WASHINGTON, July 22, 2016 – All the shouting has stopped—at least for this week in Cleveland—as more or less happy Republicans stream out of beautiful downtown Cleveland for what will likely be a short break before 2016’s wild rumpus really begins. Donald Trump delivered a pounding, harsh and somewhat overly-long acceptance speech to close the Republican National Convention last night, an address that was loaded with red meat for Trump fans and/or suicidal extremism depending on your point of view.
Hillary fans couldn’t have been happy that Trump directed his relentless attack on Washington crony capitalism squarely at our national Hildebeest, but that may be a good thing. The near-legendary Clinton machine runs in attack and destroy mode 24/7 and the only candidate who could possibly mount a challenge to her from the Republican side of the aisle needed to be a candidate the Republicans have never had: an attack dog who could outsnarl a seasoned team of Clinton smearmeisters, including the likes of John Podesta et. al.
Trump’s anti-crony capitalism remarks along with what for all intents and purposes sounds at times like an endorsement of Smoot-Hawley II has bugged quite a lot of businesses and donors. On the other hand, sorely tested energy companies have to be passing the hat, particularly those (formerly) in the business of mining America’s vast coal reserves, most of which are scheduled to sit in the ground forever now, courtesy of Barack Obama’s catastrophically destructive, global warming climate change obsessed EPA.
Bottom line: whichever nominee actually wins in November, some businesses will rejoice and prosper, while others could sink into oblivion.
The Dems are up in Philadelphia next week. We won’t be watching. Having lived in the DC metro area continuously since 1976, we’ve become cynical following the endless parade of Democrat lies and chicanery and no longer need an instant replay.
But markets will be watching the fun, such as it is, the better to make an initial assessment as to just who they’ll finally back and with how much money. Stocks will react one way or another, unless disgruntled “protestors” (read: professional paid brown shirts) cause the kind of 1968 instant replay we all thought they’d cause in Cleveland—but didn’t.
Monday and/or Tuesday markets should be weak, following on what so far has been a ho-hum Friday. We won’t even bother to predict how things will go next week after the Philly convention concludes. The central banks are firmly in control of these markets, and analysis will only do us so much good.
So we’ll continue to sit back and pick exit and entry points one at a time as we await a more definitive market tone.
We waited and waited yesterday, but never even got the usual automatic announcement that we got zero allocation of shares in yesterday’s Patheon (symbol: PTHN) IPO. But we never saw any PTHN shares move into our accounts, so deductive reasoning quickly arrived at the answer.
As we suspected, this multiform Netherlands-based drug manufacturer, priced at a mid-range $21 per share, got a nice pop after it opened yesterday, settling in the $24 range. Today, PTHN is trading at $25 and change, which already gives those lucky rich dudes who did get shares a handsome 1-day profit of roughly 20 percent if they flip those shares today, which most of them will.
It’s kind of galling that neither the Maven nor anyone else of modest means got many (or any) shares of Pantheon Thursday, but as we’ve always said here, that’s the way it goes. Rich clients will nearly always get some shares as a kind of special “present” for staying with their current brokerage firm. Less rich clients… well, who gives a flying you-know-what? Irritating. Grrr.
The Maven is done now, so let’s move on.
Actually, there’s nothing much to move on to. On this iffy Friday, our preferred stocks and REITs continue to erode a bit around the edges. Our management company/investment capital twins Blackstone (BX) and KKR (KKR) have finally been catching a hefty bid; and our somewhat reduced position in Teekay Tankers is taking an 8-cent hit after a surprisingly healthy 2-day rally. The shorts are still trying to kill this one off, so we’ll have to stay patient here.
So what the heck. It’s so hot and humid down in the DC area that the best investment the Maven can think of right now is a cold, cold draft down at one of our many excellent neighborhood watering holes. This is trickle-down economics at its best.