Worried yet? Should you be?
It happened. The yield curve on two and five year treasures momentarily inverted. When twos and tens invert, a recession is 18-24 months out, every time.
Following the bouncing ball
Is it any wonder that within mere days investors have shifted concern to yet the next “worry?” Unruly rates and trade warring now come second and third in line. Now it’s, wage inflation, no–it’s still rates and Friday’s jobs #s, or elevated corporate debt, or the deleveraging of said debt, or maybe liquidity–and a spontaneous fear-driven lock-up of the credit market. Or is it yield curve inversion?
“What, us worry?”
Trouble on a thumbnail.
Don’t like domestic troubles? France now hates Macron, the EU hates Alphabet, the entire EU is under-going a slow down, last GDP read 1.7%, Brexit drags on as May’s government falls. Oh, and they all resent us for the NATO pimping and the tariff thing. Nice.
Our equity market suffers from are more than mere domestic concerns. We also face slowing Europe, a panorama of EU legislative hostility toward our best and brightest tech.
The EU seems to hate loose data and monopolies–their view. Alphabet, Apple, Facebook, and Amazon, see it differently. Now these companies face the legal, and political, both in Europe and at home. Do American lawmakers even know who or what drives American economic strength. Really?
Remember when Zuckerberg wheeled a thinly-veiled version of tech prodigy up to capitol hill? That talk-by clearly displayed the disconnect between American lawmakers and the economy that funds the whole joint.
Key American legislators are vague on the economy, the internet, big tech, and equity investing. Mention “investor” to a congress member and many picture Wall Street, or investment bankers. They think puts belong behind doors and calls all come on the phone. The carefree regulation talk of legislators has actually helped kill the momentum of tech. Are legislators supposed to gaff our sole market leaders? “Leadership you say? That’s a party thing yo.”
Washington Party Thing
The “belt Way.”
Fresh in town you’re the hated new, the water-boy, FNG, a meddling threat.
Wowed by power and process you bow and revere.
They dangle something powerful, sexy, and YOURS. You’re hooked.
…and the big sequestered legislative machine plows blindly on.
A fart in Washington can spin a tornado over portfolios. An ongoing gas attack from the hill can turn your portfolio into a fire ant mound of torture.
Any investor, oops, anyone active enough to be reading us, can tell you without hesitation who the market leaders have been. That’s right–big tech, MAGA. Is it too much to ask that our legislators gather economic and market basics? Legislators produce law, some effecting the economy for which they are responsible. Doesn’t responsible governing include a working economic mind?
China.
Who’s not exposed?
Opportunity in this market?
Are we now losing our save havens?
When times get tough many turn to old favorites. At one time that would have meant JPM or Goldman, or even Ford or Exxon in the way back. Full-bore growth has been the way for so long, well almost forever. That aged market croaked “growth” and it was good until it wasn’t.
That golden era of goodness has turned relentlessly technical. So what or who now? Growth doesn’t work. Nor does buying the dips. Boeing’s stable right? And UNH? Ah, did you watch yesterday?
Thursday’s intraday action pushed Boeing down -7%(including pre-market). Despite ending the session up by 1.3%, the net was negative. That volatility comes on top of Tuesdays foul decline. Takeaway–it’s a dangerous environment, even for hellacious fortresses with blindingly-bright futures, like Boeing.
Yes, Boeing has taken a beating, yet less so then most. This week had proven hard thus far. Today’s action should provide a dash of insight concerning their future. Even massive backlogs may not be able to protect even the best. For us, Boeing’s yet a no-go on trade war troubles, and domestic budget pressures. Perhaps these are what we now see actively moving it’s price-action.
Boeing(BA)12-06-18
UNH currently sits atop all exponential moving averages. That’s new. Shares have battled the 21 and 50 day EMA’s since September. UNH’s price-action has been near bullet-proof, until now. Tuesday was brutal. Thursday sucked the intraday share price down -5%(including pre-market.) The green we see for Thursday was the session-ending crawl back. Check Thursday’s long bottom wick. Does that read as “stable?”
United Health Group(UNH), 12-7-18, 3:54AM.
Both Boeing and United Health are set to open lower Friday morning.
Timing counts in investing. Valuations also. Being imprudent is expensive. So are being wrong, or early. We believe this market can not be predicted. No market can. Investors have been trusting the trend. “The trend is your friend.” The only trend this market has is down and it doesn’t look done. STOCKjAW will continue to let the market do the talking.
CURRENT STOCKjAW HOLDINGS
United Health Group(UNH)
Verizon(VZ)
Thanks for reading.
STOCKJAW.COM
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Additional resources:
Investopedia.com. Seriously Wonderful. Fact.
http://www.investopedia.com/
Charles Schwab. In Our Opinion, the best broker going.
https://www.schwab.com/public/schwab/client_home
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Be careful. Do the work. Have patience, with yourself. Never put your dreams away.
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