Google Tonight, Apple Tomorrow

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Friends

It’s a big earnings week with Google (Alphabet) announcing
their earnings after the close today and Apple after the close tomorrow. Google
shares posting new all-time highs today would seem to be in a precarious
position going into the release, while Apple has also had quite an advance so
far in 2019. It will be interesting to see if those stocks are fully pricing in
good news, or can the companies exceed expectations enough to actually push
shares higher?

As for today, things were mainly quiet, and by the close the
Dow Jones Industrial Average was up 10 points to finish the day at 26,554. The
S&P 500 was up 3 points to close at 2,943. Gold was down $6 to trade at
$1,282 per ounce, while oil was up $.32 to trade at $63.62 per barrel WTI.

Earnings are front and center at the moment, just at the
moment stocks are touching all-time new highs. A bit of a high bar for
Corporate America to clear just when things were supposed to be getting more
difficult for them. Should be an interesting week. Stay tuned.

Jim

Jim

GDP Surprises

Independent Investment Management designed to protect and grow your wealth.

Friends

At first blush, our first look at 1st quarter GDP
was a bit of an eye opener. The economy grew at 3.2% in the 1st
quarter which was quite a bit better than the 2.5% that analysts were expecting.
But, after further analysis the bears among us noticed that a good portion of
the growth was due to inventory build and that underlying demand had weakened.
Remember the days when a good number was just, well, a good number? Bond market
participants immediately went with the more cynical view as bond prices rose,
while yields fell. But, stocks had a relatively good day. Moderate growth with
low interest rates and no inflation has been just fine for stock investors for
quite some time.

Anyway, by the close, the Dow Jones Industrial Average was
up 81 points to finish the day at 26,543. The S&P 500 was up 13 points to
close at 2,939. Gold was up $8 to trade at $1,288 per ounce, while oil was down
$2.32 to trade at $62.89 per barrel WTI.

On the earnings front, Intel, Chevron and Exxon Mobil
disappointed, while Amazon did its thing and delivered solid results. As busy
as this week was, next week is the busiest week on the earnings calendar. We’ll
see reports from Alphabet (Google), Apple, GM, McDonalds, Conoco Phillips,
Merck, Pfizer, Kellogg, DowDupont and hundreds more. As we have seen the
earnings reports and the subsequent share price reactions have been very mixed.
My overall impression so far is that earnings are probably a little better than
we expected, but share prices were already reflecting that, with the advance we
have seen since the beginning of the year. Also noteworthy is that companies
are still providing very cautious guidance going forward, and that too has been
a bit of a headwind for stocks over that past couple of weeks. All in all,
though, here we are at all-time highs. As I said, stocks don’t mind a slow
growth, low inflation, and low interest rate environment. We’ll let you know
how next week’s busy earnings schedule plays out.

Have a great weekend everyone.

Jim

Just a Bit Inside!

Last evening Philadelphia Phillie Rhys Hoskins homered off of NY Mets reliever Jacob Rhame in a 6-0 win.  This came just one day after Rhame buzzed two consecutive fastballs just above Hoskin’s cranium in the meaningless ninth inning of Mets 9-0 blowout.  Hoskins basked in the moment, taking a very long 34 seconds to touch all of the bases.

Joe Biden hopes he hit a home run too.  Just one day after he was supposed to release his presidential campaign announcement video he did.  His video is a good bit longer than 34 seconds(209 to be exact) and he doesn’t touch all of the bases.  Rather it appeals directly to his base.  It buzzes a fastball or two right at the cranium of President Donald Trump.

And so the race to rally the base is on.  In the very first inning of Biden’s video he remembers the conflict (and tragic death of one innocent bystander) between far right-wing groups and anti protesters in August of 2017 in Charlottesville, VA.  He calls out Trump’s comments that there were “a lot of good people on both sides there.”  So the race for 2020 among 20 Democrat hopefuls is joined.  Biden wasted no time telling us that Trump was bad.

Old school baseball at its finest, or at its worst if you prefer, was on display in NY.  “He got me,” Rhame said. “Make a better pitch, he doesn’t get to run the bases.”  Added Mets manager Mickey Callaway: “I really don’t have any thoughts on it. That’s their team. They can do what they wanna do.”  “If a ball goes over your head the night before, the best way to get back at the pitcher is by putting the ball in the seats,” Phillies manager Gabe Kapler said.  Unapologetic it was. Old school it is.

So too is Joe Biden.  Old school politician he is.  The last time he had to raise funds he shook many a hand and hugged and hugged and hugged many a lady.  Today, the world-wide web is your fundraising friend.  Obama’s campaigners ran breathlessly to Beto’s camp. What a breath of fresh air this Beto guy is they said.  He reminds us of a certain guy named Barrack in 2008 they said.   O’Rourke is 47.  Joe turns 77 this year.  He’s old enough to be his crazy uncle.  He could be related, but can he relate?

But Joe is apologetic.  A month or so ago he apologized to all women, saying about the Anita Hill testimony during the Clarence Thomas Supreme Court nominee hearings ” I wish I could have done something.”  “To this day I regret I couldn’t come up with a way to get her the kind of hearing she deserved, given the courage she showed by reaching out to us.”  Joe forgot, or forgot to tell us, that he was the Chairman of the Senate Judiciary Committee that ran the hearings then.  And just a couple of weeks ago he apologized for hanging on too long during all of those uplifting hugs.  He said “I will be more respectful of people’s personal space.”  He even noted that today is more about taking selfies.

Hoskins said that the slow homerun jog wasn’t about retaliation. “A couple of guys kind of said the phrase, ‘Don’t poke the sleeping bear,”‘ he said.  And with that baseball continues to slog on with some of yesterday’s traditions.  Perhaps far too comfortable insiders are still running the show.

Today Biden can take a 209 second video trot around the diamond. The 24 hour news cycle will provide the stadium.   Tomorrow he should expect two fastballs high and tight.  Eventually he will have to stop apologizing for his past.  Eventually he will have to stop telling us who Trump is.  Eventually he will have to tell us who he is, won’t he?

Or, he just pokes the bear that President Trump is.  And The Donald never sleeps.

 

 

 

Wash. Rinse. Repeat.

With 5G technology and artificial intelligence on our doorsteps we will very soon be able to see, hear, and do things better and faster than ever before.  So what will America prioritize to see, hear, and do better than ever?

While that conversation, driven by capitalism, evolves in boardrooms and meeting rooms the world over, Wall St. has certainly has bought in.  A record-setting day yesterday had most indices closing at new all time highs.  This writer took a Uber ride Friday night and the driver was eager to give us stock tips.  A good stock tip might be “when Uber drivers give stock tips it’s time to sell stocks.”

Regardless, Main St. seems to have bought in too.  Employment is at all time highs too.  Inflation is low.  Interest rates are tame.

All is well, eh?  Well.  Maybe not.  A quick trip around the newsrooms in the last 24 hours shows us just how bad life really is apparently.

Brick and mortar is dead.  Brick and mortar is dead.  Maybe not.  Kohl’s Department Stores announced yesterday that they are expanding their agreement with Amazon to increase the number of their retail stores from 100 to all 1100 to accept Amazon returns.   Traditional stores teaming up with fierce internet competitors that were going to drive them out of business sounds crazy. It’s about foot traffic, always.  Both stocks rose sharply.  Bernie Sanders called Amazon criminal the other evening in a town hall.  It turns out that they very legally pay less taxes than Bernie wants them to.  Sounds like they help employ a few folks that do pay taxes.  “Crazy Bernie” someone calls him.  We’ll be back after this commercial break.

California wants to eliminate those tiny plastic shampoo bottles that hotels provide.  Turns out that they are being found in the oceans at an increasing and alarming rate they say.  First it was those plastic rings around so many six packs of cola strangling all of the seals.  Once eradicated, the plastic straws that you drank the cola with started floating in the seas.  What could be next?  Could it be all of the plastic syringes lying in the streets that were handed out to drug users up the coast to insure clean needles for all?  More after these commercial words.

A few of the now 20 and counting announced Democrats for president have endorsed giving voter rights to either all Americans 16 and over, or all people living in this country, or all people living in this country that are incarcerated, or all three of the above.  We wonder if the cry for sixteen year olds to vote coincides with them being 18 and of legal age to vote come 2020?  First come, first served.  We wonder when it became a right of a non US citizen to vote, period?  See if you can vote in the country of your choice the next time you travel abroad.  We wonder if the plan is to bring the polling booths to the prisons, or to bring the prisoners to the polling booths?  We’re up against a hard break.  Back in two minutes.

We are back.   Elizabeth Warren one upped Bernie Sanders’ free tuition giveaway.  She wants free college too, but first wants to forgive 50k of student debt per individual that had to pay.  Meanwhile, Maxine Waters, Chairperson of the House Finance Committee, wants to know what the big banks are going to do help these million or so yearly student loan defaults.  She “grilled” several bank CEO’s  two weeks back asking what they were going to do about this crisis.  After the third CEO in a row reminded her that the government took over the loan program from these greedy bankers in 2009, she relented.  Awkward.  To summarize, the debt isn’t being repaid.  Warren wants to forgive and forget about it anyway.  It’s our government that is running the loan program even though the Finance Chairperson doesn’t know it.  Lets just make college free.  Banks are bad.  We’ll be back with some final words right after this important message from our sponsors.

We wind down our 5G broadcast to you tonight on a lighter note with a look at this brief video of the latest advances in robotic programming.  Wow.  Artificial intelligence is creepy.

And, just before we close we have breaking news.  It is confirmed that Joe Biden, who has been bidding his time, will announce tomorrow that he is entering the crowded Democratic field of announced candidates for president in 2020.   Wow.  How ironic is it that we mentioned Biden, artificial intelligence, and creepy all at the same time?

Thank you for watching.  Good day.

Ya Gotta Believe!

Back when the 1973 New York Mets, aka “The Amazins,”  were making their very improbable run all the way to the World Series, team member Tug McGraw coined a phrase.    It was “Ya Gotta Believe.”  And believe the Mets did, going from last place in their division on a very late in the season August 30th all the way to a 4 games to 3 World Series loss to the Oakland A’s.  Tug’s tug on his teammates passion to unite behind a cause was a winning formula.

So too it is in politics.  Tell people something enough and eventually they will accept it as the truth and a way of life and unite behind a cause.  Just a few months back, and several hundred billions less in debt, the US Senate held a hearing to either approve or reject Judge Brett Kavanaugh to the US Supreme Court.  Quickly Christine Blasey Ford became the centerpiece of the effort to block his confirmation.  She claimed a then teen Kavanaugh about 30 odd years ago  attempted to rape her at a party.  Where?  She didn’t know where.  When? She didn’t know when.  Her friend that she said was with her at the party said she wasn’t.

It mattered not.  You gotta believe her some said.  Kamala Harris, Democratic Senator on the Confirmation Committee said she did. She is now a candidate for President.  Others did too.   Hawaii Senator Hirono went so far as to state that Ford needed to believed, she believed Ford, and that men needed to shut up.  This was before the testimony to reveal any credible evidence.  You know, everyone is guilty if they are on the wrong side of the argument until proven innocent.  When the hearings concluded, the unconvinced of guilt lefties felt like yet another “victim,” who just came forward, needed to be heard.  She was represented by the honorable, but now indicted for attempted bribery of nike, Michael Avenatti.  Nothing credible came of that either.   Shocker.  Another delay.

Eventually Kavanaugh was confirmed.  But, that was only after the delay and the narrative could be heard and heard and heard.  After all, what better free advertising for the party attempting to regain control of both houses in 2018?

Enter the Trump Collusion Mueller Investigation.  Enter Adam Schiff, Chair of the House Intelligence Committee (House and the word Intelligence together, like politicians, make strange bedfellows).  Pencil Neck, as someone calls him, claims to have evidence that Trump colluded with the Russians.  Twenty-three months of Mueller, his cadre of lawyers, investigators, over 500 subpoenas and over one million pages of info requests of Trump’s team later, we have the Attorney General Robert Barr echoing Mueller that there was no collusion.  And, Mueller stated no legal reason to think Trump obstructed justice.  Barr said, too, that it fails to meet the legal bar for it.

Harry Reid said that he had evidence that Mitt Romney cheated on his income taxes.  Give em hell Harry.  No evidence yet.  None ever coming.

“We need Mueller to testify before the Oversight Committee,” comes the cry.  “Surely there is more to this,” comes the cry.  “What’ll we do with all of these pitchforks and lanterns,” comes the cry.

We now have government officials asking for government officials to interview under oath a government appointed special prosecutor who investigated the executive branch of our government for two years and came to no legal wrongdoings.  Ya Gotta Believe says Adam and others.  Adam, show us your evidence.  It was your civic duty, not political hay to make, 23 months ago.

Don’t let the facts get in the way of a good narrative it seems. Oh, and if we can keep this up till, say, 2020, we can use this cloud hanging over Trump to beat Trump, can’t we?

Seems like one party would rather try to win running on what the other party did wrong (ya gotta believe) rather than what that party did itself right.  Right?  Wrong?  The American citizens lose either way.

 

Come On In, The Water Is Fine

A whole flock of small rubber ducks just hit the river.  And, with it, the great race for 2020 has begun.  If you are watching it on TV it’s abundantly clear that the race downriver is from right to left.

The flapping, quacking, and invisible web-footed paddling is robust.  It’s about 20 such newbies or not so newbies all looking for the right current to power their way to the front.  What’s first prize?  It’s power in the race that wins the power out of the race.

There is but one problem.  By far the biggest and loudest quacker is, for now out front.

The biggest duck is none other than, ahem, Donald Duck.  As we breathlessly wait for the now neutered Mueller Report (less than 24 hours away) The Donald is swimming in fresher, clearer, and not so deep nor hot water.  Every opponent will have a staff member read the report and be able to find the worst moment and whale away.  This will last about 24 hours.  Then, reality will set in.  While they have had their scope sighted on the biggest duck for two years, they’ve shot blanks thus far.

So, then, what now a mere 17 months from the election?  Well, the swim to the hard left seems to be the rip tide of choice.  Remember a short three months ago when Alexandria Ocasio-Cortez jumped in with the Green New Deal.  It seemed like a swimmingly good far left idea at the time.  Quickly, it’s been overtaken by paddling of cute orange feet even further to the left.

Good old Bernie Sanders, he of a few feathers missing on his crown, has one upped his desire for free college tuition with a proposed 52% tax take on the income rich.  When asked in a Monday night town hall if he and his $562k income of a year ago were ready to ante up, he went dead left and talked about Google and Apple, and other capitalistic successes not paying any taxes.  And, he called it criminal.  Silly us, we thought “criminal” was doing something against the law.  He said nada, or not a thing, about his willingness to go along with his own proposal.

The newest duckling, Mayor of South Bend, Indiana, Pete Buttigieg, told MSNBC’s Rachael Maddow last evening that this Electoral College thing, written into the Constitution by our founding fathers, was so yesterday.  And with that he shook his tail feathers and motored past the previous left.  He said, we paraphrase, that it no longer represents the true will of the United States.  We wonder how his friends and family from the great state of Indiana feel about his desire to minimize their voice?

And from the left coast, Northern California Congressman and now announced candidate as well, Eric Stalwell quacked loudest of all.  He declared that when elected he would push legislation to make all assault type rifles illegal.  He then swam into the deep, deep left side of the river by stating that if anyone refused to surrender their guns, they would be convicted of a crime and sent to prison.  To recap, he wants to make a legal part of the Second Amendment illegal and take away legally owned guns.  And, then he wants to convict those certain gun owners who won’t surrender them of illegal possession.  He suggested that other rifles and such only be stored in gun clubs, shooting ranges, and hunting clubs.   There is a duck hunting joke in here somewhere.

Our guess is that Joe Biden, who someone labeled as Creepy Uncle Joe, is waiting at a turn in the riverbank.  He is busy making sure his feathers can repel any water that his past might have taken on.   If he (when he) waddled in, the river’s course splinters.  With somewhat limited tact, he might find a different tack to the finish line.

With so many baby ducklings in the river, fresh air (time) and space (on the stage) to maneuver is tight.  The 17 month race is on. Soon enough Mother Nature will take its course and the flock will lose members.

And the mother of all ducks for now, Donald, will vigorously attempt to pluck what’s left (did you see what we just did?).

Meanwhile the race is on and the quacking is incessant.

 

 

A Mixed Bag

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Friends

Today’s earnings releases produced a mixed bag of share
price reactions. Johnson & Johnson had a very nice earnings beat and for
the most part the stock reacted positively. United Healthcare had what looked like
a nice earnings scorecard but the shares, after rallying initially, spent the
day down significantly. Bank of America had a nice earnings beat, but one buoyed
by cost efficiency more than revenue growth. Nevertheless, the shares fell
early but recovered to end the day mainly unchanged. As I said, a very mixed
bag of results, and not all that surprising given the market action so far this
year.

As for stocks in general, for the day the Dow Jones
Industrial Average was up 67 points to close at 26,452. The S&P 500 was up
1 point to finish the day at 2,907. Gold was down $12 to trade at $1,279 per
ounce, while oil was up $.73 to trade at $64.13 per barrel WTI.

The earnings parade continues after the close, and over the
next 2 days, before we break for the holiday weekend on Friday. In the meantime
we’ll monitor the results and how the companies’ shares react in price. As seen
today, there is a lot of nuance with these earnings releases, and so much of
the stock price action is predicated on what type of move the shares have
experienced going into this earnings season. Stay tuned.

Have a nice evening everyone.

Jim

Fed Minutes

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Friends

Market participants waited breathlessly for the Fed Minutes
today (not really), as stocks just drifted aimlessly until the release. Not
much changed after the release as stocks tilted quietly to the upside until the
close of the session. Basically, the Fed minutes indicated that most of the Fed
officials don’t see a likelihood that rates would need to be raised for the
rest of the year, but they did not rule it out completely. On the other hand,
contrary to recent market belief, the Fed officials did not indicate that any
rate cuts were likely for 2019. Of course, the Fed remains data dependent.

As for stocks, by the close the Dow Jones Industrial Average
was up 6 points to finish the day at 26,157. The S&P 500 was up 10 points
to close at 2,888. Gold was up $4 to trade at $1,312 per ounce, while oil was
up $.50 to trade at $64.48 per barrel WTI.

As recently mentioned, a few big banks kick off earnings
season on Friday as JP Morgan Chase and Wells Fargo get things started. Then,
next week we get releases from the likes of Goldman Sachs, Citi, Bank of
America, United Health, Pepsico, Morgan Stanley, American Express,
Schlumberger, Honeywell, Travelers, and Union Pacific just to mention a few.
Earnings season is going to be very interesting and very important. Stay tuned.

Have a nice evening everyone.

Jim

Goldilocks Jobs Number

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Friends

The jobs number was a little better than expected with
196,000 new jobs created in March, but not so strong as to cause concern among
market participants that the Fed might be tempted to rethink their dovish stance.
The unemployment rate remained at 3.8%, while average hourly earnings creeped
slightly higher and sits at a 3.2% gain year over year. The data was strong
enough to calm recession/slowdown fears, yet not too strong to stir inflation
fears (and Fed hawkishness).

Stocks reacted in a positive fashion with the Dow Jones
Industrial Average up 40 points for the day to close at 26,425. The S&P 500
was up 13 points to finish the day at 2,892. Gold was up $1 to trade at $1,296
per ounce, while oil was up $1.21 to trade at $63.31 per barrel WTI.

The economy appears to be in decent shape, the Fed is in a
dovish mood, and stocks are closing in on all-time highs. Quite a setup as we
head into earnings season. Stay tuned.

Have a great weekend everyone.

Jim

Down Goes Biden, Down Goes Biden!

Yesterday we offered up our four best runners-up for the top five countdown of Donald Trump’s best (from the right) or worst (from the left) nicknames on his road to, and now, as President of the United States.  In the era of “play nice in the sandbox”  The Donald never shies away from a good jab or a right (saw what we did there?) cross.

Today, below, are our top five in ascending order of punch strength.

5.  Low Energy Jeb Bush– The Republican old guard and its committee for election in 2016 mostly had aligned its effort and huge money behind the brother of one and the son of another former president.  Hey everyone, get excited about another Bush!  The problem was twofold.  One, America was screaming for less of the same and wanted a fresh feel.  Two, Jeb’s a nice guy, but Jeb doesn’t exactly energize.  Then candidate Trump sensed all of the above and labeled him Low Energy Jeb.  Republican’s from near and far collectively agreed that Jeb didn’t exactly light up a room.  Soon, he wasn’t any longer in the room.  It was a Trump TKO.

4.  Pencil Neck Adam Schiff–  The newest nickname is only a week old.  It makes its debut at number 4.  We were quite tempted to place it higher, much higher.  It was the impetus for this post actually.  It’s not higher because of the significance of the remaining three, but like a fine wine (or whine if you are Schiff) it will only gain more character with age.  Schiff, Chair of the Intelligence Committee, has put himself on the front burner as one of Trump’s biggest critics.  When one sticks his (pencil) neck out attacking President Trump one might get burned.  No further explanation is needed.  It’s as if a flyweight stepped into the wrong ring.

3.  Crooked Hillary– As Secretary of State under President Obama, Hillary Rodham Clinton had a small problem with too many phones in hand, and way too many emails erased.  After Trump stumped his way past Lil Marco, Lyin Ted, and Low Energy Jeb, he focused his energy on the highest office in the land.  Clinton’s Bengazi problem and use of personal technology while conducting official and perhaps top-secret US business was under investigation.  Trump decided that she was guilty, naming her Crooked Hillary.   America, almost silently it seemed, had grown tired of the same old, same old Washington mess.  Jeb Bush had no energy and the wrong last name.  Hillary was labeled crooked and had the wrong last name.  Drain the swamp Trump said.  He hit her right on the nose.

2.  Pocahontas- Like Pencil Neck Adam, we were tempted to put this one higher, meaning number one.  It easily could be.  Elizabeth Warren, senior Senator from Massachusetts, claimed many times in her past that she was of Native American heritage.  She did so repeatedly on college entrance applications and law bar applications alike.  Being a minority helps in such pursuits.  As she rose in recognition and importance the lie, exaggeration, or stretch (however you wish to look at it) grew in stature.  Her outspoken opposition of The Donald caused him to drop the name Pocahontas on her.  Politically incorrect, said many.  Racist said many more.  But, now Warren has had to say she was sorry about that more and more.  With a one word nickname Warren, now an announced presidential candidate for 2020, has a handle that she will struggle to shake.  It’s a shot to the body by The Donald that takes the wind away.

1. Rocket Man–  A ripple of shock rolled through Twitter and the global media when President Trump called North Korea’s Kim Jong Un “Rocket Man” on the floor of the United Nations.  How dare he inflame an already very strained relationship with a dictator who sent a few nuclear test missiles over South Korea and Japan?   Heck, we even heard that North Korea’s capability had reached a range that could target the left coast of America.  Undeterred, on a world stage, Trump pressed on.  Perhaps he knows when he has the better cards?  Two years and two summits later Rocket Man has not yet been completely neutered, but the rockets haven’t glared red in a long while.  And, Trump and team continues to press hard for complete disarmament.  Given what was and is at stake on a global stage, this nickname is the knockout.

It’s only a matter of time before Trump recognizes another exposed chin and takes a swing.   The BBR money is on Joe Biden.  With accusers aplenty, Biden might wear himself out before he ever gets into the ring.  Trump is just bidding his time before he jabs.

Say it ain’t so, Joe.