WASHINGTON, April 17, 2017 – Markets opened up on a positive note today, the Monday morning after Easter. All three widely followed averages (DJIA, S&P 500 and NASDAQ) remain up roughly 0.50 percent as of the noon hour. As always, however, who knows where this will end?
North Korea and other jitters have been causing the stock market to flatten and drift down over the last few weeks, with occasional lift-offs occurring to brighten the gloom, just like Monday morning’s positive trading action. But the latest of North Korea’s Klepto-Commie Dear Dictators will be sure to stir the pot again. Soon. Which is why many investors remain skittish.
On the other hand, we think stocks got a bit ahead of themselves anticipating too enthusiastically the Wizarding World of Donald Trump, who, traders somehow imagined, would wipe out the scourge of Obamacare, kill off 8 years of crippling Obama executive orders and asinine departmental “rules” and “rulings,” cut individual and corporate taxes by, oh, say 500 percent for starters, and build a complete and “beautiful” wall on our southern border—all within the new administration’s first 100 days.
In the personage of Neil Gorsuch, we did at least get the hoped-for Antonin Scalia clone to replace that late, brilliant, nearly-sainted strict constructionist. Gorsuch’s confirmation was a home run for sure.
But everything else has seemingly reverted back to Washington’s stately, do-nothing pace. Nothing else has yet been done, save for some genuinely key countermanding of Obama’s more asinine executive orders. (As if any of them actually made an iota of sense, save for the entrenched bureaucrats of Washington.)
Chalk much of the nonsense off not only to the current “party of No,” the Democrats. But attribute just as much to the legion of Obama holdovers still running chunks of the Federal bureaucracy, due to the slow rolling of nominations and confirmations of their replacements in Congress.
Since the Stupid Party (the GOP) still hasn’t figured out to govern, this grinds things to an effective halt. Watch for the upcoming government funding nonsense to make things even worse by the end of this month.
None of this stalling and goofing around is Trump’s fault, although NBC and its associated networks have been proclaiming that since November 9, 2017. But at least some portions of the market have been slapped back to reality. Traders and investment advisors alike now realize that, although most of Trump’s promised initiatives and changes will eventually happen, any improvements at all will take longer than anyone thinks.
The one thing Obama, Reid and Pelosi were superstars at was gumming up the governmental works with fiendishly complex rules, laws and bureaucratic snafus built into the system as a feature, not a bug. It’s such a bloody mess that even our hyperactive new president, who apparently never sleeps, will have to do a lot of slogging through the swamp before he can shove the world’s largest Roto-Rooter into the Federal system in order to drain the sludge.
The markets appear to be adjusting for this accordingly, putting the Trump Rally on hold until the Administration and its fair weather friends in Congress can finally push through those major changes that just might help Make America Great Again.
We’re just watching and waiting for the most part these days. We have had a bit of activity in our portfolios, as we explain today in our companion column. But right now, cash looks good to us in light of the international situation.
If stocks start catching a bid again, as they have this morning, that might be a good sign. But until markets give us a clearer sign of direction up or down, it’s probably best to hold what we currently have while keeping some cash for markdowns in our favored stocks, if and when they happen.
More this week as the trading situation warrants.
*Cartoon by Branco. Reproduced with permission and by arrangement with LegalInsurrection.