Morning Note: Don’t Drink and Invest!

While we’re seeing a bit of choppiness, if not topiness, in US data of late (I’ll be scoring our macro index later this morning), the global setup appears relatively solid for the time being.

Business sentiment data overnight scored very positive for South Korea, Italy and the UK, with retail sales in the UK showing up better than expected. German consumers are feeling very good and overall economic confidence in Italy is downright giddy. Singapore industrial production blew away expectations and, believe it or not, inflation’s picking up in Japan (people said that was impossible).

And, as we’ve illustrated herein, valuations, dividends and huge prospects for reverting to the historic mean (catching up from years of underperformance vs the US) gives the edge to foreign equities going forward. And, therefore, has us presently tilting our core equity exposure internationally.


Asian equities rallied overnight, with all but 1 of the 16 markets we track closing higher.

Europe’s mixed so far this morning. With Sweden’s and Finland’s bourses closed, 9 of the remaining 17 we follow are trading lower, as I type.

U.S. major averages lean green to start the session: Dow up 155 points (0.45%), SP500 up 0.21%, SP500 Equal Weight up 0.33%, Nasdaq 100 up 0.12%, Nasdaq Comp up 0.15%, Russell 2000 up 0.31%.

The VIX (SP500 implied volatility) is down 1.25%, VXN (Nasdaq 100 i.v.) is up 0.31%.

Oil futures are up 0.61%, gold’s up 0.73%, silver’s up 1.00%, copper futures are down 0.59% and the ag complex is up 0.11%.

The 10-year treasury is down (yield up) and the dollar is down 0.25%.

Led by solar stocks, ALB (lithium miner), silver, emerging market equities and bank stocks — but dragged by MP (rare earth miner), VIAC, Eurozone equities and Verizon — our core portfolio is up 0.27% to start the day.


Sifting through my highlights in Annie Duke’s excellent book Thinking in Bets, the following had me thinking about folks who presently remain caught up in the chasing of meme stocks, as well as, well, name me one of the literally thousands of cryptocurrencies that have sprouted amid the $trillions of global money printing over the past year:

“We link results with decisions even though it is easy to point out indisputable examples where the relationship between decisions and results isn’t so perfectly correlated.

No sober person thinks getting home safely after driving drunk reflects a good decision or good driving ability. Changing future decisions based on that lucky result is dangerous and unheard of (unless you are reasoning this out while drunk and obviously deluding yourself).”


Have a great day!
Marty

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