Saturday, March 18, 2017

TLH Market Review - 3/18/17

I don't know if it's St. Patricks Day giving us some that good old fashioned Luck of The Irish, or just flat out good times to make money that heaved indexes up this week. Either way it was another up week for all the indexes. Although large caps didn't quite participate to the extent small caps did.  

Janet Yellen and her Federal Reserve took another step towards taking rates off historic lows. Don't get me wrong here by any means. Rates are still at rock bottom from a historical perspective. Even if rates follow the Fed's projected path to hit 3.0% by 2019 that's still a far cry from the 10%+ this country saw in the 80's. And let me tell you those hair styles were rocking!!!

 Inflation still remains tame so we still don't see much of a threat for a very quick path to higher rates, and Janet Yellen let us know that was the case this week. CPI excluding volatile food and energy prices came in at a meepish 0.2%. That's not runaway inflation at all and gradual hikes will be the name of the game. So 2-3 hikes a year should be the norm until we hit an upper ceiling.

What might be more surprising to a lot of investors including myself was the sell off we saw in the dollar index. I don't think that means it's bad for the dollar. A lot of people are claiming this is because the Fed gave us a "dovish hike". Whatever. I think people just like to sound cool to make themselves seem important.

I think it's more so of traders unwinding some near term bets for whatever reason. The trend in the dollar still looks up from a longer term perspective. And with the Federal Reserve as the only major  central bank looking to raise rates I can't see why from a fundamental perspective that won't continue.

We received another low Initial Claims number at 241k, JOLTS job openings at a stubbornly high 5.6 million, Leading Indicators at 0.6%, but weak Retail Sales at 0.1% & Industrial Production at 0%. Yes overall things are still going OK.  There are still periods of unevenness.  That's been a hallmark of this economy the last 8 years.  A president that understands business won't change everything overnight. Not in that town.  In fact I'll be shocked if he gets 25% of what he wants accomplished when not even all Republicans are on board with him.

Lastly it ended up being bonds that took the brunt of the beating this week.  The 10 Year Treasury actually ended the week down 8 basis points as traders factored in the aforementioned "dovish rate hike".  


It's a quiet week for the portfolio. Earnings season is all wrapped up and we are just weeks away from finishing Q1.

Some of our stocks are doing quite well, and others not so well. Tis what happens in investing. I like to focus on positives, and here are a few companies that are quietly outperforming the S&P 500 so far this year. That's the way we like it here.

Visit to see more great charts.

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