PRE MARKET

Futures up a wee bit…but today doesn’t matter. Tomorrow doesn’t matters. What matters is one person and his minions using whatever data they see to continue easy money policies that go easier every time markets get in trouble. It nauseates us that we continue to be in central bank-induced markets…but it is the way it is. Wall street doesn’t complain. The politicians do not complain as long as it is easier money. The president had fits over a whopping 2.5% fed funds rate.

So we wait.  Let us just say they had better either lower rates or state they are looking to lower rates as we think a good chance markets are expecting it now.

The S&P sitting in handle above the 50 day. The NASDAQ is below.
The SOX trades like crap. You know how much we believe in the SOX. Fundamentals have not been good.
FINANCIALS comatose but can wake up quickly depending on the fed.
GOLD and GOLD stocks strong but need pullbacks. If the fed lowers, the dollar comes down and gold moves higher.
OILS…dead…been going on for quite a while..
Small caps continue to under-perform.
Transports not good but a few airlines coming up right side. Big insider buying in AAL by several people just under $30.
CHINESE ADRs gross.
INTEREST RATE SENSITIVE UTILITIES, REITS and now HOUSING doing well. A few HOUSING names look ready but very low beta.

WHY THE PRESIDENT IS IN ORLANDO ON TUESDAY

No…it is not because the Amway Center is about 1,000 feet from our offices. It is because Florida and certain parts of Florida, namely the areas around central Florida, that may matter most. Here are some very important facts.

Florida is a whopping 29 electoral votes…the largest swing state. Florida has gone for the winner in the last 6 elections, 3 times for a Democrat and 3 times for a Republican. While the average margin of victory over those 6 elections was 2.6%, both President Obama and President Trump won by about 1%. Specifically, President Trump won by only 112,911 votes out of a total of 9,122,861 votes. A switch of just 56,500 votes would have changed the playing field. With a Michigan (16 electoral votes) that the President won by less than 11,000 votes out of more than 4.5 million votes…with a Wisconsin (10 electoral votes) won by less than 23,000 votes out of almost 2.8 million votes…with a Pennsylvania (20 electoral votes) won by a little over 44,000 votes out of about 5.9 million votes, Florida is huge.

Hillary Clinton won only 9 counties but she won the biggies.

MIAMI-DADE COUNTY

Clinton 623,006 votes

Trump 333,666 votes

BROWARD COUNTY

Clinton 546,956 votes

Trump 258,521 votes

PALM BEACH COUNTY

Clinton 371,411 votes

Trump 270,762 votes

So why Orlando? First off, expect the President to do a lot of visiting the big 3 as any movement his way would be a huge help.  Orlando is simply the central part of the I-4 corridor. Yes…the nightmare we call I-4 as the “Ultimate I-4” construction continues. When we say nightmare, we mean nightmare. Central meaning it is easy to get to Orlando from Trump-friendly counties like Lake, Polk, Seminole, Volusia and Sumter County (the very friendly The Villages is there). Farther away, even Marion county. Nothing like getting your strong base fired up. But we think there is more to it than just that. It is  not a reach to believe the President is targeting Democratic strongholds of Orange County as well as Osceola county. When we played in tennis tournaments, we used to attack the opponent’s strongest areas. If their strongest ground stroke was the forehand, we knew if we broke down their forehand, the party was over. If we could weaken their strengths, it is much easier to win. We think the President knows that if he can win over large swaths of “enemy territory,” he is a lock to win the state. He is taking  advantage of an economy that is very strong here. It is not just tourism which is monstrously strong. Employment figures are strong with unemployment now under 3%. Total GDP is at its highest ever. Orlando Intl Airport is doing record numbers. With higher taxes being proposed by every Democratic candidate, President Trump can try to sell based on what Candidate Andrew Gillum was going to do if he won the governorship, raise sales taxes. Sales taxes would not be popular here and we can tell you, if the President lost, it would be easier to vote in a Democratic governor next go round. On a side note, it will not just be a speech, the President’s campaign is holding a carnival outside the Amway Center with rides, games, bands and all the trappings. The man does know how to give a good party. As far as voting:

ORANGE COUNTY

Clinton 329,579 votes

Trump 195,091 votes

OSCEOLA COUNTY

Clinton 85,287 votes

Trump 50,252 votes

But there are now over 215,000 registered Republicans in Orange County. In other famous words…GET OUT THE VOTE. On top of that Governor Ron DeSantis got 37% of the vote in Orange County, up from Trump’s 35% in 2016. Momentum! So…yes, method to the madness. This is not the President’s first visit as he has already held multiple rallies in Orlando itself as well as Ocala, Kissimmee, Lakeland, Sanford and Melbourne since his presidency.

Of course, there is still 505 days to the election. The economy can change. Markets can change. After all, no one knows what day the debt and deficits finally shoot the middle finger back at those that created the monster. It is going to be one heck of a ride.

 

PRE MARKET

It’s a long day but this BROADCOM (AVGO) news is important. As you know, the SEMIS are the most important group to our work as they continue to lead markets up and down. It used to be the FINANCIALS were first and SEMIS second. No longer. So…we will watch closely. Fundamentally, we have been saying the numbers out of the SEMIS have been suspect but the hope was “the second half!” Well, the second half rebound does not look at hand. Seeing some horrible chart patterns in the group. The group will need to stand up and be defended soon.

As far as the rest of the market, continue to think narrow…but GOLD and GOLD STOCKS opening at or around new yearly highs.

Other stuff:

China industrial production came in under expectations and 17 year lows.

The ECB saying they are very worried about bad loans. Really…hey ECB and Draghi, it’s your easy money and negative rates that do just that…promote bad loans.

German 10 year bund…new record low yielding 0.27%. That’s not a typo. Spain is at an all-time low at 0.50%.

 

 

PRE MARKET

SEMIS and FINANCIALS took brunt yesterday but major indices not going anywhere…and after weak overnight, we walk into an up morning as CHINA reversed early big losses.

Regardless, the Fed is next week. We expect them to lower rates or telegraph the lowering of rates in the next meeting…and that is usually what matters most.

FAANG stocks remain relatively weak but can get going in a nanosecond.

OIL prices spike this morning as a couple ships hit. OIL and OIL STOCKS have been weak.

 

LULU and RH big gaps to the upside.

PRE MARKET

Strong day yesterday with some give-back as the Mexico tariff thingy ended. We walk into another gap to the upside this morning as yields back up and money is deployed.

An amazing more than a “V” shaped move back up off of one thing…OUR FED once again crapping in their pants about a correction in the markets and changing their stance from “patience” to “lowering rates.” This after going from “raising rates a few times in 2019” to “having patience.”

Tech…which was a wreck into last Monday…straight up…and we mean straight up.

For those asking. BEYOND MEAT (BYND) got the valuation downgrade from their underwriter this morning. The stock is currently down $18 but valuation was a joke $100 points ago. Remember, price is what someone is willing to pay but eventually…eventually, valuation will matter.

The SEMIS led down and now leading back up. Remember, they have been leading markets up and down forever.

We could say markets are near-term beyond overbought but with the fed next week…