Hey folks, for most US Residents it is that time of year when we move our clocks back 1 hour, or fall back as we say…but in the US Markets it is ripping higher! Get me take on the current markets below
Weekly Sound-Bites:
• This is the weekend most Americans will set their clocks back 1 hour which has traditionally introduced the beginning of much colder months ahead…but looking at prices across all Indexes they are all hot and getting hotter…We saw record all-time highs this past week in the S&P and NASDAQ while the Dow is only 4 bps away from hitting its all-time highs…I have told all our User Group Members that we are sitting at the bar on a 3-Legged stool; Q3 Earnings, Fed Interest rate policies and China trade…getting cooperation across all legs of this bar stool will not only propel us to new all-time highs but allow the S&P to breach 3100 and move higher…of course the march higher can be tenuous with fluctuations in news reports coming from China trade progress but price action appears to want to move higher…and to top it all off, we are entering into what has historically been a very bullish time for US markets as we round out 2019…
• Now we can always find a fly in the ointment, which in turn keeps a lot of cash on the sidelines of this move higher; –but that cash will be forced back into action should prices continue higher…and typically when prices are hitting all-time highs we see the pundits rush to judgement condemning higher price action and pointing out all the potential land mines that can blow up any bullish run…this to is also normal and can amplify more cash to be put into action as prices move higher giving us that FOMO (fear of Missing Out) type of mad dash to move from cash to equities…this is when it will be time to be careful but we are not near those levels yet…
• The attack of the Killer BBB’s (as Barons put it this weekend) was so mainstream last year but so far this year we are seeing the yield spread between BBB and Treasuries actually fall which is a good thing for Corporates…BBB’s are the lowest corporate bonds that still qualifies as investment grade which opens up all this debt to the larger pension fund and insurance markets…This to me does not indicate credit risk has moved higher at this time which also shows the favorability of the current markets…
• We did get great Job Numbers this past Friday which was the impetus in moving prices to all-time highs…we saw Jobs come in at 128K which was much better than expected and the revisions to prior months were also revised higher as well…this shows the American Consumer is still strong, which is most important since Consumer Spending accounts for about 70% of the US GDP…we can also see that the VIX (a measure of Volatility) closed out the week at near a 52 week low of 12.30…
Enjoy our Weekly Round-Up
Don’t Be A Rat Brain Trader – Be the Red Stripped Zebra !!
Trade Smart !
hpb
