THE WEEKLY TOP 10
Table of Contents:
1) New uncertainties surrounding a July rate cut, but that will be resolved next week.
1a) The recent rally has not been fueled by economic or earnings growth…nor by an impending trade deal.
1b) Who has the upper hand in the trade war? Look at Huawei vs. U.S. Ag products going forward.
2) History shows that equating “rate cuts” with “QE programs” is a mistake.
2a & 2b) “Don’t fight the Fed” is only a good rule to follow…well after the initial rate cut.
3) “QE programs” & “rate cuts” have two different targets; thus the timing of their impact is much different.
4) The Chip stocks gave back virtually all of Monday’s gap-opening gains by Friday.
5 & 5a) The S&P 500 is at a critical technical juncture. Further upside follow-through will be quite bullish.
6) TSLA…Strong bounce off of $180. It now has to break $250 to give it another leg higher.
6a) Ford Motor still has a lot of potential. A meaningful break above $10.50 will be very bullish.
7) The U.S. economy is the strongest in the world…but it IS still weakening!
8) Great call on the infrastructure stocks. Take some profits & raise sell-stops.
9) A simple fact: Full-year earnings estimates for the S&P are falling towards zero.
10) Summary of our current stance.
1) Friday’s strong employment report raised some uncertainties about how aggressive the Fed’s will be in their upcoming easing policy. Luckily, a lot of that uncertainty should be resolved by Chairman Powell’s testimony to Congress mid-week next week. Since we have long believed that the Fed is more “market dependent” than they let-on…and the fact the market is at record highs, I believe the Fed will signal that they won’t be as ...