Saturday, June 10, 2017

TLH Market Review 6/10/17

This week was not dull by any means. Between the now seemingly endless charade of "He said, she said, they said, I don't know who said", on Capitol Hill, the Brits that can't catch a break, and the huge rotational move in equities we witnessed Friday.  Yep that's a lot to swallow in just a few days.  The markets don't even seem concerned about next weeks Fed meeting where it's all but certain we'll see another rate hike, yet the bond markets have seen yields trend lower at the long end recently.

As the world goes a little more haywire in every direction the market just keeps going up inch by inch.  Of course the Nasdaq took a big hit to end the week as it took a 1.80% drop on Friday, and -1.55% for the week.  I think that's more just a symptom of tech stocks having such a big rally this year.  The Technology Sector SPDR(XLK) was up over 19% YTD before Friday's pummeling.  That's the best performance of any sector by far.  Most of the technology sectors gain has come from the heavyweights such as portfolio member Facebook(FB), Alphabet(GOOGL), Amazon(AMZN), and Apple(AAPL) as each are up over 20% YTD with Amazon & Facebook both clocking in 30% moves despite Friday's pullback.
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However the S&P 500 only saw a drop of 0.1%. That's measly, but it's mostly because the heavyweight energy and financial sectors actually received a bid.  Every major index hit new all time highs intraday Friday morning before the pullback began in tech.  I think we can finally expect some choppiness, and that brings the possibility of a few names getting accidentally cheap so keep your eyes open if you've been waiting.


The portfolio has been doing quite well lately, which I'll admit is easy when everything is going up.  There are a few laggards such as  Hain Celestial(HAIN) & Boston Beer(SAM) as both are down 10% and 19% respectively.  Speaking of Hain it should be just about any day now they'll report their financials for the last year. If you recall the company was caught in a scandal where the uncovered improper revenue recognition. Back then I decided to sell part of the position from the portfolio under the old accounting method.  In hindsight I should have removed the company entirely from the portfolio.  Either way I think once we get some fresh news the shares will pop as it's been under selling pressure ever since.  It's been extremely tough to hold through all this. Boston Beer has been slumping as it struggles to compete against the never ending gusher of micro-brewery's that open every day.  There's only so much beer consumption a person can do, and when their options keep expanding they'll spread the love around.

Two strong performers have been Paypal(PYPL), and very quietly Phillip Morris International(PM) which as of Friday's close are the portfolio's best performers YTD with 35% & 31% gains respectively. Both of these sectors have done well for the portfolio which is undoubtedly overweight in each.  Still not to be left out another company beginning with "P", Praxair(PX), has finally caught a bid as it's merger with Linde AG gets closer to consummation.  The stock is up 16% YTD after lagging in 2016.

Next week we get the Fed meeting and rate hike decision.  Unless the Fed decides to not raise rates it should come as no surprise to investors.  However how the market reacts is anyone's guess. And considering Friday's action we could be in store for some interesting price movements. 

  • Nasdaq Composite +15.3% YTD
  • S&P 500 +8.6% YTD
  • Dow Jones Industrial Average +7.6% YTD
  • Russell 2000 +4.8% YTD

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