somehow more impacting than similar occurrences in the past. The present correction being no exception.

Saturday, December 15, 2018

This Week's Message: Why We Remain Growthy

Question: Why, with all of this volatility, aren't we moving client portfolios to a defensively biased allocation?

Friday, December 14, 2018

Bonus Quote of the Day

According to Bloomberg's Michael Regan, Johnson and Johnson's specific woes -- as well as maybe triggered electronic sell programs -- are notably contributing to today's decline in the major averages:

Quotes of the Day: Yet Another Source of Volatility

While the headlines this morning suggest that today's rout is all about global growth fears, there can be little doubt that the legal issues facing President Trump are yet another contributor to market volatility. 

Quick note on current conditions...

As I type, Dow futures are pointing to a 220-point hit at the open. Headlines credit weak data out of China overnight, followed by weakening sentiment readings out of Europe.

Of course this weakening of conditions comes as no surprise to you (regular blog-reader), as that, as we've been preaching since the very beginning of this year (before, actually), is an unavoidable condition/consequence of the uncertainty fostered by any threat of a protracted trade war between the world's two largest economy.

Thursday, December 13, 2018

Quick Note on Present Conditions: A Market in Limbo

As I type the Dow and the S&P 500 are barely clinging to gains this morning, while the Nasdaq Comp is down .27%.

As we've stated multiple times herein over the past few months, current  macro conditions do not allow us (so to speak) to move to a markedly defensive posture within client portfolios -- despite the presently heightened level of downside volatility. In other words, general conditions suggest that stock price action presently deviates from fundamental reality.

Wednesday, December 12, 2018

Brief Note On This Morning's Action

As I type, Dow futures are, once again, pointing to a 300+ point jump at the open. While the Charlie Brown risk is still huge, there is -- at this very early point in the trading day -- a hint that the headline support may be a bit better in the near-term.

Tuesday, December 11, 2018

Bonus, And Untimely, Quote of the Day

The market is sending a clear signal (as this morning's 470 point Dow decline [+370 to -100] attests) that the time for public browbeating is over, and that serious negotiations that lead to a lasting solution need to begin.

Quote of the Day: EXACTLY!

Institutional investor hall of famer Richard Bernstein, in a CNBC  interview this morning, perfectly echoes what we've been preaching here on the blog:

Quick Note On This Morning's Action: Legit or Lucy?

Dow's up 300+ as I type on news that China is considering lowering its tariff on U.S. made automobiles from 40% to 15%.

Monday, December 10, 2018

Video Commentary: A Brief Look At Today's Action

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: 

Data of the Day

So here's the thing about this idea that we should coerce U.S. and foreign companies to "bring those jobs to America". America doesn't need them, literally! We currently have 1 million more job openings than we have people seeking work to fill them. 

Quote of the Day

There's clearly concern factored into Japan's latest GDP number, yet there's optimism in the expectations captured by the surveys. Bespoke's assessment below speaks directly to my view of the potential of, and the risks to, the global economy going forward:  emphasis mine...

Quick Note on This Morning's Action

Dow's down nearly 500 points as I type. The session this morning has been all over the place. At one point the Dow was up high double digits, then meandered its way lower, accelerating the minute Britain's Teresa May began addressing parliament on her latest Brexit maneuvers.

Sunday, December 9, 2018

A Deeper Dive Into Current Conditions and the Longer-term Setup (video)

If you haven't already, be sure to read this week's message posted yesterday. This morning's video takes you on a deeper dive into current conditions and the general long-term setup:

Saturday, December 8, 2018

This Week's Message: Crazy Market

I'm thinking the below, from my response this morning (edited for your reading pleasure) to a client's email with the subject line "Crazy Market", could be instructive (particularly the last two paragraphs) to those of you who may be feeling (literally) the latest volatility:

Friday, December 7, 2018

Video Commentary: A Look At Today's Action

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: 

A Chart To Go With Our Quote of the Day

This goes with our earlier Quote of the Day:

Best Headline in Months

Best, most promising, newsflash I've seen in months:
"President Donald Trump has been consulting with his advisors to see if his trade policies are responsible for the volatility that has hammered markets in recent weeks, according to The Wall Street Journal."
I'm certain that, hopefully among others, Mnuchin and Kudlow are confirming the President's fears. Navarro, on the other hand, has made a career out of being clueless on trade and the markets. Hopefully the President will take to heart the former two's guidance... 

Quote of the Day: It's All About Noise and Reaction

I noticed (awhile after the fact) in this morning action precisely what Bloomberg's Arie Shapira noticed:

What's Inspiring This Morning's Action? And Charts of the Day: Technical Green Shoots

Yesterday, Fed Chairman Powell sounded an optimistic tone on the economy -- on the labor market in particular. Today's jobs and hourly wage numbers came in shy of expectations, which some would say inspired the early 140+ point rise in the Dow. If that's the case, traders quickly woke up to the fact that while the numbers missed expectations, they were anything but weak, and, therefore, they offered virtually no incentive for the Fed to not hike a quarter point week after next. 

Thursday, December 6, 2018

Video Commentary: A Brief Look At Today's Action

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:

Quote of the Day: The Sky Is Not Falling

Bloomberg Markets reporter Anchalee Worrachate makes some sense:

Chart of the Day (What We Expected)

Yes, a 1,500 Dow point decline in two trading days is dramatic. But if you've been with me here are on the blog, you'll recall that roughly 3 weeks ago I suggested that at least a test of the October low was highly likely. I pointed again to that likelihood last evening.

Wednesday, December 5, 2018

Tuesday, December 4, 2018

Video Commentary

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:

Bonus Quotes of the Day

The President really needs to walk this one from this morning back:

On This Morning's Selloff (makes perfect sense)

The Dow's down 700 points as I type. If you'll recall there was a day last week when the Dow closed up 600 points. Such is the market during volatile periods.

Quote of the Day

The following from Econoday's commentary on yesterday's release of the November Manufacturing Purchasing Manager's Index (along with other data points) speaks to why we presently remain relatively growthy in our sector weightings (green highlights), and yet to the concerns we've been expressing herein and why we may find ourselves shifting to a somewhat more defensive posture in the months to come (yellow highlights):

Monday, December 3, 2018

Quick Thought On The Weekend's Big News

The Trump/Xi meeting happened over the weekend, and they did call a truce. What I can confirm from the commentary (there’s been notable differences between China’s and U.S.’s official responses, and Trump’s comments thus far conflict with both) is that there’ll be a 90-day delay in tariffs on new items, and no increase in existing tariffs, pending further negotiations.

Saturday, December 1, 2018

This Week's Message: Wild Week Coming

The coming week is bound to be a wild one for the markets: Fed Chair Powell reports to Congress on Wednesday and we get the November jobs number on Friday. And while either, or both, could indeed shake up the market, both, in terms of potential impact, utterly pale in comparison to the Trump/Xi meeting happening today.