Technology, Emerging Market Currencies Weigh On Stocks As Obama and Trump Fued!
Wowsy, Wowsy, Woo Woo, Woah, Woah, is Me- Bad Luck Schleprock
If you were a kid growing up in the 70’s, 80’s, or 90’s, watching cartoons on a weekend morning was about as good as it got. Shows like Bugs Bunny, The Flinstones, The Jetsons, Speed Racer, HR Puff N Stuff, and of course, Scooby Doo, kept plenty of these generations entertained and their parents from going a bit, shall we say, Scooby Doo. Personally, I always enjoyed a show that involved a character called Captain Caveman, and in another entertaining performance, an entity with an extremely negative attitude, something that went by the name of Bad Luck Schleprock. Our friend Mr. Schleprock found the worst in everything, and you did not want it anywhere around you. If it won the lottery, somehow, that would turn out bad. Schleprock’s favorite saying was the one above, ‘Wowsy, wowsy, woo, woo, woah, woah is me.’ If you are confused just look at the first twenty seconds of the clip below. Anyway, this week in the investment world, investors turned bad luck Schleprock as naturally, nothing was any good. Let’s take a further look.
The primary focus for investors was in the political realm as executives from Facebook and Twitter went before the hard working politicians to get grilled about data security and privacy for the masses. Google decided to decline the invitation, which probably was not the brightest move. In case you haven’t been paying attention, increased scrutiny in the EU and domestically is forcing the largest companies to spend far more money on compliance and security, which caused investors to rethink the whole sector. Even Amazon, it of the trillion dollar value, lost ground after the tech testimony. Many believe heightened regulation is inevitable, and John Malone weighed into the topic as he was quoted in Europe that he believes eventually Google will be forced to break up by the government. Certainly, companies that have to spend more money on anything that does not help profitability is not going to be viewed favorably by investors. So, technology was tainted all week with that brush, and it may stay a while throughout the sector.
Globally, emerging markets were a drag nearly everywhere as the strong dollar continues to punish countries in almost every geography. China’s trade issues with the US, Turkey’s foreign funding and inflation, South Africa’s new approach to land ownership, Argentina’s request for capital infusion from the IMF, and potentially an Italian problem in the Euro, are all leaving investors quite skittish, even, shall we say, wowsy wowsy woo wooing across the globe. Schleprock might even include Mexico into the mix as the peso is also starting to weaken. Here in the United States, naturally, Wells Fargo made it into the news as the regulators are now looking at improprieties in its wholesale banking division. You literally cannot name a division of Wells that isn’t involved with illegal activity. Maybe Elizabeth Warren has a point after all? Oops, my fault, let’s not go there.
On the political front, ex- President Obama made his first speech in a long time, and proceeded to name names about what is wrong with the current administration and how terrible it is. You have to give the Donald some credit though, especially for his response, which was that he thought the speech was very good, especially for sleeping. Amen, Donald, Amen. Elsewhere, Supreme Court nominee Cavanaugh came to the hill for the usual circus, which he was well acquainted with, having served in the White House for Bush junior. New Jersey Senator Booker was in fine form in terms of outrage, although every Democratic Presidential candidate joined that tone as a way to attract attention and raise money for 2020. Of course, the midterms are upon us and in a few months we will know more about how people feel about the current government. Next week, there will be a few investor conferences where CEO’s will try to convince those with capital that actually, things are pretty good, at least from where they sit. Still, it seems the current mood in the investment world, at least right now, has been adopted from our friend Mr. Schleprock, who perpetually needs a bit of cheering up.
Yale Bock, Y H & C Investments, its clients, and the family of Yale Bock have positions in the securities mentioned in the blog, Investing in securities involves risk and the potential loss of ones principal. Past performance is no guarantee of future results. All investment decisions should be considered with respect to ones risk tolerance, return objectives, liquidity needs, tax considerations, and one's overall financial situation. The fact that Yale Bock has earned the right to use the Chartered Financial Analyst in no way means or guarantee performance better than market indexes.