Tag Archives: Main Stream Media

Economic Numbers Weak as the DOW punches through 22,000

The Economy: Amidst weak economic numbers the DOW punched through 22,000 and is holding as we go to press. The Fed, which backed off their intent to normalize monetary policy, has provided another leg up to the markets. During the election Trump castigated Yellen for keeping interest rates abnormally low. Now he supports lower for longer. Likewise stock market valuations. During the election Trump called stocks, “a big fat ugly bubble.” Now he’s taken ownership and claims credit for the surge since the election. Yellen, who is decidedly anti-Trump has the power to crush this market. Yet she also has her legacy to think about. Trump has vowed to replace her in 2018. The question is, “Does she want her legacy to be that of the Fed Chair that crashed the market or is she going to manipulate things so that her successor has to face the music?”

Food for Thought: Shoot the Messenger! The MSM is aflutter about the blowout earnings season. But the Financial Times has this to say in the section titled, ’Reasons to be Skeptical About the Earnings Recovery,’ “These are far from reassuring numbers. The picture they reinforce is that US large companies have been able to grow earnings through financial engineering even though their cash flows are flat, or even declining. …the apparent earnings recovery of large US listed companies … may have been something of a mirage.” For example, the DOW is a price weighted average, so Boeing (BA), with its $235 price has been responsible for ¾ of the DOW’s recent 278 point increase. After eight years of the bull market, no one is thinking about risk anymore.

Music of the Week: Dean Martin’s “Italian Love Songs”

 

The Economy Improves

The Economy: Consumer confidence surged; Everything home-building looking positive. The US continues to post impressive economic numbers. Though nay-sayers shout “Fake News” with every number that’s posted. All news is good news with individual investors finally beginning to pour money into stocks. Brexit, Trump, the rise of populism, the assault on globalism, immigration and the environment are no reason to slow financial markets still feasting on $200 billion a month in central bank stimulus. Repealing and replacing Obamacare was to provide billions in tax savings. Those savings were to be factored into the overhaul of the tax code. The narrative was that passage was a slam dunk. The subsequent fail produced a new narrative that Tax Overhaul would sail through regardless. Markets were thrilled that billions in lost tax savings no longer mattered. True to form, a massive rally followed the fail.

Food for Thought: The Trump phenomenon continues to unfold in stark black and white. Love him or hate him he is a phenomenon. Polarizing in the extreme, he’s brought out the worst in many. The main stream media (MSM), Hollywood, the UN, NATO and foreign governments seem to be the most shocked. Sacred Cows everywhere are in retreat. All concerned are becoming aware that POTUS is a brawler who enjoys taking the fight to the street. As a businessman The Donald understands that the best way to gut a program or department is to decapitate administration and cut or curtail funding. No money, no staffing, no decisions, no activity, no continuation of programs outside the Trump Agenda. Brilliant or Brutal depending on your persuasion. How this ultimately plays out is anyone’s guess. How the financial markets respond is also anyone’s guess. With the stroke of a pen, Trump is undoing decades of U.S. policy and redirecting national priorities and resources. Markets continue to treat these unprecedented events as a win for all sectors of the economy. The prime example is Climate Change. The administration’s position is, “We’re not going to spend any more money on that.” Yet the response of financial markets is that the trillions invested in this sector are going to continue on the same growth trajectory as when they were darlings. Reminds us of PT Barnum’s “There’s a sucker born every minute.”

Music of the Week: Jack Johnson’s “Jack Johnson”

Trump Trumps the Numbers

The Economy: The latest numbers appear to support an improving global economic picture. That certainly seems to be the case in the U.S. There are issues with Italian Banks but the ECB is determined to do whatever it takes to preserve the EU regardless of how they have to jigger the numbers. There’s more transparency in the U.S. but conflicting data or opposite interpretations of the same data creates confusion. These conflicting interpretations are not fake news. It appears to be how the data is parsed. We continue to urge that you evaluate your personal and professional situation to properly evaluate how events will impact you. With the flurry of activity from the Trump administration, it’s impossible to know how markets will ultimately react. Caution is advised.

Food for Thought: The Trump agenda continues to quickly unfold. Executive Orders have been announced almost daily. Cabinet officers continue to be approved. All branches of the Federal Government are on notice that budget cuts and profound change is coming. Global governments are struggling to make sense out of the new and developing U.S. foreign policy. The Main Stream Media (MSM) has been and continues to be demonized; officially branded as “The Opposition.” With less than 2-weeks in office, there is greater uncertainty than we’ve ever seen. Some say the deep state is immune to change. I think it’s premature to assume that the leviathan can’t be moved in a new direction. The challenge is to skate to where the puck will be.

Music of the Week: Huey Lewis and The News “Greatest Hits”