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Morning all, I hope you're sheltered from the weather. I'm sitting here looking at the weather map and shaking my head, as we're seeing temps that are quite unbelievable. -25 in Chicago? -27 in areas of Wisconsin? Wind chills of -60?
These numbers are no joke folks. Stay safe. Stay inside as much as you can, and if you go out, make it as quick as you can.
Well, we sort of saw that one coming. Yesterday was a big pause day for the market as they waited on the Feds, and China talks and... AAPL.
After the bell AAPL announced earnings that evidently weren't "as bad as they might have feared," and "boom" they're up sharply.
Here's the deal. Not long ago AAPL came out and said that they'd stop reporting unit sales, and they "guided" lower for the first time in like 15 years. So that had everyone in a panic that AAPL was in terrible shape.
Well, it was pretty horrible, especially in China. Revenues from China sales fell over 25%. Yet just like the old adage is to buy the rumor and sell the news, they flipped it and sold the news of the guidance slash, and bought the actual release.
That's why we're looking at green futures this morning.
Granted I'm typing this at 5:40 am, but we see the DOW looking to open + 80. The NASDAQ +50.
But that could change today, as we've got the Fed decision and press conference this afternoon, and we've got the start of the China trade talks. While I'm sure there's not going to be any rate hike today and their language is going to be fairly dovish, I'm more interested in what they're going to say about the balance sheet.
Wall Street is playing down the effect of the winding down of the balance sheet, but I feel that's a mistake. Their balance sheet was the liquidity that pushed all these markets to bubble territory. Take away that juice, and what's to replace it? Nothing.
Most are thinking that if they stop hiking rates, then everything will be just fine. I don't agree with that. To be "fine" the way Wall Street defines fine ( meaning the market continues higher) I think they have to stop hiking rates AND slow the rate of balance sheet reductions. That's the part of Powell's talk I'll be looking for.
There's still a ton of earnings coming at us today, so get your popcorn.
We'll know a lot more about what this market is all about after we get past today. Actually, past tomorrow morning, because it will take them another half a day to digest the Fed.
With that in mind, today's simply a watch day.
So, I'll get with you around 11, and see what else has developed. I'll see you then.
First off, let me say that the launch of our new product "Horizons" has gone well, and we've already taken on two long term positions.
Last Sunday we launched the first introduction issue of our new product we’re calling “Horizons,” for people that are interested in longer term investing. If you missed getting in on this “from the start”, no worries. You can still sign up and of course get the initial “introduction” letter to the service. I think the “fun” part of this, is that the people that sign up this week, will get in on the ground floor, and get the very first “investments” we’re going to be making. The first letter with “actionable” investments goes out Sunday evening the 20th.. If you’ve liked the Insiders Club, or the FIR, but simply can’t “trade” because of jobs, etc. this could be the service for you. Simply go here:
Then in the commentary section of this weeks letter, we discuss why the economy still "looks" okay on the surface, while everyone with a brain knows that we're in a wold of trouble. So by all means, give today's letter a read, because under the surface the toxic brew is expanding. One day, it's all going to explode like some deviant volcano.