The USA and Mexico came to an agreement on an updated trade agreement. Next will be Canada. The stock market rallied on the news. New all-time highs were registered for the Standard & Poor’s 500 (SPX), S&P Midcap 400 (MID), S&P Smallcap 600 (SML), Russell 2000 (RUT), NASDAQ 100 (NDX). NASDAQ Composite (CCMP) and Wilshire 5000 (W5000) indexes. Only the Dow Jones Industrials (INDU), this year’s laggard, did not close at an all-time high and remains just over 2% from setting a record. That old record high will soon fall as well.
What was nice to see in today’s market, and that of the last few trading sessions is that the advance in stocks; which was narrow (i.e. mostly tech and consumer discretionary); is now broadening out. Financials, industrials and materials are now joining the party. As I have mentioned before, we are amid a secular bull market, one that started in 2013 and could last another decade.
I was overweight technology and retail stocks which have helped to propel our Growth Portfolios to an excellent year (call me for those returns). I have also been underweight materials, financials and emerging market stocks. With the Mexican deal etched in stone, I might put a little capital to work there and shave off some of my retail / consumer discretionary positions. However, I would not see any reason to put capital north of the border.
Of course, not all technology is alike and not all tech shares have worked this year. Facebook (FB) is only up $1 this year. Broadcom (AVGO) is lower by 17% in 2018. Ambarella (AMBA) is down a whopping 32.5% since the ball dropped in Times Square. Buyer beware.
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView Asset Management, LLC was long SPY, SSO, SPXL, QQQ, QLD, TQQQ, DIA, DDM, UDOW, IWM & UWM — although positions can change at any time.
Scott Rothbort is the President & Founder of LakeView Asset Management, LLC, a registered investment advisor specializing in high net worth private wealth management. For more information on investing with LakeView Asset Management, LLC call us at 888-9LAKEVIEW or request more information by clicking on the contact button on the top right hand corner of the website. LakeView Management, LLC is a Nevada LLC, with its principal office located in Henderson, NV and branch office located in Millburn, NJ
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