Skip to main content

Another Update, Yawn (Not!)

This is no time to snooze. This week was one for record books for the massive amount of incomplete news, the mixed outcome of some important economic stats and the unruly price action of the broad indexes, up one day, down the next. For the most part, its business as usual, but with the markets at such lofty levels for the year, I see the goal should be to remain cautious and ignore the more impulsive investor behavior in favor of a protective strategy. Here’s why.

The Markets
With the equity markets continuing their impressive year, getting the most recent lift from the optimistic expectations stemming from current tax legislation, the facts are still elusive. I have as much to like and dislike from what I’ve read and my overall take away is that the potential of the markets to rise on the circumstance and sell on the outcome has rarely been stronger. That said other investment environments and external events are serving as strong distractions, including, OPEC cutting oil prices, bitcoin rising to record levels on the back of an announced launch of a tradable futures contract by Dec 18th, and what turned out to be a very good earning season especially for the retail industry, always a good sign for the markets and the economy.

The Economy
Between the recent estimate upgrade of the 3rd Quarter GDP from 3.0% to 3.3% and the release of the highest consumer confidence level in 17 years the economic news has been mostly good. I say mostly, because among the contributors to recent volatility in the markets has been a decline in the Chicago PMI manufacturing index, albeit from larger than normal recent rise it is still worth paying attention to. Mainly because as most of the positive news focuses on indicators that suggest continued downward pressure on the unemployment rate and potential higher inflation, inflation could become a problem at some point too.

The Fed
In the meantime it’s hard to imagine the fed won’t increase interest rates at their next meeting on Dec 12 and 13th. With good economic data that comes from consumer’s activity the outlook for inflation still seems the primary incentive as well as Europe is showing similar signs of pressures. However, rather than talk much about the reporting board the outlook for the expiration of the current chairpersons term is leading the concern as to whether the incoming replacement will raise rates too aggressively. No reason I can see for that happening but the news adds to the current market volatility.

The Government
Which bring us to the nerve center for market volatility. While much of the media activity swirls around the current administration the financial markets have managed to focus on the economy and corporate activity instead. Good thing, since there is much that will eventually come out of the current political dilemmas that will get a fair spin that an investor can act on.


There you have it, a rising market, lots of volatility and very few answers to much external activity. Generally I choose to shift to more large cap and dividend friendly investments to be better prepared for any unexpected surprises. I still think the year will end on a high note, so I’m more looking into the first quarter of next year.

Popular posts from this blog

I B!#*$ For A Living

Not really, but I’d like to. The problem is I don’t search, or that is to say I don’t search for this blog. I do search, regularly so, with the same vigor that I flip though a newspaper. I have my pet subjects, finance, art, and sports, politics (not necessarily in that order) I never look at real estate and I rarely look at style articles. One of the reasons I don’t search for this blog is because there is a fine relationship between the price (the value of an asset) and time (the freshness of the analysis) that serve to form my views. That’s the only way I can assure that my posts are mine, grammatical blemishes and all. It also affords me the privilege of some license whereby I’m open to write about almost anything that strikes me as useful in the aim to inform. That’s one of the main reasons I choose to inhabit the space, which brings light to financial news, because it’s so reliant on nearly every other market, across all cultural and political spectrums and best of all it always…

Please Don't Believe Everything You Read

“I have news for you” said Andre
And as I peered through his bad hair weave, and “coke bottle”” glasses I realized he was right.

Nowhere in our collective memories do we ever fully understand the workings of our mind. Driven not by the collective accumulation of information but rather defined by the processes eternally influenced by the random cocktail of chemicals in our heads and poisoned by the principles we carry around in our back pockets with all smug confidence.