Welcome to our latest State of the Market (SOTM).  Please click the link to view the video. (58 minutes in duration)

Outline:

  • Introduction (0-3 minutes
  • FOMC/Fed meeting, revert to data dependency, no rate hike, what was removed in statement, usual behavior of the Fed, market reaction to Fed, no catalyst for inflation via PCE Index warrants Fed pause, policy error made in 4th quarter 2018 (3-10 minutes).
  • Permabear sentiment and the negative market bias (10-12 minutes).
  • S&P 500 Box, market uptrending to 2,700 but down 8% from high, market sentiment from Fed pause, technical bear market (12-16 minutes).
  • Facebook & Apple earnings worth strong share price move, Apple earnings forecasted to grow & has strong balance sheet, compelling valuations, how Apple & Facebook dictate price to consumer, Facebook business vs. potential government regulation and security expenses. 2.7bn users is largest advertising platform. (16-24 minutes).
  • Technicals signaling Amazon hits $1,700 and market hits $2,700. Wayne’s thoughts on current state of the market and potential going forward. Nonfarm Payroll report on Friday morning. Seth’s thoughts on market going forward and what portends a healthy pullback. 100-200-DMA levels. (25-29 minutes)
  • ADP Payroll and Initial Jobless claims on Thursday. Jump in claims was a seasonal issue related to temporary/seasonal hires from holiday period being laid off as normal operating procedures in Service Sector. New Home sales data strong, but comes with a margin of error of 20%. Housing decline more of a demographic issue than affordability. (29-38 minutes)
  • Forward looking macro-issues. Potential for another government shutdown. U.S./China trade talks as March 1 deadline looms for a deal. Mid-February the USTR will deliver assessment and recommendations on U.S./E.U. auto-trade/tariffs. (39-45 minutes)
  • Market liquidity factors have supported global equity markets in 2019 thus far, U.S. Treasury activities heading into Debt Limit in March and feed through to the market as a force of liquidity. (46-52 minutes)
  • Final thoughts on market and strategic portfolio management during correction period. Risk-Neutral during correciton period to stay nimble and trade, rather than institute any large positions.

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