Another Masters Come To An End
Equities start the day higher as another Masters comes to an end. I don’t know, this one really didn’t do it for me, to be honest this kid inspires me more than Patrick Reed does. What is the Masters (and golf in general) going to do about its age problem? How many people under the age of 45 even watch golf anymore? 6? 7? Way too slow of a sport for an era where attention spans are 1 minute or less. Speaking of short attention spans how are you enjoying the stock market over the past few months? Not very much? Me either. Who on this planet has a feel for what’s going on right now? I’ve never felt so lost with respect to price action. I swear one day we’ve put in a meaningful bottom and the next we’re reenacting the opening to Wide World of Sports (here’s a link millennials). Can we stop with this “worry / no worry” over trade wars and tariffs please? It’s not like Trump doing random things should surprise anyone at this point, that’s just how it’s going to be until his final day. That being said, we did get a very stock market friendly tax package from this administration but that feels like a million years ago. I wish we were coasting on that instead of jumping up in down in the boat screaming about 35% tariffs on soybeans and 737s. What a mess, total soup sandwich. I spent Friday trying to think of a new acronym for a basket of stocks to watch during these here trade wars. The best I could come up with was ABCD (ADM, Boeing, Caterpillar, and Deere) but if you guys have any ideas about stocks starting with A, L, and L I could run with BAD CALL. Come on dear readers don’t let me down!!
After the open you’d think Trump walked back every tariff tweet he’d ever written because we blasted off into the stratosphere. Up 1% in the first hour but you know what? IM NOT BUYING IT. Fool me once, shame on me, fool me twice….we won’t get fooled again! I’m not getting excited about market rallies until earnings hit and we stop seeing Larry Kudlow on TV walking back random administration positions. So yea, the market was higher this morning because our daily echo chamber wasn’t filled with scary trade war talk but there really was no meaningful news. Health Care bounced the most, with Materials and Tech right behind. Winners LUK, NKTR, MRK, AVGO, and MON. Zookerberg’s Congressional testimony hit and it had all the corporate blather you’d expect from a company on its heels 1) Our fault 2) We need to do better 3) I started the company it’s on me 4) we owe it to our users to be better than this. Look, I said it before, this too shall pass for FB but the company needs to take a hard look at their place in the world. They are arguably more powerful than any nation on the planet and like Peter Parkers Uncle said “with great power comes great responsibility.” Losers were UA, KMX, NEM, LOW, GPS, and ACAD. Speaking of losers, how in the heck was Tiger Woods the odds on favorite to win the Masters? Guy hasn’t won a tournament since the London Olympics, Vegas sure sucked a bunch of square money out on Sunday. By lunch we were up a whopping 1.6% in the S&P (2.07% in the Nasdaq) but if you look at the big picture we’re kinda in no man’s land. Like our strategist Bruce Bittles said “we have to break this downside momentum for me to get excited again.” (I’m paraphrasing, he’s always exciting)
The rest of the day saw that downside momentum rear its ugly head again. Up 1.6% turned into up 0.33% because you can’t build a meaningful intraday rally off no news at all. China’s Premier Xi is due to speak tomorrow morning so let’s see what tone he strikes because that COULD build a meaningful rally. If he can reduce trade tensions between our two countries it’ll go a long way towards easing the S&Ps pain. Look, the more we test that 200 day to the downside the higher chance it breaks and the market really falls apart. Something needs to change fast otherwise I fear that’s in our near future.
Final Score: Dow +19bps, S&P500 +33bps, Nasdaq +51bps, Rus2k +8bps (these all fell 1%+ from their highs)
- Succinct Summation of the Day’s Events: People pointed to Larry Kudlow smoothing trade tensions but honestly, we can’t build a sustainable rally off Meet the Press. Late day weakness paired the big gains. Also got a headline late in the day that the FBI raided an office of a Trump Lawyer
- Here is our current “Weight of the Evidence” (H/t Delwiche/Bittles). Whole lotta neutral going on
- 4 great questions to ask a Wealth Manager. I like #3 a lot: “What special relationships do you have?” The notion that a robot can do all of these is laughable
- Behavioral Alpha is how you will be a great investor: “But what is the key to sticking with an appropriate strategy as opposed to constantly chasing your tail looking for the optimal strategy? It’s behavioral alpha or the excess return that an investor earns by being well behaved. As Bernstein said, the suboptimal strategy that you remain loyal to is likely to beat the optimal strategy that you cheat on. But how do we capture behavioral alpha?”
- Honestly, please don’t buy this. (I’m talking to myself)
- Just thinking about being a millionaire isn’t the answer. Self Help can only go so far. “Here is something the self-help folks never tell you: Millionaires don’t waste their mental bandwidth on how much a caramel macchiato costs. They focus on becoming smarter and more skilled and responding to market forces in creative, intelligent ways. Jamie Dimon isn't performing visualizations; Ray Dalio doesn't have a dream board; Warren Buffett isn't reciting mantras to himself.”
- This is LITERALLY the plot to Spaceballs: “Lam, 32, and Paquette, 39, are partners in Vitality Air, a company which sells cans of Banff air around the world. The cans retail for about $20, though the wholesale price can be much lower. Last year the company sold 40,000 units, and they hope to double that figure in 2018.”
- Learn how to make this drink for the summer! Be a hero in your neighborhood
- British Columbia has it going ON
- The blue lines are all parallel
We’ll end tonight with a guy I’d love to have a beer with. His accents from all over the world are amazing!
Have a good night