2020 OUTLOOK
We are coming off a record year in equities as we close out 2019. Equities made record highs and interest rates reversed in dramatic fashion versus their 2018 levels. We are closing out this year with a high amount of…
REGUNOMICS
It is our view that monetary and fiscal policy cannot affect the economic trajectory. It is the Federal, State, and Local policies that are killing the system. The dollar has gone up ever since the Fed has come out dovish…
BBB is junk
700 billion of refis in corporate America coming in 2019. Per recent Barron’s article (1/12/19), should bring significant downgrades in corporate credit. We believe downgrades roll down: i.e. BBB to BB+, BB+ to BB, etc. We believe we retrace the…
VIX Indicates Low in the Market
We believe the intermediate low is in on the equity markets (when the VIX hit 50) Markets should be range bound for the foreseeable future (Dow: 23775 to 26616, S&P: 2600 to 2872, Nasdaq: 6800 to 7505) Credit markets, commodities,…
Dollar Free Fall
We believe the U.S. deficit will be greater than $2 trillion Dollar trouble could cause Federal Reserve to raise 5-6 times We believe the dollar will be 10% lower by summer
Outlook for 2018
BULLISH ON COMMODITIES AND PHARMA We want to re-iterate our November 2017 view. We like commodities and pharma!! From November, oil has climbed $5/bbl and pharmaceutical companies such as Teva and Valeant have climbed 39% and 57% respectively. We believe…
Winners for 2018
We believe the winners for the end of year and 2018 will be commodities and pharmaceuticals Our budget deficit means more notes, bills, and bonds will be printed, which will drive the dollar lower A lower dollar is inflationary…
High Chance of Fed Hike
We believe there is a high chance the Federal Reserve raises this week. Weak dollar is inflationary Good Consumer Price Index (CPI) numbers yesterday (1.9% vs 1.8% expected) Brits may raise rates as well Europe probably raises by end of…
Derailed or All Aboard? Keep an eye on the transportation index.
The Dow Jones Transportation Index has begun weakening off its highs. While earnings reports from companies such as CSX Corp (“CSX”) and Union Pacific (“UNP”) came in well, we saw their stocks fall off due to weaker forward guidance. We’ve also seen…
Rotation Out of Tech
We believe there is no catalyst to move the market higher until mid-July when earnings come out. We believe it’s going to be a long hot summer. There are some geo-political risks that could upset the apple cart, but this…