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

Independent Investment Management designed to protect and grow your wealth.

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

Independent Investment Management designed to protect and grow your wealth.

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

Independent Investment Management designed to protect and grow your wealth.

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.

Fast Start For Stocks

Independent Investment Management designed to protect and grow your wealth.

Friends

It was quite a nice start to the second quarter for the bulls as stocks rallied at the open and added to those gains as the trading session wore on. The rally was broad based with financials and industrials joining the party along with technology shares. Staples and other interest rate sensitive shares took a breather today as longer term rates ticked up a bit. All in all, the bulls seem to firmly hold the high ground as we move into the second quarter. Of course, the upcoming earnings season will begin to separate the men from the boys. Though we are going into this earnings season with muted expectations, rising share prices would actually make stocks more vulnerable to inferior earnings releases.

For the day, the Dow Jones Industrial Average was up 329
points to finish the day at 26,258. The S&P 500 was up 32 points to close
at 2,867. Gold was down $5 to trade at $1,293 per ounce, while oil was up $1.50
to trade at $61.64 per barrel WTI.

It is a busy week for economic data including today’s retail
sales number that was not good. Surprisingly, though, January’s lousy number
was revised quite nicely higher. The ISM manufacturing number was actually
pretty good. We’ll see durable goods tomorrow and ADP private payrolls, and ISM
non-manufacturing on Wednesday. Then, on Friday, we get the all-important
non-farm payroll number. Remember, last month’s jobs number was way less than
expected, so this week’s number will be extremely interesting. Early estimates
are for about 177,000 new jobs were created in March. Stay tuned, it’s going to
be a busy week.

Have a nice evening everyone.

Jim

Mr. Magoo and the Haymakers

Emboldened by what he called “total vindication,” President Trump took a victory lap after the knockout to Grand Rapids, MI. and back for one of his feel good pep rallies of his base.  The Mueller Investigation findings, though not yet totally released, proves, he says, what he told us all along.  That is, no Russian Collusion.

Some Democrats, like a dog on a bone, won’t yet let go.  One such bow-wow, from the great state of California, Adam Schiff continued his diatribe into the weekend that he knows Trump is guilty and he has proof.  When he became Chair of the House Intelligence Committee in 2019, Schiff made it his personal mission to investigate Trump’s connections to Russia, separate from the investigation by the Special Counsel.  Schiff came under significant fire when asked if he would accept it if the Special Counsel’s investigation concluded that Donald Trump did not collude with Russia.  He stated that he has great confidence in Mueller but that “there may be, for example, evidence of collusion or conspiracy that is clear and convincing, but not proof beyond a reasonable doubt,” as is needed for a criminal conviction.

So, President Trump, once the star of the hit show The Apprentice, took his show on the road.  No apprentice at assigning nicknames to friend or foe, “The Donald” offered a new one in describing the House Intelligence Chairperson.  It played quite well in Grand Rapids, and we suspect it’ll play quite well in red states coast to coast.  Of course there aren’t many red states on any coast really unless you include the Gulf Coast.

So, since he has such an affinity for nicknames, BBR decided to countdown our thoughts on his best (if you are from the right) or his worst (if you are from the left).  The hit list is the same either way.

Many honorable mentions are possible.  We chose four that follow.

Little Marco – Then candidate Trump went from stage left to center stage after just one Republican debate.  He bullied several believed to be serious candidates right down podium row.  Marco Rubio, of diminutive size, took a shot to his ribs, lost his composure more than once, and never recovered.

Crazy Bernie- Bernie Sanders pushed Hillary Clinton much further left than she wished to gain the Democratic nomination in 2016.  The now Prez relabeled “free college tuition” Bernie as Crazy Bernie.  Bernie’s glasses and uncoiffed grey hair could, given a lab white lab coat, come across as a bit out there to anyone to his right.  And we think many are to his right.

Lyin’ Ted- Ted Cruz stayed above it all for much of the Republican campaigning and debating.  As also ran’s ran out of support or money or both, Ted stayed firmly in the race.  Mr. Trump took exception to a few of Ted’s characterizations of him and labeled him Lyin’ Ted Cruz.  Trump trumped Ted in the debates by pulling out the nickname early and often is his rebuttals of Ted’s shots across the bow.  Ted eventually bowed out.

Mr. Magoo- President Trump appointed Congressman Jeff Sessions as his first Attorney General of the United States.  Alabamian Sessions was an early, avid, and outspoken advocate of candidate Trump.  Trump spoke glowingly of Sessions.  He did at least until Sessions recused himself in the beginning stages of the Russian Investigation that led to the appointment of Special Prosecutor Mueller.    Sessions decided to not participate.  He concluded “I should not be involved in investigating a campaign I had a role in.”  Trump denies that he ever called AG Sessions “Mr. Magoo.” Of course he denies any Stormy relationship that turned stormy for him as well.   We think the nickname is too good for Trump to not take credit.  So, we included it here, authorship be damned.

Remember, President Trump says that he never starts a fight, he just counter punches until he ends one.  Maybe.  But, there is no doubt that he’s a heavyweight champion of nicknames.  The one he put on Schiff is a punch straight to his manhood.

Tomorrow we count down his top five haymakers.

They all hit like Mike Tyson.

 

Stocks Cap Off A Great Quarter


Independent Investment Management designed to protect and grow your wealth.

Friends

After a terrible 4th quarter of 2018 where we saw
that worst December for stocks since the 1930’s, market participants were the
recipient of a stellar 1st quarter of 2019. After the Dow had tumbled
nearly 10 % just in December, highlighted by a 2.35% drop on Christmas Eve
alone, we saw the new year begin with a more than 2% drop on January 3rd.
 Needless to say the psyche of investors was challenged at that point.
But, from that moment on stocks began to recover and over the next three months
we erased Decembers losses. We haven’t yet made it to new highs but at least
some of the bad taste left in the mouths of investors from Q4 2108 has been
washed away.

On this final trading day of the quarter, the Dow Jones
Industrial Average was up 211 points to close at 25,928. The S&P 500 was up
18 points to finish the day at 2,834. Gold was up $1 to trade at $1,296 per
ounce, while oil was up $.91 to trade at $60.21 per barrel WTI.

It was a great 1st quarter for both stocks and
bonds, but as we look into the 2nd quarter of the year we face some
challenges. The yield curve has inverted and economic slowdown appears to be at
hand. We will be entering an interesting earnings season over the next 30 days,
one that comes with lowered expectations and much angst. The Fed is firmly in
the dovish camp now, but that comes with concerns of its own with regards to
the Fed’s views about the economy going forward. But, as we have seen in recent
years TINA might come back in play, where stocks are the only game in town. For
now, let’s enjoy the quarter that is now in the books and be ready to get back
at it next week.

Have a great weekend everyone.

Jim

Additional Fed Dovishness

Independent Investment Management designed to protect and grow your wealth.

Friends

I half expected Fed Chair Powell to conduct his post FOMC press conference from an aircraft carrier donning a fighter jacket, while declaring “mission accomplished”. Indeed, the normalization of monetary policy has apparently been achieved – at least for now. Today, the Fed made it clear that they were done raising rates for the foreseeable future. Now, one could interpret their increased dovishness as concern that the economy is under pressure and is likely to slow as the year progresses. Whatever the case, market participants are left to decipher whether this is good for stocks (remember TINA) or is this a capitulation that spells difficult times ahead for equity investors.

As for today, stocks had been weak before the Fed statement due to President Trump’s China tariff comments, then rallied after the release of the statement, only to weaken once again in the last hour of trading. By the close, the Dow Jones Industrial Average was down 141 points to finish the day at 25,745. The S&P 500 was down 8 points to close at 2,824. Gold was up $7 to trade at $1,314 per ounce, while oil was up $1.09 to trade at $60.12 per barrel WTI. Bonds may have been the bigger story today with the 10 year Treasury note yield falling to 2.53%. Remember, the 3 month yield is 2.46%, so the yield curve is virtually flat, and getting flatter.

Another disappointing earnings report from Federal Express yesterday may be confirming a global slowdown, which would support the Fed’s more dovish stance. Anyway, the market now has the Fed firmly in a dovish stance which likely removes that headwind for stocks for some time. But, did the Fed flash an economic warning sign that would become a different headwind for stocks? Hmm.

Have a nice evening everyone.

Jim