Morning Note: "Clear Perception" is the only protection...

So, February retail sales disappoint - and tech stocks rally!

What's up with that?

Well, actually, the question is what's down (as in not up [distinguishing for the young reader]) with retail sales? 

Ah, that would be interest rates. And, as we've been explaining, stocks (tech in particular) -- right here -- simply can't do sustainably rising interest rates. 

In terms of weak February retail sales, don't sweat em, not in the least. For one, while weather is too-often a convenient fallback for the unrelenting permabull, yes, part of February's problem was indeed weather. Plus, January was revised notably higher, which notably mutes the sticker shock of February's miss. And of course we must ask, how long does it take to blow a $600 dollar (December) stimulus check? As you know, another $1,400/person is hitting bank accounts as I type...

The latter screams the question, how real is this recovery? A question we find ourselves asking in virtually every one of our weekly macro updates of late.

Speaking of our macro updates, we're heading out early Friday for our annual family ski excursion -- which means the Mrs. and I will be kidnapping 2/5ths of the PWA staff (i.e., Nick and Ryan [same last name]) till next Wednesday. Of course, you clients, Jeannette, Dan and Gladys will be at your disposal should you need attention. 

So no official Macro update. Although there are no data releases this Friday that show up in our index. So I'll be scoring our index Thursday afternoon... i.e., you may get a super-short update of this week's result.

In terms of the "rally" in tech this morning, the Nasdaq Composite Index -- where tech resides -- while up by over 1% so far, is seeing declining stocks leading advancers by nearly 2 to 1... Yeah, not a healthy scenario this morning...

In terms of the S&P 500 -- same picture -- it's up 0.27% as I type, while 315 of its 500 members are in the red...

Asian equities leaned green overnight, with 12 of the 16 markets we track closing higher.

Europe's faring well as well this morning, with 15 of the 19 bourses we track trading up as I type.

U.S. major averages are mixed: Dow down 101 points (0.30%), SP500 up 0.23%, SP500 Equal Weight down 0.58%, Nasdaq 100 up 1.45%, Russell 2000 down 1.16%.

Oil futures are down 1.97%, gold's up 0.38%, silver's down 0.54%, copper futures are down 1.55% and the ag complex is up 0.46%.

The 10-year treasury is up (yield down) and the dollar is up 0.10%.

Led by uranium miners, tech, wind power producers, emerging market equities and ag commodities -- but dragged by oil services, energy, banks, base metals and financials -- our core mix is off 0.10% early in the session.

Seriously! I can't emphasize enough how my intimate experience with markets over the past 36 years -- and, not to mention, my obsessive study of economic/market history -- jibes with the following from Galbraith's A Short History of Financial Euphoria: 

"Regulation and more orthodox economic knowledge are not what protect the individual and the financial institution when euphoria returns, leading on as it does to wonder at the increase in values and wealth, to the rush to participate that drives up prices, and to the eventual crash and its sullen and painful aftermath.

There is protection only in a clear perception of the characteristics common to these flights into what must conservatively be described as mass insanity. Only then is the investor warned and saved."

Have a nice day!
Marty