Happy Manic Monday to you all, it was yet another volatile start to another trading week, which I dread saying has become the norm over he past five or six weeks. The roaring bull market we were spoiled by all 2017 seems to be fading from memory more and more with each passing day of 2018. After nearly 13-months or stability and predictable up patterns you can’t even count on what you’ll get from the market from day to day lately.
The most puzzling part of these large points swings in the market indexes, they seem to have no economic or financial reasoning at all. An example is today’s swing, the market held a nearly 400 point upward for most of the session, only to give it back on news that President’s Trump lawyer office had been raided by the FBI. And while the credibility and stability of the executive office is indeed a vital market metric, the market seems far too often lately to be move positively or negatively off just mere rumors or news not based in economic concepts. It’s more public perception than anything else which is hammering financial stable and fundamentally sound corporations. But that just sets up at great opportunity for us all to by awesome company’s on a bargain price that wouldn’t otherwise exist.
The next corporate earnings season kicks off later in the week with financial companies BlackRock, Citigroup, J.P. Morgan Chase and Wells Fargo all scheduled to release their quarterly results. These results as well as plenty other should put much of the emotional trading that has been poisoning the market lately to rest, for at least a little while. Which means these buying opportunities could soon dry up once the Street recognizes that the blue chip stocks are still in solid position to be profitable and the tech sector while recently experience PR scandals are still the long term successors to the industrial stables of old.
The BioTech sector seem to still be flirting with consolidation with Novartis (NVS) offered $8.7 billion to acquire AveXis. Corporations still seem undeterred in their merger and acquisition admits even though regulations seem opposed to any appearance of monopoly or too much power in the hands of a few “Too Big To Fail” corporations. This is only worth noting because sooner or later someone is going to break the code to approval and that will create a wave of new M &A opportunity.
All and all I still believe in this market still being the best place for your money. Even with interests expected to raise with three or four Fed rate hikes expected this calendar year, the ROI you receive in the stock market is unrivaled overtime. I just urge precision and moderate risk taking. Diversify your assets while chasing these attainable profitable. Per usual I wish you a productive week and prosperous investments. Will talk to you soon.
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Jamaal W Vetose
Director of Research and Analysis