Morning Market Thoughts
Good morning. Stocks are opening weak this morning on some bad earnings…and a bad ADP report. In April, businesses added just 156,000 jobs, which was the worst number in three years. The good news is that this is a month where the Fed will be dovish and intimate that it won’t be hiking rates soon. (Note that, if the May jobs number is better, the Fed will change its view — nothing more fun than watching a bunch of economists trying to swing trade a global economy.)But the bad news is that a slowing domestic economy, combined with the ever present fear that China is slowing down, will make investors nervous. China is loosening its peg to the dollar. And since China is a serial currency manipulator, further de-linkage between the Yuan and the Dollar isn’t particularly encouraging.
Sooooo….stocks are under pressure, and my sense is that the idea of new highs (something that I have considered…during the times when I was not considering it) is not likely to become reality.
I received quite a bit of feedback about last night’s Strategy Session, where I gave a very impromptu formula for becoming a better trader. I also discussed some ideas for making better trading decisions. Oh, I also suggested that the aerospace/defense stocks that I have been highlighting are still where you want to be. If you haven’t viewed last night’s Strategy Session, you might want to spend some time today doing so — invest the time to improve your trading so that your monetary investments have a better chance of paying off.
But, if your primary motive for trading is to have some fun, experience some excitement, and get the old adrenaline pumping, then save some time. Don’t watch the video.
Bottom line is this: The market is choppy and fraught with risk. I don’t get to decide what market environment I prefer to trade and invest in. If I did, I sure wouldn’t pick this one. But I do get to decide what I am going to do in this environment. There are always opportunities in any market — they are just a bit more difficult to find right now.
Stay in the game, and you’ll be in a position to win when the other team gets tired and starts to miss more shots. (Think: Warriors v. Trailblazers, Game 2).
See you in the forum.
Dan
Market Update