Crossing Wall Street Review – March 2, 2018
By Eddy Elfenbein, editor of Crossing Wall Street and portfolio manager of the AdvisorShares Focused Equity ETF (Ticker: CWS)
“Your margin is my opportunity.” – Jeff Bezos
The S&P 500 went 94 straight days without a 1% day, either up or down. Now it’s happened 15 times in the last 24 sessions, including the last five in a row (first two, up; last three, not up).
I cautioned investors that the ruckus hasn’t yet passed. Three weeks ago, the S&P 500 bounced off its 200-day moving average, and it will likely “test” that support level again. Financial markets don’t walk away from a mess like we had so easily. Fear of the market gods is clean, enduring forever.
Let’s remember that the broad economic climate is quite good. This week’s initial jobless claims report showed figures at their lowest level since the 1960s. Thursday’s ISM Manufacturing report was the best one in 13 years, and consumer confidence is now at a 17-year high.
So what’s bugging Wall Street? This week, investors got a bit spooked by fears of a trade war. President Trump proposed steep tariffs on steel and aluminum. I thought it was interesting that on Thursday, stocks of big steel consumers like auto-manufacturers fell hard.
Frankly, I’m skeptical that these plans will be implemented. Within the business community, the opposition to steep tariffs is nearly overwhelming. Also, a lot of the big steel exporters are good friends of the United States. Perhaps, President Trump is sending a message to China. As usual, I’ll steer clear of the politics, but I’ll comment on the policy’s impact. I don’t think Wall Street will like a trade war.
I wanted to do something a bit different this issue. I recently asked readers for some feedback on the newsletter, and I got very constructive suggestions. A number of readers wanted to hear more in-depth reasons for why I like a particular stock.