Morning Market Thoughts
Good morning. The futures are up sharply as the French election didn’t produce any surprises. And these days, any election that goes as projected is a seismic event that moves markets! And it makes investors a bit more confident as they wonder if they should continue to climb that wall of worry, or if they should just be happy that they’re not dodging boulders being thrown off the wall by the bears.Well, I hate to be the bearer of bad news, but there are a few more unpredictable events to deal with over the next couple of weeks. First, this Thursday brings us Amazon (AMZN), Microsoft (MSFT) and Alphabet (GOOGL). That will make Friday a pretty sporty day. Next, on May 7th the French go to the poles to elect their President. If Le Pen is elected, they will say good bye to the EU, and their immigrant situation will at least be addressed in actions based on reality rather than on the fantasy that all of the governments in Europe have been feeding the people. That would likely put a serious dent in the market because of the unpredictability of the situation. Seeing another strong nation leave the EU and go back to their own currency would be a serious thing. It would also be a buying opportunity.
Remember Brexit? I do. It was actually fun watching the BBC reporters calling the referendum in real time. They were soooo soooo confused. It was a real window into the world of broadcast news television. So much confidence because they always have a handle on what is happening. But when it doesn’t happen in the way they expected, they are revealed for what they really are — very small, people who equate passion and partisanship with intellect, and who are quite comfortable reading cue cards that were written by someone else. But when the cue cards are pulled and they have to ad lib…well, that’s where the fun begins. The same thing happened during the US election, but no need to go into that. All of you know what I’m talking about.
The consensus is that Macron will win — and while he’s not in one of the big major parties, he is still considered an insider. And since 60-70% of the electorate in France (I forget the exact percent — think it is 70%…but don’t hold me to it) favor staying in the EU, Macron has the inside track because he’s a EU guy. But who knows? I don’t have a dog in that fight. The only way I will ever visit France on vacation will be to travel someplace warm–like Hawaii or the Bahamas–hop on the interweb, and have a YouTube day, where I see all the sights in France. It will be really fun.
But the thing to watch next week will be the multi-national companies like Caterpillar (CAT), Microsoft (MSFT), Alphabet (GOOGL), Boeing (BA), and McDonalds Corp (MCD). If Macron prevails, we should see quite a rally. It might be just the thing to kick the market higher.
This morning, note that GOOG and Amazon (AMZN) are up $9 and $10, respectively. Both will be testing their all-time highs, so watch them carefully. As they go, so goes the market.
See you in the forum.
–Dan
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