Mike’s Morning Brief – March 21, 2018

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What’s going on in the world…

Market opens flattish ahead of the first Fed meeting statement under the Powell regime. A 25 bp rate hike is expected. What he says about the rest of the year will be watched very closely for signs and direction. Interest rates are ticking higher ahead of the meeting. The 10-Year Treasury yield is back above 2.9%. Meanwhile, Facebook can’t escape the headlines around this Cambridge Analytica privacy breach. It has taken FB down and a lot of Tech with it. Management has been stone silent, which exacerbates the problem. The NAS has performed the worst this week after hitting fresh, new highs on the oversold bounce, something the DOW and S&P did not. Tech was way overbought. More downside is likely. The DOW is at the breakeven point on the year as I type. The gains for 2018 have been erased again. The DOW doesn’t really matter though. The S&P is still up 1.5% on the year for now. The correction continues. Congress needs to get a funding deal done ahead of the Friday deadline to avoid a 3rd government shutdown. It’s just completely ridiculous that Washington operates this way. M&A continues as SalesForce is reportedly buying software company MuleSoft. Crude has been sleepy strong this week, with WTI back above $64 in early trading. Energy stocks have responded a bit with leadership. Is this a new and sustainable trend? We are studying it closely. The first day of Spring came yesterday, but you wouldn’t know it looking out the window on either coasts. Torrential rain along the Pacific and another Nor’easter along the Atlantic, has late March more like early February. Flights were canceled across the country.

Have a great morning,

Mike Frazier

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