Monday – April 29, 2019

Market opens at all-time highs to start the new week. And it’s going to be another busy one. Over 30% of the S&P 500 companies report earnings this week. It will start with Google after the close. The Fed will meet again to discuss the US economy, interest rates and monetary policy going forward. With Q1 GDP coming in at 3.2% growth, the US economy is showing seriously resilience. It sort of flies in the face of the President pushing for rate cuts and more QE. No interest rate hike is expected. Trade talks continue and Treasury Secretary Steve Mnuchin says it’s in the final lap with China. That doesn’t seem to be the case for discussions with Europe and Japan. Disney shattered another record with Avengers bringing in over $1 Billion at the box office this weekend. Disney’s stock has been a rocket ship the last few weeks. Interest rates are ticking higher, ever-so-slightly, but are remaining quite low. It’s because there is no inflation. At least not in the areas where people purchase, like food, gas, medical care and housing… The Stock Market feels very extended here at these new highs, after going straight up in 2019. It’s the complete opposite for which it closed out 2018. But we have learned all too often, overbought tends to last far longer than oversold. Gains always mask underlying problems. When you’re making money, people tend to demonstrate greater tolerance. When you are losing money, not so much. Selloffs tend to be quick and can be violent. When it comes to emotion, fear is much stronger than greed. The set up for lower is still there. It’s just a question of when. Patience is always tested in this business.

Have a great morning,

Mike Frazier

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