Key Price Points And Data

The S&P500 is sitting right at and testing its 50-day moving average.  We think it’s important you have the key levels and market context.  Note the Nasdaq has fallen back through its old high.

Here you go:

 

Recovery_Values

Price Action_Mar14

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JFK-Trump Analog: 3 bps On The Eve Of A Big Rollover

You need to sit down for this one.

The JFK-Trump S&P500 analog is only three bps apart on Day 338 after election day.  That is only a one S&P500 point difference, folks.  Absolutely stunning.

We had almost given up on the analog after the Goldilocks wage and employment data last Friday.

The two S&P indices have been tighter only twice, on Day 38 and Day 320.

The Night Before The Big Roll

Today is significant in that it is Day 338, which marked the eve of the big rollover of the S&P500 in 1962.

Current headlines also look similar to those in 1962.  Inflationary pressures leading to a growth scare.   Big steel and nuclear missiles in the spotlight.

Other factors are at play today, including politics, especially after last night’s Democratic win in Deep Red Steel Country.

Then there’s today appointment of Larry Kudlow as head of the N.E.C. to replace Gary Cohn.  Kudlow uses the JFK economic model as a template for economic policy in his latest book, JFK and the Reagan Revolution.   Oddly,  JFK never had the chance to cut marginal taxes.

See here for background on the analog.

Right Here, Right Now

It is now make or break time for the analog.

If it is a true tracker, the S&P500 should rollover hard in the next week or two.

Stay tuned.

 

JFK-Trump_Mar14

 

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Quote of the Night: Will Rodgers

If a gun toting, former U.S. Marine,  law and order,  pro-life Democrat wins a seat in Congress, maybe the party leadership has finally learned that all politics is local and the tent needs to expand.   Probably, the biggest take away from tonight’s election and powerful counter to the Trump Republican Party, where the tent is shrinking.

Will Rodgers_Mar13

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The Big Blue Wave Looms

Is that Conor Lamb on his Hobie?   By the way,  he will be one of only six millennials in the U.S. Congress.  Fresh.

Results of Pennsylvania 18th Special Congressional Election 

Not definitive yet and much, much tighter than we thought.  It’s very difficult to model the voter in Appalachia who is a first-time or occasional voter.   In fact, we heard today the Pennsylvania government was flooded with calls from voters across the state asking where their precinct was.   They had to be informed the election was not state-wide and only in one small Congressional district.

Pen18th_Mar13_2

As of midnight,  Lamb has a small lead of around 579 votes with about 1,398 absentee votes still to be counted.  If our data and math are correct, to make up the 579 votes, Saccone would have to win the outstanding absentee vote by about 42 points, or 71 percent to 39 percent.

Very unlikely,  He didn’t win more than 60 percent of vote any of the the four counties.

It will smell very fishy if Lamb loses the final vote tally.

Big Win For Blue In Deep Red

The fact that a Democrat wins in Appalachia is stunning.  Moreover, steel tariffs were just announced,  Trump won the district by 20 points in 2016,  the economy is, supposedly, doing great and the stock market is close to an all-time high, should make a Republican win in Deep Red steel country a slam dunk, no?

Here is the chart from tonight’s elections that will freak out Republicans and White House.

Pen18th_Mar13

The voters of Pennsylvania have spoken.

Though we are a still divided nation, maybe the Quaker State spoke tonight and desire to Make America Decent Again.  #MADA

See ya’ in November.

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Pas de merde…

…and wait until they internalize these numbers.

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Country Trade Balances With U.S.

851A6B61-F89D-4537-85AD-A8808C30ED42

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Watch This Space…

Today’s special congressional election in Pennsylvania’s 18th could move markets, and we doubt it is central to traders radars.  Trump won this district by over 20 percent in 2016.

The Democrat, Conor Lamb,  has pulled ahead in the latest poll and owns the momo on his side.   The prediction markets are giving him a 65 percent probability of winning.

We sense a potential blow out, and markets could then begin to worry about a “Giant Blue Wave” coming in November ergo impeachment and corruption hearings in the next Congress, and the end of the Trump agenda.

It should be priced but nothing ever is in a momentum market.

PredicitIt_Mar12

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10 Reasons Why The U.S. Can’t Be Nordic – NR

The debate begins and the right pushes back in this article.  We were out there first not with a normative argument but with positive analysis on what we see coming.  See here, herehere, and here.

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Major Stock Index Recovery Percentages

Recovery_Values

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Global_Recovery_Values

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QOTD: Pension Refunding

Given the average life of a pension is about 15 years, every 100 basis point increase in interest rates reduces the net present value of pension liabilities by some 10%, writes Fundstrat’s Thomas Lee. If ten-year Treasuries can reach a 4% yield by the end of 2019, the pension funding ratio could therefore rise to 85%, up from 83% last year.  – Barron’s, March 12

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