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Wkly Round-Up thru Oct 18th 2019; Take-Offs Must Equal Landings!

Hey Folks, we are seeing a lot of choppiness in the markets where price action is looking for the next catalyst to push prices thru the 3000 levels in the S&P….we clearly have a lot of potential opportunities (or land mines depending upon your perspective) to move the markets; -from the China trade deal, Fed interest rate policy, Q3 Earnings, more BREXIT nonsense, Turkey / Syria conflict, Trump Impeachment hearings and many other pending issues in waiting. In time this will all play out but for now we will need to watch key price levels and trading volume behind price to give us better conviction of how the fourth Quarter will play out for the markets.

Week Ending Sound Bites:

• I lead this Weekly Round-Up with the BREXIT voting this weekend to extend BREXIT and turn down the deal that Boris “Bulldog” Johnson had negotiated with the E.U. Odds now move much higher for another complete vote on the Leave vs Stay scenario….so, the ongoing saga continues…
• It seemed this past trading week every good piece of market data was also meet by an equal piece of stale pie….stronger start to Q3 Earnings by banks and health care was also met by bad news from BA, JNJ and IBM along with slower GDP numbers out of China and the issues over in Turkey and Syria; all of which was enough to push the DOW down on Friday to close out the week underwater…
• Meanwhile the Fed Fund Futures markets are still pricing in about an 89% probability of another 25 bps rate cute at the next Mtg on Oct 30th…in addition, the FEDs are have been buying about $60B monthly of shorter term T-Bills which has naturally rightsized the Yield Curve into positive territory…The process of Quantitative Tightening over the past few years saw the FEDs reduce the US Balance sheet over $600B which, according to analyst has kept the USD much stronger and has been essentially the same outcome as if they were raising interest rates…well, this has come to a complete stop and this will weaken the USD and allow more US Mfg. growth and could lead to more value over growth stock appreciation…This will also help Gold and Silver appreciation as well over the longer term…And keep in mind that over 40% of the S&P 500 Earnings comes from offshore so a weaker dollar flows to the bottom line of most companies…

Enjoy our Weekly Round-Up;

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