Wkly Round-Up thru Mar 29th 2019; April Fools!

Hey everyone, I hope you are enjoying your weekend. First Quarter 2019 is now in the books and what a Quarter it was! It was a record setter for the Bulls but of course it is coming off another record setting fourth Quarter with this one being firmly in the Bearish Camp. And now, as we kick of the Second Quarter we do so on April Fool’s Day and I guess this is most appropriate!

Market Sound Bites:

• With the S&P ending its best Qtr. since Sept 2009 gaining over 13.07% (it did follow a Q4 drop just short of 20% worst in decade) a big part of gains were in stocks acting like Bonds…NASDAQ finished up 16.49% (best since Q1 2012)…and the DOW rose 11.2% for Q1 which was its best gain since 2013…it’s been a rather strange time where we are seeing defensive sectors (like Real Estate Funds) doing well but also we’re seeing growth in Technology sector also…this coming week we should see more US Economic data on Manufacturing, Employment and Wages to help better sort things out…in addition we have 1st Qtr. Earnings coming up in a few weeks and already the expectations are showing it to come in 3.8% lower than same time a year ago…this would make it the first time we would see a YoY decline in Corp Earnings since summer of 2016…

• 10 Yr Notes fell 28 bps and 65 bps in past 2 Qtrs…and we saw a small Yield Curve Inversion this past week with 3s over 10s which barely moved back into the green on Friday by 1 bps…

• And regarding inflation it is still in hibernation where the latest numbers our this past Friday showed us around 1.8% and still short of the FEDs 2% target rate…We have seen with Power Ranger Boom Powell that most of the current FEDs Monetary Policy is most talk vs action…

• We also saw Q4 Growth was reduced to 2.2% giving full year GDP growth at 2.9%…while Consumer Spending (which represents about 70% of the GDP) came in an anemic 0.1% in January after falling 0.6% the month before…

• And Europe is still having issues on the Growth and Inflation front where both are much lower than desired…The Euro Zone will be lucky to hit a growth target of 1% GDP…there seems to be more room for fiscal stimulus but having a common currency makes it very difficult for countries like Italy, Spain, Portugal and France to spend more where countries that could afford to spend more, like German, Austria, Finland and the Netherlands don’t want to…this gives us a situation where those that need fiscal stimulus can’t and those that don’t want fiscal stimulus can…

Get my take all market action in this week’s Weekly Round-Up:

 

Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra!
Trade Smart !!

hpb