An Influx Of Global Data

Equities start the slightly lower as we get an influx of global data. Here, Bloomy did a great job summing up the data in this article so click away and soak up some multi-color bar charts.  What’s the main takeaway for those of you who want to march on? The US is still leading the world in Manufacturing PMIs, so nothing new there, but Europe is starting to perk up as well. In fact, here’s another article on why Europe is suddenly booming! We also saw CPI this morning (dead in line print) and you could argue this data point has rocketed to the top of our “most watched” list. Any surge in this and black cars are gonna be rushing Fed Presidents to big mahogany tables for cucumber sandwiches and rate hikes. Anyway, it’s slow so I wanna chat about a stock near and dear to me:  Disney. They say to invest long term right? That the key to wealth is finding stocks that last generations and provide stable returns for patient investors. Which brings me to Cinderella. The latest movie release has done $122mm as of March 22 and I want you to consider this: Cinderella is 65 years old. She brought the Disney company revenues in 1950 and, this is the great part, every single year since. How many companies do you know have assets that produce revenues / profits for 6 decades? Oh there are a few who do, I’m not saying DIS is the only one. I’m just saying as you look at your investment landscape there are always a few that seem obvious, yet are still attractive. You know what else? Disney has Marvel and Star Wars. You think those are 60 year assets? I do. You know what else? Disney can raise prices and people don’t care because their theme parks endlessly packed with people like me! Companies that have pricing power, generational assets, incredible brand value, and amazing management…..they do exist! And sometimes they are sitting in plain sight (Baird does not cover DIS).

After the open, it was another one of those really quiet sessions where the market rocks back and forth on a gentle tide.  2102, 2106, 2100, 2095, just random price action as catalysts are scarce. One reason why volume might be down is that companies are going into their buyback “blackout period” before earnings. GS talked about it this morning and Bloomberg ran this story if you wanna delve a bit deeper into it. Essentially that constant bid under the market goes on hold so seeing more frequent days with slightly negative price action shouldn’t surprise us. Buybacks are running 2% of overall volume right now…that’s a decent chunk to temporarily remove! Yields continued to make a strong move lower, 10yr UST touched 1.87 around lunch proving once again that being bearish on bonds is hard. Like insanely hard. At this point I’d have to see 10yr yields at 4% to think being bearish was right. Stock winners today included NFLX, FSLR, TWTR, and both the GOOGLES! Losers were WLL, DO, OKE, RIG, and EQIX. Take a look at the WLL chart…pain in these energy names is not over. You know when it will be over? When we see articles about Goldman and Blackstone and other PE shops taking energy assets from drowning enterprises. Remember the housing one’s? I do. I remember reading about Blackstone buying Miami condos dirt cheap. In my opinion, it’s just not there yet in energy. 

The final hour saw us sink to the lows where we closed. 2093, down 50 bps. So that’s a two day decline of about 0.75% on no real news. Look it happens, there’s not much going on and buybacks are going to be quiet for a bit. Clients are content with what they have so inertia reigns. I use this phrase often and it’s perfect to describe our current tape: buyers are higher and sellers are lower. People will buy the breakout or sell a sharp decline, they won’t transact in this no man’s land. So we sit and watch for a fresh piece of data to obsess over, and if anyone out there is looking for something to obsess over its me! By the way, since it’s slow and headlines are scarce let’s talk amongst ourselves. If you have the time, send me your top 3 worries about the stock market right now and we’ll discuss them this week. I’d love to aggregate a nice list to share with you all because that kind of information can be invaluable. So help me out if you can dear readers!   

Final Score:  Dow -57bps, S&P500 -61bps, Nasdaq -32bps, Rus2k -9bps

News Highlights:

It was a slow day so we’ll end with two videos tonight.

The first is pretty much how I would start an Olympic slalom course.

The second is a dog…who couldn’t catch a cold.  For some reason I love watching this dog miss absolutely everything thrown at it.

Have a good night.