Friends

As expected, it was a very quiet day of trading. Stocks were
able to squeak out a small gain by the close, but volume was light and
volatility was muted. We do have the ADP private payroll jobs number tomorrow, and
the non-farm payroll number on Friday, so that might add a little spice to the
situation before the end of the week.

For the day, the Dow Jones Industrial was up 69 points to
close at 26,786. The S&P 500 was up 8 points to finish the day at 2,973. Gold
was up $27 to trade at $1,416 per ounce, while oil was down $2.72 to trade at
$56.37 per barrel WTI.

With 4^th of July on Thursday, the markets close
early tomorrow at 12:00 noon our time- so we will be closing the office early. We’ll
let you know if anything happens during the shortened trading session tomorrow
before heading out for the day.

Have a nice evening everyone.

Jim

Friends

The bulls were content to sit on their gains as the quarter
came to a close today. Market participants will be keeping an eye on
developments coming out of the G20 meetings over the weekend, but as we look into
the second half of the year (can you believe that?), the bulls have some
headwinds to navigate, not the least of which could be a developing earnings
recession.

As for today, by the close the Dow Jones Industrial Average
was up 72 points to finish the day at 26,599. The S&P 500 was up 16 points
to close at 2,941. Gold was up $1 to trade at $1,413 per ounce, while oil was
down $1.44 to trade at $57.99 per barrel WTI.

It was a very good first half of the year for the bulls. As
mentioned, many challenges lie ahead as we enter the second half of the year.
We’ll know what transpired on the China trade front when we fire things up on
Monday, and then we’ll begin to look ahead to the upcoming corporate earnings
season. Trade, corporate earnings, a jobs report and inflation numbers will all
be considered when the FOMC meets in late July. Expectations are that the Fed
will cut rates at that meeting, but that remains to be seen. Let’s first enjoy
the gains from the first half of the year.

Have a great weekend everyone.

Jim

Friends

Nothing like jumping the gun. Stocks rallied mightily today
on hopes that the Fed is going to begin to cut interest rates as soon as
tomorrow, and on a tweet from the President that he had spoken to Chinese President
Xi. Add in departing ECB head Draghi’s dovish statements and you have a
trifecta of positive events for the bulls to run with.

By the close, the Dow Jones Industrial Average was up 353 points
to finish the day at 26,465. The S&P 500 was up 28 points to close at
2,917. Gold was up $6 to trade at $1,349 per ounce, while oil was up $2.17 to
trade at $54.09 per barrel WTI.

We’ll get the Fed decision tomorrow at 1:00 our time, and
then the Fed Chair’s press conference at 1:30. I would be surprised if the Fed
actually cuts interest rates tomorrow, but it appears the markets are hopeful.
I do think that the FOMC and the Fed Chair will try to make it clear that they
are ready to cut as soon as the July meeting, if the economic data warrants it.
But, he has to be careful not to cast fear that things are deteriorating so
quickly that the Fed has to come to the rescue.  We’ll find out if the
market is already pricing in that cut (it appears so), and what the reaction
will be if market participants/Fed watchers don’t get the cut or at least the
language they so dearly desire. Stay tuned, we’ll let you know how it all plays
out tomorrow.

Have a nice evening everyone.

Jim

Friends

It’s amazing what moves stocks these days-both up and down.
Today stocks rallied on word that whatever tariffs were going to be initiated
next week on Mexican goods is being delayed for the moment. Stocks moving up
and down on tariff rumors is the world we live in now, but my goodness it all
seems amazingly goofy. Anyway, we trade the markets that we have, not the
markets that we think we should have.

By the close, the Dow Jones Industrial was up 181 points to
finish the day at 25,720. The S&P 500 was up 17 points to close at 2,843.
Gold was up $4 to trade at $1,338 per ounce, while oil was up $1.36 to trade at
$53.04 per barrel WTI.

The other thing buoying stocks these past few trading
sessions is the hope that the Fed is about to come to the rescue with rate
cuts. Tomorrow’s jobs report will either feed that narrative or put the brakes
on it. Good news might be bad news if the number is too good (remember the
expectations are the 185,000 new jobs were created in May). Of course, if the
jobs number is as bad as the ADP number was this week, what does that mean?
Yes, it fits the Fed rate cut narrative, but is weakening economic data what we
really want? Let’s see how tomorrow’s jobs number plays.

Have a nice evening everyone.

Jim

Friends

As you know, tariffs are the
Presidents favorite blunt instrument to influence behavior, but markets aren’t
particularly fond of them. The President’s threat to impose tariffs on Mexico
if they don’t become more active/helpful in the immigrant crisis sent stocks
tumbling down.

For
the day, the Dow Jones Industrial Average was down 355 points to finish the day
at 24,814. The S&P was down 37 points to close at 2,752. Gold was up $18 to
trade at $1,310 per ounce, while oil was down $3.33 to trade at $53.26 per
barrel WTI.

The correction that we
referenced earlier in the week continues and trade war headlines continue to
feed the bears. It was a difficult month of May and now we enter the dog days
of summer. Stay tuned, we’ll try to keep you cool and informed over the coming
months.

Have a great weekend
everyone.

Jim

Friends

It was a somewhat soft beginning to the week for stocks, as
more than real selling pressure, there simply does not seem to be much of an
appetite to buy. The continuous drumbeat of trade war headlines continues to weigh
on the markets collective psyche while economic data continues to be mixed. We
get more earnings from retailers over the next couple of weeks including Home
Depot tomorrow. We continue to see the department stores struggle, but Walmart
had good numbers last week, and we’ll get a look at Target on Wednesday.

As for today, by the close the Dow Jones Industrial Average
was down 84 points to finish the day at 25,679. The S&P 500 was down 19
points to close at 2,840. Gold was up $2 to trade at $1,277 per ounce, while
oil was up $.40 to trade at $63.16 per barrel WTI.

The old “sell in May, and go away” adage appears to be
working so far this Spring (as with any old Wall Street adage, you could flip a
coin just as successfully), but as we have noted this month’s weakness could be
attributed to trade headlines as much as any real valuation risk or earnings
weakness. Whatever the reason, stocks have floundered somewhat recently and the
bulls are searching for a reason to buy.

Have a nice evening everyone.

Jim

Friends

As we mentioned after yesterday’s market dip, we are on
headline watch and that a simple tweet can move stocks in either direction.
Well, this morning we got the “Chinese want to make a deal” tweet from the President
and stocks quickly moved into positive territory. As further comments from the
White House seemed to confirm that talks were back on for later this week,
stocks moved comfortably into positive territory. But, the enthusiasm waned and
stocks drifted lower into a disappointing close.

For the day, the Dow Jones Industrial Average was up 2
points to close at 25,967. The S&P 500 was down 4 points to finish the day
at 2,879. Gold was down $4 to trade at $1,281 per ounce, while oil was up $.73
to trade at $62.13 per barrel WTI.

Positive trade headlines have become less and less effective
as more and more doubt creeps into the actual validity of such headlines. On
the other hand, negative headlines about the Chinese trade situation sends
ripples of fear through the markets and stocks seem much more susceptible to
such headlines. Before doubt was introduced into the trade proceedings this
week, it appeared that the stock market was in a position to actually melt up
given the comfortable environment for stocks (employment, inflation, GDP,
earnings and tailwinds), but now it feels like the downside to a lack of a
trade deal is considerably higher than the upside of achieving a trade deal. In
other words, the risk/reward equation appears to have changed this week. Stay
tuned.

Have a nice evening everyone.

Jim

Friends

It’s a big earnings week with Google (Alphabet) announcing
their earnings after the close today and Apple after the close tomorrow. Google
shares posting new all-time highs today would seem to be in a precarious
position going into the release, while Apple has also had quite an advance so
far in 2019. It will be interesting to see if those stocks are fully pricing in
good news, or can the companies exceed expectations enough to actually push
shares higher?

As for today, things were mainly quiet, and by the close the
Dow Jones Industrial Average was up 10 points to finish the day at 26,554. The
S&P 500 was up 3 points to close at 2,943. Gold was down $6 to trade at
$1,282 per ounce, while oil was up $.32 to trade at $63.62 per barrel WTI.

Earnings are front and center at the moment, just at the
moment stocks are touching all-time new highs. A bit of a high bar for
Corporate America to clear just when things were supposed to be getting more
difficult for them. Should be an interesting week. Stay tuned.

Jim

Jim

Friends

At first blush, our first look at 1^st quarter GDP
was a bit of an eye opener. The economy grew at 3.2% in the 1^st
quarter which was quite a bit better than the 2.5% that analysts were expecting.
But, after further analysis the bears among us noticed that a good portion of
the growth was due to inventory build and that underlying demand had weakened.
Remember the days when a good number was just, well, a good number? Bond market
participants immediately went with the more cynical view as bond prices rose,
while yields fell. But, stocks had a relatively good day. Moderate growth with
low interest rates and no inflation has been just fine for stock investors for
quite some time.

Anyway, by the close, the Dow Jones Industrial Average was
up 81 points to finish the day at 26,543. The S&P 500 was up 13 points to
close at 2,939. Gold was up $8 to trade at $1,288 per ounce, while oil was down
$2.32 to trade at $62.89 per barrel WTI.

On the earnings front, Intel, Chevron and Exxon Mobil
disappointed, while Amazon did its thing and delivered solid results. As busy
as this week was, next week is the busiest week on the earnings calendar. We’ll
see reports from Alphabet (Google), Apple, GM, McDonalds, Conoco Phillips,
Merck, Pfizer, Kellogg, DowDupont and hundreds more. As we have seen the
earnings reports and the subsequent share price reactions have been very mixed.
My overall impression so far is that earnings are probably a little better than
we expected, but share prices were already reflecting that, with the advance we
have seen since the beginning of the year. Also noteworthy is that companies
are still providing very cautious guidance going forward, and that too has been
a bit of a headwind for stocks over that past couple of weeks. All in all,
though, here we are at all-time highs. As I said, stocks don’t mind a slow
growth, low inflation, and low interest rate environment. We’ll let you know
how next week’s busy earnings schedule plays out.

Have a great weekend everyone.

Jim

Friends

Today’s earnings releases produced a mixed bag of share
price reactions. Johnson & Johnson had a very nice earnings beat and for
the most part the stock reacted positively. United Healthcare had what looked like
a nice earnings scorecard but the shares, after rallying initially, spent the
day down significantly. Bank of America had a nice earnings beat, but one buoyed
by cost efficiency more than revenue growth. Nevertheless, the shares fell
early but recovered to end the day mainly unchanged. As I said, a very mixed
bag of results, and not all that surprising given the market action so far this
year.

As for stocks in general, for the day the Dow Jones
Industrial Average was up 67 points to close at 26,452. The S&P 500 was up
1 point to finish the day at 2,907. Gold was down $12 to trade at $1,279 per
ounce, while oil was up $.73 to trade at $64.13 per barrel WTI.

The earnings parade continues after the close, and over the
next 2 days, before we break for the holiday weekend on Friday. In the meantime
we’ll monitor the results and how the companies’ shares react in price. As seen
today, there is a lot of nuance with these earnings releases, and so much of
the stock price action is predicated on what type of move the shares have
experienced going into this earnings season. Stay tuned.

Have a nice evening everyone.

Jim