Morning Note: “To consort with the crowd is harmful”

Asian equities traded mostly green overnight, with 10 of the 16 markets we track closing higher. 

Europe, stressing over apparent intransigence (read brinkmanship) in the to-the-wire EU/UK “Brexit” trade talks, is on its back foot this morning, with 12 of the 19 bourses we track trading lower as I type. 

U.S. major averages are in the red as well, albeit slightly: Dow down 35 points (0.12%), S&P 500 down 0.01%, Nasdaq down 0.26%, Russell 2000 down 0.17%.

The VIX (SP500 implied volatility) is up 0.10%. VXN (Nasdaq vol) is up 1.02%.

Oil futures are up 1.32%, gold’s up 0.63%, silver’s down 0.40%, copper futures are down 0.20% and the ag complex is down 0.19%. 

The 10-year treasury is down (yield up) and the dollar is off 0.16%.

Led by energy, Verizon, banks, gold and healthcare, our core portfolio is bucking the stock market trend this morning, it’s up 0.26%. Base metals, utilities, tech, materials and consumer staples are the biggest laggards.

Here’s a little more of Seneca’s wisdom — this morning on the danger of crowds. I’d apply this to investing, and — perhaps — to other realms as well:

“To consort with the crowd is harmful; there is no person who does not make some vice attractive to us, or stamp it upon us, or taint us unconsciously therewith. Certainly, the greater the mob with which we mingle, the greater the danger.”

Speaking of crowds, investment advisor bulls are getting a bit raucous. 

Take a look at the latest Investor Intelligence advisor sentiment bull/bear spread (bottom panel). And note what often happens in the top panel (SP500) when the spread exceeds 40%:

Have a great day!


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