Inverted. Can United Health or Boeing Float Through This?

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For a moment on Tuesday, the yield curve between two and five year bonds inverted.  Bad day.  But that’s not the worst.  When the two-year and the ten-year invert, recession follows, every time.  That’s history speaking Bub.  Tuesday was a temporary partial inversion.  If the twos and tens invert, it means we have approximately 18-24 months before recession.

 

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.

 

Graphic, Europe, syn

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.”  

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?

 

Graphic, China, troubles
Trade is like team sport. When all work together good things happen. This trade squabble is on the verge of a full-blown trade war. U.S. equities are suffering from the mere talk, and now from the widening and costly financial fallout. You think AAPL can thrive to new highs without Chinese consumers? If you do, you’re alone.

 

 

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?

 

Graphic, BA, fund
Boeing’s technical trouble began months back. STOCKjAW was fortunate to leave at $353. Altitude dives of -7% are, needless to say, unusual for BA. But there it is. Who wants a wing walk?

 

 

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
Chart, BA, 12-06-18
People love Boeing. Boeing has a future, in a duopoly. They have a years-long backlog. They also have these footprints. And a 737 MAX problem, and democratic house, and budget pressures–Boeing’s got military products too.

 

Graphic, UNH
UNH’s price action draws concern. Constant battles with it’s 21 and 50 day EMAs is never good. Nonetheless, UNH is one of the very best charts and companies going. We’ll stay today.

 

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.
Chart, UNH, 12-7-18
Eroding market forces at the door. Safe havens such as United Health Group and Boeing are now gravity prone. The safety of UNH is now being tested–that means today.

 

 

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.

AAA Stockjaw scooter

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
STOCKJAW.COM EARNESTLY THANKS YOU FOR YOUR INTEREST AND WISHES YOU THE VERY BEST.  THE WORLD BEING WHAT IT IS, WE MUST POST THE FOLLOWING:  ALL CONTENT ON STOCKJAW.COM IS PURELY FOR GENERAL EDUCATIONAL AND ENTERTAINMENT PURPOSES ALONE.  ANY ACTION TAKEN BY ANY READER IS THE SOLE CHOICE AND RESPONSIBILITY OF SAID ACTOR.
Be careful.  Do the work.  Have patience, with yourself.  Never put your dreams away.

 

STOCKjAW

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