Rumors, Reports, Rate Cuts?

Posted on June 6, 2019 by Jim Carlton

Independent Investment Management designed to protect and grow your wealth.

Friends

It’s amazing what moves stocks these days-both up and down.
Today stocks rallied on word that whatever tariffs were going to be initiated
next week on Mexican goods is being delayed for the moment. Stocks moving up
and down on tariff rumors is the world we live in now, but my goodness it all
seems amazingly goofy. Anyway, we trade the markets that we have, not the
markets that we think we should have.

By the close, the Dow Jones Industrial was up 181 points to
finish the day at 25,720. The S&P 500 was up 17 points to close at 2,843.
Gold was up $4 to trade at $1,338 per ounce, while oil was up $1.36 to trade at
$53.04 per barrel WTI.

The other thing buoying stocks these past few trading
sessions is the hope that the Fed is about to come to the rescue with rate
cuts. Tomorrow’s jobs report will either feed that narrative or put the brakes
on it. Good news might be bad news if the number is too good (remember the
expectations are the 185,000 new jobs were created in May). Of course, if the
jobs number is as bad as the ADP number was this week, what does that mean?
Yes, it fits the Fed rate cut narrative, but is weakening economic data what we
really want? Let’s see how tomorrow’s jobs number plays.

Have a nice evening everyone.

Jim

10200 Grogan’s Mill Road, Suite 340
The Woodlands, TX 77380
(281) 298-2700 Phone
(877) 824-4299 Toll Free
(281) 298-2760 Fax

[email protected] www.chjwealthmanagement.com

Investment Advisory offered through Carlton, Hofferkamp & Jenks Wealth Management, LLC (“CHJ”).

*Numbers and figures sourced from the following: Bloomberg.com, CNBC.com and Finance.Yahoo.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

CHJ Wealth Management,
10200 Grogan’s Mill Road,
Suite 340
The Woodlands, TX 77380

Moving On Up, to the East Side.

Posted on June 6, 2019June 6, 2019 by thependulumswings staff

Jeffery Bezos may only be worth half as much as he was a few months back, but yesterday it was revealed that he bought not one, not two, but three high rise condos on Manhattan Island, New York, NY. As a matter of fact he liked the neighborhood, er, high rise so much that he bought the penthouse, and the space right under the penthouse, and the space right under the space right under the penthouse. The total space will be worked into a three story condo with a modest 12 bedrooms. The price was an Amazon Prime bargain at $80 million. Adjusting to the single life requires a few creature comforts.

As CEO of the largest retailer in the virtual world, capitalism has been comforting to Mr. Bezos. Though the stock is down a bit from it’s high, it’s valuation had crossed a trillion (with a “T”) dollars recently.

Capitalism has been good to the Sam Walton family as well. As beneficiaries to Sam’s fortune created by Sam’s Clubs and Walmarts, they live life as large as they wish as well. They just aren’t too flashy. Walmart, the largest retailer in the brick and mortar world is valued at a palty $350 billion dollars.

So enter one Bernie Sanders yesterday into this capitalism love fest. Walmart held its annual shareholders meeting. Bernie had a few thoughts that he wanted heard. Walmart said, “We have an open door, let’s hear them.”

In a three minute call to action Bernie stood up and asked that Walmart go from $11/hr as opening hourly pay for its employees up to $15/hr. He also told the board that “regular” employees should have a seat or three on their board.

“Walmart is the largest private employer in America and is owned by the Walton family, the wealthiest family in the United States,” said Sanders. “And yet, despite the incredible wealth of its owner, Walmart pays many of its employees starvation wages — wages that are so low that many of these employees are forced to rely on government programs like food stamps, Medicaid and public housing in order to survive.”

“Frankly,” Sanders continued, “the American people are sick and tired of subsidizing the greed of some of the largest and most profitable corporations in this country.”

He cited Amazon among others as companies that have raised their entry pay level to $15/hr and continued to do well. He is right. Amazon has done quite well.

Walmart rejected Sander’s proposal faster than they do a vendor’s proposed price increase. After all, shouldn’t market forces be the catalyst for wages? America is nearing zero unemployment. If you want more money isn’t it there if you qualify, say at Amazon, or Target or anywhere that the market forces force employers to pay up for help? Just asking.

Maybe Bernie isn’t so crazy after all. You see he’s chasing Joe Biden, who told America in his “I’m running for President” coming out speech in Pennsylvania that the middle class is getting left behind in the Trump years. Joe should check the stats on the Obama/Biden years, but we digress.

So Bernie took a swing for the class a bit lower than middle yesterday. The TV cameras loved it. It takes a lot of video to fill 24 hours you know. Bernie yells louder and longer for the little guy than most anyone else. And, he doesn’t spray his hair like The Donald. Therefore, outdoor rallies like he had after his appeal to Walmart seem to have much appeal to cameras near and far as his unkempt coif whirls like a dervish.

Jeffery Bezos, no doubt, was looking down on all of this, happy that he already has his minimums set at $15, and happy with his real estate purchase too. Soon, but not soon enough, he’ll be looking down from 35 stories up.

These fixer upper remodels take time you know.

More Tariffs

Posted on May 31, 2019 by Jim Carlton

Independent Investment Management designed to protect and grow your wealth.

Friends

As you know, tariffs are the
Presidents favorite blunt instrument to influence behavior, but markets aren’t
particularly fond of them. The President’s threat to impose tariffs on Mexico
if they don’t become more active/helpful in the immigrant crisis sent stocks
tumbling down.

For
the day, the Dow Jones Industrial Average was down 355 points to finish the day
at 24,814. The S&P was down 37 points to close at 2,752. Gold was up $18 to
trade at $1,310 per ounce, while oil was down $3.33 to trade at $53.26 per
barrel WTI.

The correction that we
referenced earlier in the week continues and trade war headlines continue to
feed the bears. It was a difficult month of May and now we enter the dog days
of summer. Stay tuned, we’ll try to keep you cool and informed over the coming
months.

Have a great weekend
everyone.

Jim

10200 Grogan’s Mill Road, Suite 340
The Woodlands, TX 77380
(281) 298-2700 Phone
(877) 824-4299 Toll Free
(281) 298-2760 Fax

[email protected] www.chjwealthmanagement.com

Investment Advisory offered through Carlton, Hofferkamp & Jenks Wealth Management, LLC (“CHJ”).

CHJ Wealth Management,
10200 Grogan’s Mill Road,
Suite 340
The Woodlands, TX 77380

(Don’t)Take the High Ground!

Posted on May 23, 2019May 23, 2019 by thependulumswings staff

Recently this writer took a one hour guided tour of the Battle of Franklin (Tn.) that took place in the very late stages of the American Civil War on November 30,1864. When asked who won, the tour guide responded, “it is always said that the side that stands on the ground the next morning won. So it was the Confederates who won.”

Last evening and well into this morning the Mississippi St. Bulldogs and LSU’s Fighting Tiger baseball teams fought for 17 innings before the (damn) Dogs prevailed 6-5. The teams combined for over 600 thrown pitches,35 strikeouts, 30 hits, and 40 men left on base in the 6 hour and 43 minute “war.” Afterwards, the Bulldogs ran off into the night with victory while LSU stood silently on the “battlefield” wondering what hit them. It was the Tigers who stood on the ground, but it sure wasn’t victory.

The Confederates lost over 6,000 brave men while the Union lost over 2,000 in the five hour battle that at times was savagely reduced to hand to hand combat. The Union’s main goal was to build a bridge to allow them to cross the Harpeth River to get to Nashville where warm food and warmer beds awaited. And, in the day before and day of the conflict, build it they did. The Confederates stood on the high ground on December 1st, but it sure wasn’t victory. The Union (damn Yankees) was in Nashville by then.

When real wars, or bombings, or tragedies hit we are correctly reminded to not compare sports contests to the actual. “It was a war out there.” “We fought and fought.” “It was just going to be the last man standing.” We ugly Americans cannot help ourselves though. We marvel at the intestinal fortitude, authentic passion, and unyielding desire of our teams and their opponents. Along the way, we drink cold beer and eat warm food. Then we go to sleep in warm beds (sometimes at 3:15) wondering in amazement how our battalion won or lost. Make no mistake though, we always feel better when we are on the winning side and hold the high ground.

Which brings us to General Pelosi and General Schumer and Commander in Chief Trump. Yesterday, minutes before they were scheduled to meet to further discuss a big spending bill on American infrastructure, General Pelosi threw a very public, verbal, hand grenade at the Commander. “We believe that no one is above the law, including the president of the United States. And we believe that the president of the United States is engaged in a cover-up,” she said.

President Trump, enraged, countered by “blowing up” the planned peaceful meeting saying that when they wanted to end the phony investigations and work with him they could go about repairing the nations highways, airports, and bridges. And so the war for power in DC had quite the battle yesterday.

Somehow LSU has to pick themselves up by the boot straps just 10 hours after they lost, and play an elimination game at 1 PM today. Elimination? That sounds permanent. There is that war/sport comparison again.

Permanent too was the loss of the hundreds of thousands of soldiers from the north and south who fought and died like the 8,000 did in the Battle of Franklin over 150 years ago.

Washington DC could learn a lot by watching young adults play baseball into the morning hours. Washington DC could learn a lot taking a one hour Battle of Franklin tour as well.

It isn’t always about the high ground. Sometimes its better to lose the battle and win the war. Washington DC continues to lose the war trying to win the battle.

Continued Softness

Posted on May 20, 2019 by Jim Carlton

Independent Investment Management designed to protect and grow your wealth.

Friends

It was a somewhat soft beginning to the week for stocks, as
more than real selling pressure, there simply does not seem to be much of an
appetite to buy. The continuous drumbeat of trade war headlines continues to weigh
on the markets collective psyche while economic data continues to be mixed. We
get more earnings from retailers over the next couple of weeks including Home
Depot tomorrow. We continue to see the department stores struggle, but Walmart
had good numbers last week, and we’ll get a look at Target on Wednesday.

As for today, by the close the Dow Jones Industrial Average
was down 84 points to finish the day at 25,679. The S&P 500 was down 19
points to close at 2,840. Gold was up $2 to trade at $1,277 per ounce, while
oil was up $.40 to trade at $63.16 per barrel WTI.

The old “sell in May, and go away” adage appears to be
working so far this Spring (as with any old Wall Street adage, you could flip a
coin just as successfully), but as we have noted this month’s weakness could be
attributed to trade headlines as much as any real valuation risk or earnings
weakness. Whatever the reason, stocks have floundered somewhat recently and the
bulls are searching for a reason to buy.

Have a nice evening everyone.

Jim

10200 Grogan’s Mill Road, Suite 340
The Woodlands, TX 77380
(281) 298-2700 Phone
(877) 824-4299 Toll Free
(281) 298-2760 Fax

[email protected] www.chjwealthmanagement.com

Investment Advisory offered through Carlton, Hofferkamp & Jenks Wealth Management, LLC (“CHJ”).

CHJ Wealth Management,
10200 Grogan’s Mill Road,
Suite 340
The Woodlands, TX 77380

The Final Table

Posted on May 16, 2019May 16, 2019 by thependulumswings staff

With all due respect to Sumo wrestling, does the competition, strategy, and drama get any bigger than when the World Series of Poker’s final table gets down to the last two players? The chips are stacked high for both contestants and the stakes are higher. For the winner the financial reward is great. For the runner up the financial reward is good. For the ego, winning trumps everything.

So at the final table in the World Series of Trade Negotiations (aka tariffs) we have President Donald Trump from the United States and President Xi Jinping from China (you know the country with the name that Trump pronounces “Chiii Nna”) going heads up.

The final table has been down to these two for several months now. The hold (pocket) cards were dealt decades ago. The US, in a sense, holds the advantage as the Chinese imports to the U.S. far outweigh the U.S. exports to China. Plus, the U.S. economy is larger than China’s, hence its chip stack is bigger. The Donald knows this.

Onto the board came the flop (the first three of five community cards). And for months verbal threats about raises were bantered about. But each player checked. And checked. Manufacturers eyes began to have that “I’ve been in Vegas too long” look about them. Then, Trump check raised. Last weekend, tired of the slow play, he threw down a 25% pot sweetener on about 200 billion worth of imports. Xi Jinping didn’t blink. He quickly called that with an import penalty on $60 billion in U.S. goods.

Now the turn (community card number four) card is exposed. Trump immediately, showing strength, pushed further. His administration on Wednesday slapped a major Chinese firm with an extreme penalty by adding Huawei Technologies Co. Ltd. to the Commerce Department’s “entity list.” This is effectively a death penalty for a foreign company to survive as it blocks its attempt to do business in the U.S. You can get off of the list, but the cost is more painful than mucking a winning hand.

The department said that it reached this decision because Huawei “is engaged in activities that are contrary to national security or foreign policy interest.” Perhaps and probably, but why now? Why not? Who cares as who is Huawei you ask? Well, they are only the world’s largest telecommunications equipment maker located in, you guessed right, “Chiii Nna.” The ramifications to Google, chip makers, the 5G platform itself, and many other global entities is huge (or yuge if you will).

Evidently, Trump isn’t bluffing. He sits confidently sipping his favorite beverage ( “just for the taste of it, Diet Coke”) staring at his opponent. He knows that his political base is standing right behind him yelling words of encouragement and even holding up signs in support. “Go President Go.” Meanwhile, Xi Jinping considers calling in a back masseuse while he ponders just how strong his hand might be compared to The Donald’s.

Next month the river (the final community card) presents itself. The two leaders plan to meet in Japan. President Trump often speaks to the great relationship that he has with Xi Jinping. Hold your friends close and your enemies closer and your cards closest of all. By then some economic damage will have been done as the world’s two biggest economic powers are under the gun but seem content to hold em for now. The stock market has side bets pending galore.

The buy-in for the tournament was steep. The pot has grown considerably steeper. Both men and the countries that they represent are now pot committed.

Will we see more raises? It sure looks likely as we see no fold from either in sight.

Oxygen, It’s What’s for Dinner.

Posted on May 14, 2019 by thependulumswings staff

Oxygen, as you know, is most essential to living. So, when last Friday’s monsoon passed by and brought fresh air to Saturday morning, this BBR staff member decided more was better. After a week of incessant buffoonery in the political arena a short but brisk run would be the(non political) ticket to even more fresh air to clear the head and pump the lungs. But, the favored outdoor trail was still swamped. Plan B took us to the treadmill in the gym.

Many others had the same idea. The one we quickly took had, you guessed it, MSNBC on the monitor ten feet in front of us. Evidently, there is no rest, nor exercise, for the weary. And there they were, all of them. It was five guests and the very partial host Joy Reid. A split screen of six in total had each of them screaming about AG Barr’s refusal to appear again before Congress, a “Constitutional Crisis,” Trump’s tax returns, etc. We couldn’t hear it, but the closed captioning told all. There isn’t enough oxygen on a show to support six “experts.” We wondered, how many people across the US would be watching at 9AM Central Time on a Saturday? We wondered, did the six “experts” out number their entire audience?

After a commercial break, the panel shrunk to a mere four. Those four discussed the merits and opportunities for the crowded field of 21 Democratic presidential nominee hopefuls. There isn’t near enough oxygen for all in a race of 21 is there? The four discussed how Senator and announced candidate Amy Klobuchar had performed on rival Fox News’ town hall last week. Would you know Senator Amy if she was on a treadmill next to you? Qunnipac polling shows Amy trailing nearly everyone except Michael Dukakis. Oops, he’s not running is he? We think he tanked in his race a while back. She’s polling at 1.3%. One point three percent. And four panelists wondered how she did. You need a lot of O2 to keep a 24/7 newsroom humming all day when CO2 fills the air.

When Joe Biden entered the race a lot of “want to be’s” started gasping for air, too. Biden’s playing ping pong. How far to the left will he need to serve to gather all of the minions necessary to give The Donald a good go? Well, last week he decided to tell America that Trump was making a mistake in this trade war dance with China. This came just a week after he seemed to express the opposite.

“China is going to eat our lunch? Come on, man!” Biden exclaimed at the time. “The fact that they have this great division between the China Sea and the mountains in the East — I mean in the West. They can’t figure out how they’re going to deal with the corruption that exists within the system. They’re not bad folks, folks. But guess what, they’re not competition for us.” East, west? Tomatoe, tomato? Next thing you know the Germans will be blamed for bombing Pearl Harbor.

The campaign trail is long and the job is tough. Ask Hillary. “Sleepy” Joe, as at least one has called him, might need some O2 along the way himself.

Meanwhile it seems like President Trump feels the fresh air. With one huge post Russian Collusion exhale he seems invigorated. In his ping pong match he just took five serves from every angle the Democrats could slap at him. Now, it’s his turn to serve. We think that he thinks that Biden is his only competition worth worrying about. Trump also knows that China is good at ping pong too. Actually they are very good at it. Yesterday, they volleyed back with a few tariffs of their own. The stock market was watching the match from Wall St. They don’t like long unpredictable matches. Trump doesn’t like what Wall St. doesn’t like.

The farmers and others in the mid west are watching too. They played a huge (yuge) roll in Trump’s 2016 election. China’s tariffs are aimed strategically right at them. Trump quickly announced yesterday that some of the tariffs that the US is collecting from China will go directly to the farmers in these tough times. It’s never to early to pump some oxygen into the rust belt.

It seemed like a good time to take a deep breath and go for a run.

2020 is so far away, yet so near.

Send in the Clowns!

Posted on May 9, 2019May 9, 2019 by thependulumswings staff

Summer is usually when Hollywood releases their blockbuster movies. You would not have known that yesterday. The storylines spanned sports, life, and politics. The drama was intense and the acting was on cue. Lights, camera, and….. action!

In sports, the Boston Celtics portrayed the Washington Generals in scene one. The Celtics acted like they were trying, but knew they were going to lose to the ~~Harlem Globetrotters~~ Milwaukee Bucks. They did by a smooth 25 points. The Washington DC based MLB Washington Nationals wanted in. They did their best to mimic the Generals giving up six runs in the first two innings, never challenging, and losing 7-2 to the Milwaukee Brewers. It was show time for both Milwaukee teams.

Washington DC itself then took the stage. House Judiciary Chairman Jerrold Nadler, D-N.Y., declared a “constitutional crisis” on Wednesday after his committee voted to hold AG William Barr in contempt for defying a subpoena for Robert Mueller’s unredacted Russia report and documents.

“We’ve talked for a long time about approaching a constitutional crisis. We are now in it,” Nadler told the press on Wednesday. He indicated that the United States was at a critical time of testing whether it could stay a republic or transition into a tyrannical form government. Dramatic indeed. Rep. Sheila Jackson Lee stood stage left (appropriately) of Nadler as he spoke. She nodded her head (appropriately) after each sentence. The puppet strings from above were barely visible. Later on MSNBC she reiterated that these contemptible White House acts were going to lead to a “Saturday Night Massacre.” Perhaps Rep. SheJack can open for SNL soon. “Live from New York, It’s Saturday Night Massacre!”

Just off Broadway the New York Times wanted in the play. They mic dropped a story that showed Donald Trump lost millions of dollars in the late eighties and early nineties in the business world, and showed copies of his somehow acquired tax returns to prove it. This really was a rerun of a remake. But if it sells papers, so be it. Extra, extra!

Fox News “from the left” contributor Juan Williams was live on camera to comment. Fox casts Williams as their own Washington Generals player nightly. He helps keep it fair and balanced don’t you know? But, this time he donned a big plastic red nose and white face clown paint (remember black face paint is very out of style these days) to opine that this proves that The Donald is unfit to lead us economically seeing as he didn’t know how to run a business. Evidently Juan missed the recent TV episodes on the network that feeds him as they reported the lowest unemployment in 49 years, a very healthy stock market, low inflation, and rising wages.

Juan’s clown outfit could come in handy to distract the raging bull when the riding cowboy gets tossed in the mud. That bull, played by none other than President Trump himself, starred in his own road show in Panama City, FL last evening. There he snorted and pawed the ground to the audience’s delight. Trump is no apprentice on the big stage. “You got some real beauties. You have a choice between Sleepy Joe and Crazy Bernie,” he said. The crowd roared. “And Beto, he’s falling like a rock.” “I’ll take any of them, let’s just pick somebody please and start this thing.” The lead actor cares not who his cowboy rider is. He’s ready to toss him or her. Once the rider is on the ground send in Juan the clown to distract him. But, when President Trump acts there are no cliffhanger endings. Give him a chance and he will (Al) gore you.

We cannot wait for more hits this summer. Meanwhile, Oscar nominations for all. Bravo, bravo!

Headline Advance But Disappointing Close

Posted on May 8, 2019 by Jim Carlton

Independent Investment Management designed to protect and grow your wealth.

Friends

As we mentioned after yesterday’s market dip, we are on
headline watch and that a simple tweet can move stocks in either direction.
Well, this morning we got the “Chinese want to make a deal” tweet from the President
and stocks quickly moved into positive territory. As further comments from the
White House seemed to confirm that talks were back on for later this week,
stocks moved comfortably into positive territory. But, the enthusiasm waned and
stocks drifted lower into a disappointing close.

For the day, the Dow Jones Industrial Average was up 2
points to close at 25,967. The S&P 500 was down 4 points to finish the day
at 2,879. Gold was down $4 to trade at $1,281 per ounce, while oil was up $.73
to trade at $62.13 per barrel WTI.

Positive trade headlines have become less and less effective
as more and more doubt creeps into the actual validity of such headlines. On
the other hand, negative headlines about the Chinese trade situation sends
ripples of fear through the markets and stocks seem much more susceptible to
such headlines. Before doubt was introduced into the trade proceedings this
week, it appeared that the stock market was in a position to actually melt up
given the comfortable environment for stocks (employment, inflation, GDP,
earnings and tailwinds), but now it feels like the downside to a lack of a
trade deal is considerably higher than the upside of achieving a trade deal. In
other words, the risk/reward equation appears to have changed this week. Stay
tuned.

Have a nice evening everyone.

Jim

10200 Grogan’s Mill Road, Suite 340
The Woodlands, TX 77380
(281) 298-2700 Phone
(877) 824-4299 Toll Free
(281) 298-2760 Fax

[email protected] www.chjwealthmanagement.com

Investment Advisory offered through Carlton, Hofferkamp & Jenks Wealth Management, LLC (“CHJ”).

CHJ Wealth Management,
10200 Grogan’s Mill Road,
Suite 340
The Woodlands, TX 77380

And Justice For All

Posted on May 1, 2019 by thependulumswings staff

Rod Rosenstein(RR) resigned yesterday effective May 11, 2019. RR went to the White House Monday and personally delivered his resignation letter face to face with the President, according to an administration official and a Justice Department official. It was only fitting that he do that since in his short stint as Deputy Attorney General he often went toe to toe with President Trump.

On Monday, Rosenstein wrote in his resignation letter to Trump, “We keep the faith, we follow the rules, and we always put America first.” Sounds like a great idea we suppose.

Regardless of which side of the aisle you prefer it was hard at times to keep the faith in RR because one wondered whether he was following the rules. It’s hard to put America first if you don’t.

President Trump nominated RR to serve as Deputy Attorney General for the United States Department of Justice on February 1, 2017. He was confirmed by the U.S. Senate on April 25, 2017. A quick, but very busy, two years later he’s out.

But, in the span of 24 months RR wrote a letter to Trump recommending James Comey be fired, appointed Robert Mueller as Special Prosecutor in the Russia mess, either did or did not want to wear a wire when talking to Trump, attempted to recruit cabinet members to invoke the 25th amendment to have Trump removed from office, and approved along with AG Robert Barr the findings of the Mueller Investigation. Trump tells us that he sleeps about four hours a night. Our guess is that RR sleeps about four hours a week.

Research shows he is a registered Republican. Trump didn’t get that feeling, wanting on numerous occasions to fire him. Bad idea Trump’s team told him.

Eleven House GOP members filed articles of impeachment against Rosenstein on July 25, 2018, alleging he has stonewalled document requests from Congress and he mishandled the 2016 election investigation. But they backed down for fear of slowing the Kavanaugh Supreme Court approval process. Bad idea other congressmen told them.

He was in the very good graces of the Democrats until RR added his signature to Barr’s that Mueller’s investigation found no Trump Russia collusion and felt like any instances of obstruction of justice failed to rise to the level of criminal activity. Bad conclusion Democrats told him.

So Trump didn’t like him. Congressional Republicans didn’t like him. And, now Congressional Democrats don’t like him. If everyone disagrees with you up there in the swamp maybe you are putting America first?

So Rod Rosenstein went out like he came in-face to face and toe to toe with his biggest of many critics. Maybe justice was served after all.