Market Briefing For Monday, March 18

A bias for 'charging Bulls'  into Quarterly Expiration was delivered; while interesting data surfaces showing the 'cowering' investors (amazing selling in November and December into the hole; and continuing even thru January and February) .. the cowering investors (fund managers?) finally capitulated to the 'buy-side', trying to 'corral' some sort of performance for the year.  

So, we got higher highs looked for this week into Expiration; but while there is an appearance (led by Nasdaq) of a market moving into higher ground, as I suspect it will; we should allow some cooling-off, perhaps ahead of the upcoming FOMC Meeting; then a resumption. Volume dried up on this rally, which often is a harbinger of either concern or a brief pause coming-up.    

 

Aside plays on words, and the bias for some pullback after this Expiration; it has been a great week; and an entire Quarter during which (so far) we rode the rally and while not cheering it; believe it would move above S&P 2800; as well as on the back of expected progress on the China Trade Deal front. And though there will be 'relief sighs', one should not presume that instantly better profitability occurs on the global (or Asian) front, just because we get a deal done. And keep an eye on Europe; German car deals still pending. 

Of course there are wildcards; including Oil prices (although hopefully now Trump realizes he should stop talking them down or threatening opening all our reserves, because there is no emergency.. referring to crude.. and there is an underpinning including exports, with Venezuela crippled by stupidity in oil field management, and even the electrical (intermittent now) blackouts. (I will add that it's so treacherous to fly in there now; that American Airlines is suspending service. It's not political but related to Air Traffic Control not being reliable based on glitches or outages experienced on 'approach'. American was the last 'normal' carrier flying there; that leaves Cubana.)  

 

  

We believe there is 'in theory' room for stocks 'if' there is the perception of a 'Fed Put' under the market, even if realistically the Fed is saying what they'd sort of capitulated to saying; which was necessary given how they spun the sluggish economy as thriving when (aside ample jobs at fairly low wages for a majority of the population) they were really trying to cover 'Balance Sheet' offloading. Ultimately that issue hasn't vanished; so keep that in-mind.  

 

  

Some states preparing to 'take aim' at Google or perhaps Facebook; even Amazon; you have a wildcard injected there too. That's part of why I noted it the other day (in terms of antitrust action; though mentioned with regards to Amazon in-particular for a long time as a 'risk'; partially due to AWS trying to overtake competition, but by providing vendors incentives others can't).    

Stories surfaced that Boeing has a 'software fix' for the 737 Max coming in the next 10 days; and Boeing didn't comment on that. My thought: this really is more than software; but combining that with using both 'angle-of-attack' sensors (the ill-fated aircraft only used one; hence faulty-data vulnerability); better training (to turn-off the circuit breaker on the system not just the yoke control.. or better yet have software do that part by default automatically); and whatever else they come up with.

In sum: there is no change in our outlook going forward; aside sensitivity to news coming from 'other than' the developing progress toward China Trade Deals. Thursday night's report already noted the 'new IP Law' China signed as well as progress towards probable 'final wording' of an actual Accord. Of course the FOMC Meeting is coming up (nobody expects a hike; but sober comments could -and perhaps should- be forthcoming from the Chairman).  

The 'other than' refers to surprises by Oil; by Venezuela; by Russia; serious concerns about North Korea; and of course short-term excessive optimism, that was expected during the Quarterly Expiration; with a bit of a pause the common expectation thereafter.