E Market Briefing For Wednesday, Feb. 6

Worries have subsided as the market progressed into overbought status over the most recent weeks. There is lots of corporate debt out there; while a lot of companies have not added to it (so debt-to-equity ratios look good); although the absolute levels (often due to buybacks) remains high.  

For the most part one can dissect corporate specifics among the big stocks, and really not find an answer as to 'how or why' the market will advance, or decline for that matter. To a degree the 'structural' changes of the market in the past couple decades, which excessively focus on 'passive investing' and ETF concentration, is a good part of that. When managers determine to run markets (or bail of necessity not necessarily desire); stocks do move.  

This year is a bit different for a few reasons; one of which relates to China of course (and trade and tariffs in general; with avoiding of restrictions being a preferred goal for the market); and another is being a transition year for the technology sector; ranging from AI to 5G. And of course 'political angina' as 'may' still be pending (whether Federal or New York's other probes). This is making it a 'tad' more of a market of individual stocks, than a stock market.  

Given the backdrop, it makes it a little tricky not just for trading the market, which is overbought and achieved our upside goals (always welcome to get more but we are looking for some pullback as we approach mid-month most likely). It also makes it tough as to interpreting even a conciliatory State of the Union Address tonight.  

I would like to believe that his opponents, at this point, recognize they need to broaden their appeal to include those who felt left-out in the last Election. And yes, one can sense this is already working-up to the 2020 vote; which at some point Wall Street and the markets are going to take note of too. 

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