Mike’s Morning Brief – November 14, 2018

What’s going on in the world…

Market opens higher, trying to catch a bid as stocks continue corrective price action. Oil has been a big story, with a 20% decline in 12 days time. That is a record. The price of Oil has never before fallen 12 straight days, until now. It’s happening in a curious time as Iranian sanctions have been pressed and tensions around Saudi Arabian leadership and the Khashoggi murder. The Saudis said they will cut oil production to help stabilize pricing. Russia did not make that agreement. The US keeps producing at record levels. But the big issue perhaps is the slowing of demand. The global economy is cooling. China, Germany and Japan all reported contracting economic data for October. Is this a sign that recession is on the horizon? It’s an indicator. We are exploring further. Tech has been clobbered of late. Apple has been leading lower with concerns about muted demand for its new iPhones. The Street has been downgrading the stock. The Street is generally late to the party. There is a deal on Brexit. At least there’s a draft. It’s a major development. But it is far from complete. Germany is experiencing an economic contraction. That’s not good from the growth engine of the European economy. The IMF chief acknowledged future role for digital currencies. Oil is finally catching a bid. The Dollar is slightly weaker. Gold is flat. There is a lot of green on the screen this morning. We shall see how long it lasts. Things got extremely oversold in October, then near-term overbought the first week of November. The correction is doing its job but has created a lot of damage in its wake. It’s not yet over. Our defensive positioning will change to offense, and likely soon. Hold tight.

Have a great morning,

Mike Frazier

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