A new week for the stock market and it looks like we are off to the races this week.
The stock market is gaping up around 1/4% with TLT and SLV the only red I see on the screen this morning.
That is a positive premarket to me.
There is a lot of positive news this morning. The biggest of which is the U.S. China trade deal.
A top Chinese official and a delegation will be in the U.S. this week to discuss trade. Combine that with the White House lifting restrictions on ZTE, a chinese company, that they dropped the hammer on a few weeks ago.
All indications are that a trade deal is in the works. The tariff talk was posturing for a deal and it looks like it will be successful. If N. Korea is any clue I imagine the trade deal will be excellent for the U.S.
This is all very bullish for the markets. More than you can imagine.
But, the uncertainty of the fallout of leaving the Iran deal is high on the negative side.
We are at the beginning stages of a lot of chaos. But remember this White House thrives on Chaos. While everyone else is swiming in uncertainty this White House operates at its best.
The primary concern right now is what will the E.U. do. This is an interesting situation. The E. U. is now in a very tough spot.
I imagine they have a lot of money hanging out to dry right now. In addition, Iran stating they will out the politicians that took bribes to get this Iran deal through most likely has a lot of people losing sleep right now.
Then you have the White House who does no appear to be softening its stance toward the E. U.
If this is not complex enough you have Kerry, Obama and the gang meeting with E.U. officials and Iranian officals essentially giving them advice on how to circumvent U.S. policy.
You cannot make these scenerios up:)
My guess is it will wash out by the E.U. capitulating to the White House. Already european companies are holding off on their investments in Iran. They will yell and scream but come along for the ride.
That is no certainty. There may will be a confrontation with our allies on this. And there may well be fallout to Kerry and the gang for interfering with U.S. policy.
Its too early to tell at this point but we should have a better grasp on things by the end of the week. This will be a long drawn out affair with Iran. It will not be as simple as N.Korea has worked out to be. There is no China to intervene. Its an entirely different dynamic.
That is a brief synopsis of events. Of course there are more: The OIG report due out in several weeks, the SC investigation, dysfunction in Congress, primarys and the upcoming budget fight.
With that in mind the markets are overbought right now. It would not take much news to send the markets lower for a pullback.
I am long a core porfolio of stocks, bonds and ETFS. The great bulk of my core portfolio has reasonable dividend and interest. Only a small amount in pure growth stocks.
I plan on adding to this soon with some reasonable yeilding instruments. Mid risk bonds look very attractive to me right now with the business environment so solid right now.
Good Luck Today
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