E Market Briefing For Monday, April 17
MOAB Friday wasn't the largest burst of sellers ever, but was a reminder of the likely stock market Thursday trading pattern ahead of what we've said would be a military weekend. MOAB: Mostly Obvious Absent Bids.
Focusing beyond geopolitics..
Besides the prospects of conflict, it is important to consider that there are other issues out there. Among them; an excess valuation level in many sectors; mixed Dollar behavior; better or improving trade relationships that few realize shaping up; the Debt issue of a 'Continuing Resolution' coming up (likely dealt with but not focused upon adequately yet); and of course the lack of US consumer spending growth, a factor I've warned about for many months as essentially 'recessionary'.
Of course what I'm anticipating down-the-road is economic revival adequate to spark profits and Household Incomes gains; but generally that's ahead for America, not a present condition. Plus the deferral of healthcare and reform in tax and capital repatriation matters simply means low CapEx and lack of urgency by business to do much of their own stimulus; for now.
This is why I'd warned during months of bullishness from the Trump Election forward, that we'd need to see legislation or timing for implementation so as to limit the breadth and depth of believed inevitable corrective action. More distribution was expected to be reflected in a series of rebounds following of course the post-Speech early March; the secondary test of that peak on the expected Fed rate-hike; then subsequent more-feeble rebounds as followed while the S&P worked erratically and slowly lower, while Nasdaq mostly held better, buoyed a bit by Oil stocks (and initially by techs, faltering later).
Bottom line: War preparations seem hurriedly underway throughout Asia.
Stocks were defensive on Thursday as projected; China continued warning North Korea to 'stand-down,' parading its own missile-might on television as if to remind them there's a far larger military force to their North (worrisome that they showed ground-to-ship missiles; but we're presuming that's show, not an intent on using what they call their 'carrier busters'... ). The President reiterated that 'if China can't take care of it (North Korea); then we will. But he stated he believes China can 'take care of it'. Perhaps with assistance.