Mike’s Morning Brief – May 1, 2019

What’s going on in the world…

Market opens higher on this May Day. It’s also Fed Day. The first day of the new month is rallying on Apple’s strength from a less bad Qtr and a massive stock buyback program. More importantly will be the Fed, and how they frame the future of monetary policy. 6 months ago, the Market expected 4 rate hikes in 2019. Now, it’s not a hike but a cut that has been priced in. How things have changed. Before the Non-Farm payroll report on the first Friday of every month comes a job report from ADP. It measures private payrolls. The April ADP report, released this morning, showed 275K private sector jobs added. That is the largest increase since July of last year. The Job Market has been strong for quite some time as unemployment is near historic lows below 4%. On top of this was a 3.2% increase for the US Economy. Can the Fed really cut rates with this backdrop? We shall see. It’s all in the rearview mirror however. What matters most is what lies ahead. Attorney General William Barr will be on Capitol Hill today, and will no doubt receive an explosive welcome in the wake of the controversy surrounding the Mueller report and his handling of it. Interest rates are ticking slightly lower in early trading. The 10-Year Treasury is trying to hold 2.5%. Crude is flat, as is Gold. Both seem to be tracking the Dollar this morning, which is flat as well. With a 17% surge to start the year, it’s inevitable we will start hearing the call for Sell in May, and Go away. Perhaps. It’s been the best four-month start to a year since at least 1999. Like a submerged beachball, this Market just has not wanted to stay down.

Have a great morning,

Mike Frazier