Home About Archives RSS Feed

@theMarket: Bulls Barrel Through Another Week

By Bill Schmick
iBerkshires columnist
Better quarterly earnings trumped concerns of a declining greenback this week sending all the U.S. stock averages to yet more record highs. There appears to be no end in sight for this continued "melt-up" in the markets.
 
Over in Davos, Switzerland, President Donald Trump addressed the annual World Economic Forum. For the most part, it was a classic display of "Trumpisms"— MAGA, unfair trading partners, historic stock market.  His "ain't American grand again, thanks to me" message failed to impress most of his foreign audience although his supporters were ecstatic over his speech. But whether you love him, or hate him, "The Donald" never fails to make headlines.
 
Steve Mnuchin, the administration's treasury secretary, was also at Davos. He managed to sink the dollar by over 2 percent on Wednesday, simply by failing to toe the line of former U.S. officials. The mantra of past secretaries had always been a strong dollar is good for America. Instead, Munchin, when asked about the weakening dollar, commented that short-term gyrations in the dollar did not concern him.
 
That's all the media and currency traders needed to hear. The dollar tanked, commodities roared, and news stories were circulating that U.S. currency policy had changed. By Thursday, Trump and his damage-control team went into action, denying all of the above and that the dollar would "become stronger and stronger." Mnuchin later insisted he had been misinterpreted and that a strong dollar was in the best interests of our country.
 
The greenback played yo-yo for the rest of the week. Down, up, down and by Friday back to the same levels it had been before the controversy. To be fair, Mnuchin was just telling it like it is. The truth is that no country's treasury secretary cares the least bit about the short-term meanderings of their country's currency, as long as those movements are within an acceptable range. To me, it was refreshing to hear someone acknowledge the facts of currency life, but what do I know?
 
The dollar's recent decline was triggered when Former Fed Chairwoman, Janet Yellen, mentioned that inflation was weak and might continue to be so. That set off some speculation that the Feds' intent to hike rates further might change, which would keep U.S. rates low. In addition, other central banks have recently signaled their intent to re-examine their monetary stimulus programs that could mean higher rates abroad.
 
Between the possibility of higher interest rates overseas, plus stronger global growth prospects elsewhere, investors are realizing that there are places besides the U.S. to put your money. Selling some green-backs and buying Euros or Yen-denominated stocks might make sense. Stocks worldwide had another great week as a result.
 
As for the market, overall, we are beginning to see a bit more volatility. By itself, that is not a bad thing, because the stock market is supposed to be volatile, and I suspect that may continue.  At the same time, there is an overwhelming feeling out there that the market is living on borrowed time.  With investor sentiment registering about 12 percent bears, many strategists are promising it is not "if" but "when" that pullback will occur. They are probably right. But before you begin thinking that you can time this market take note. The odds that you or me can get it right this time, meaning picking the top (and picking the bottom to get back in) is no better than winning the lottery.
 
Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
0 Comments
     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Clarksburg Board Trying to Settle Private Road Issue
Unified Sports' Growth Evidenced at Western Mass Jamboree
Lach's Lounge Shutting Down For Good
North Adams Youth Basketball League Tips Off
Beacon Cinema: From Blockbuster Hopes to Roll Credits?
Holiday Events and Tree Lightings 2018
Berkshires Beat: CATA's North Adams Exhibit Features A.R.T. Technique
Storm Could Dump a Few Inches of Snow on Berkshires
Neighborlies Honor Community Members' Dedication
North Adams To Host Annual Tree-Lighting Ceremony

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (273)
Independent Investor (373)
Archives:
November 2018 (5)
November 2017 (2)
October 2018 (5)
September 2018 (4)
August 2018 (9)
July 2018 (2)
June 2018 (8)
May 2018 (8)
April 2018 (7)
March 2018 (6)
February 2018 (7)
January 2018 (7)
December 2017 (8)
Tags:
Euro Recession Housing Stock Market Banks Congress Debt Europe Retirement Crisis Stimulus Commodities Fiscal Cliff Greece Metals Economy Deficit Election Jobs Stocks Selloff Debt Ceiling Europe Currency Oil Interest Rates Energy Rally Japan Markets Pullback Wall Street Bailout Federal Reserve Taxes
Popular Entries:
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
Recent Entries:
@theMarket: Markets Need to Hold Here
The Independent Investor: The Apple of Our Eyes
@theMarket: Stocks Take a Breather
The Independent Investor: Mid-Term Results Take Investor Focus Off Washington
The Independent Investor: Time to Check Your Risk Tolerance
@theMarket: October Lives Up to Its Name
The Independent Investor: Textbooks Worth Their Weight in Gold
The Independent Investor: The Student Loan Crisis
@theMarket: Will China Be Next?
The Independent Investor: Estate Planning Is for All of Us