Apple, Facebook, and Mr. Powell lead Markets Higher-
The Wisest One Word Sentence? Breathe.- Terri Guillemets
The process of selling something is as important as anything that takes place in business. Human resources hires people for a specific job, marketing is the way to communicate what is being offered in the clearest and most presentable way to a potential customer. Accounting is the documentation and categorization of what transactions have transpired over a period of time in an enerprise. These elements of a business are important, of course, but sales is the life blood of any company. Sales are what bring in the dollars. If you participate in a business, perhaps you are familiar with, shall we say, the kind of alternatives a customer might use to delay or avoid a purchase? It goes something like, “I really don’t need anything.” Far be it for me to be disagreeable, but you only really need to eat, sleep, and breathe. The rest is what you want. I bring up breathing because it seems that the financial markets decided to do just that, take a big deep breath, as a way to recover from the last three months of 2018.
You see, since getting away from the idea that trade wars and a global recession were imminent, investors have calmed down, reconsidered, and decided Jay Powell might be a tad bit rational after all. As a result, markets have seen a nice rebound in 2019, not just in the United States, but across the globe as well. So, when the next selloff comes, as we know it surely will, the best reaction might just be to inhale once or twice, and slowly exhale to complete a nice big breath. Now, don’t you feel better.
In the markets this week, the January jobs report came in quite hot at over three hundred thousand, while analysts expeced a calmer 165k number. Fed Chairman Jay Powell reiterated the Federal Reserve Board decision to be patient about raising interest rates and settled on doing nothing (for now?). On the earnings front, Apple and Facebook fave a boost to equities as results weren’t as bad as feared. Amazon impressed with the growth in Amazon Web Services and it’s emerging advertising business, but warned on increased investments throughout 2019. Microsoft posted great numbers in the cloud but the revenue number was seen as a touch light. Apple also lifted spirits with good services and the admission it will reconsider I-phone pricing. Exxon, Chevron, and Shell showed there is some life in the oil patch as all beat expectations. Permian production was the highlight for Exxon and Chevron while strong refining and gas helped both Shell and Exxon.
Globally, the world's attention continues to focus on Venezuela as the crucial question about how long the army will continue to support Mr. Mudero is what will determine if there will be a change in that sad situation. For investors, the national oil company, PVSA, has seen reduced production for quite some time. More importantly is control of the CITGO asset in the United States, one of the largest independent refiners and marketing arms in North America. Some observers have also mentioned that under a change of regime scenario, the incoming leaders would probably decide to tell the country's largest creditors, Russia and China, they aren't going to pay what Mr. Chavez and Mudero borrowed. For the United States, efforts to tighten the screws on the Mudero administration and Cuba is a calculated effort that has little risk but plenty of potential if things were to change. Mudero has presided over one of the largest human rights disasters in decades, not to mention the economic bomb it laid on it's citizens.
Next week, Google leads off the earnings parade, and on Tuesday, President Trump will deliver the State of the Union address. With time running out on the effort to come to some kind of agreement on the immigration-border wall question as a way of keeping the government open, tension remains elevated. It might be a good time to take a big breath, what do you think?
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