Unfortunately, too many people worry about the wrong news when it comes to investing. Even worse, inexperienced traders, mostly day traders and hedge fund neophytes react to the wrong news. Fortunately for my students at Seton Hall University’s Stillman School of Business, I teach a course titled “Securities Trading and Financial News” which teaches, amongst other skills, how to anticipate and react to news.
When it came to Gary Cohn leaving the Trump Administration or President Trump floating the notion of and then instituting limited trade tariffs, that was news to avoid. The reason was, as Bill Murray ranted in Meatballs, that it the grand scheme of things, for the markets, it just doesn’t matter.
Gary Cohn might have been the President’s Economic Advisor, but that was in name only and many people inside and outside of the Beltway knew so. Larry Kudlow, formerly of CNBC (a friend and colleague of mine) not only had a great deal of influence with respect to the recent tax legislation, but he is now the leading candidate to replace Cohn. This is as we say, inside baseball.
As for the aluminum and steel tariffs, it was lots of bluster and frankly was just another round of warnings to China. Canada and Mexico were initially exempted from the tariffs and so soon will the EU. From a financial perspective, it was the equivalent of yelling fire in a crowded movie theater.
What you needed to focus on were two events, one last week and one today. Last week, the Bureau of Labor Statistics released the February jobs report. Not only was job creation better than expected, topping 300,000 but the poor January numbers were revised higher. Furthermore, the labor force participation rate improved while the unemployment rate remained the same. The labor force participation rate is how many people are actively employed or looking for jobs. Hence, new entrants to the labor market were hired and absorbed by employers. Lastly, inflation worries which rocked markets after the January report were calmed down after the February report.
Today, we look toward the bond markets, specifically the crucial 10-year US Treasury Bond auction. That bond currently stands at 2,88%. I expect the average yield to be between 2.87% and 2,89%. Anything greater than that will roil the markets. In addition, keep an eye on the level of demand, which is referred to as the Bid-to-Cover ratio. If it continues to decline then that might add some jitters to the bond market. I am not expecting the bond vigilantes to show up anytime soon, however Bloomberg did publish a nice article on the subject on Monday.
After ther market closed, President Trump blocked the acquisition of Qualcomm (QCOM) by Broadcom (AVGO) on national security concerns. Rumors swirled today on Wall Street that Intel (INTC) was taking a hard look at AVGO.
I expect to be on I24TV 7:30 PM EDST on Thursday.
Also, I have two rooting interests in the NCAA Men’s Basketball Tournament – University of Pennsylvania Quakers and Seton Hall Pirates. Unfortunately, to be honest, they will both fall victim to the Kansas Jayhawks, that is if SHU wins its first round game, which I expect to happen. My prediction to win it all is the University of Virginia Cavaliers.
Finally, thank you to ColCapital and in particular, Isabella Munoz and her team, particularly Alejandra for the fantastic hospitality, friendship, and content at the Latin American Private Equity Conference last week. Also, my best regards to the new Global A-Team of Catherine, Karen, Joshua, John, Tom and Weihua (plus me, Scott).
Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long AVGO & QCOM — 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
Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant, beverage and agricultural stocks. An individual subscription to the newsletter can be ordered at www.restaurantstox.com Furthermore; Scott is also a professor at the Seton Hall Stillman School of Business in South Orange, NJ.
– Read Scott’s intra-day thoughts and comments on Scutify for which he is a co-founder of its parent company Wall Street All-Stars, LLC
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