Deflected repeated fades dominated this Ides of March session Thursday. Several stabs tried to knock the market off of its perch. Each was absorbed with persistent buying of the big-caps essential to hold the market together, says Gene Inger of The Inger Letter.
It remains that the FANG plus Boeing (BA) leadership controls the market’s fate, while they gently try to roll-into less overpriced issues (like utilities, or some healthcare, or even the REITs). The latter is riskier than some, but really what you see are portfolio managers afraid of other shoes yet to drop, and of course the prospective penetration of the defense zone.
Obviously everyone is trying to avoid buying retail, industrials, or any of the myriad of issues now potentially in the trade/tariff cross-hairs.
So meanwhile, if this market were Caesar, he still reigns. But perhaps a bit like political chaos in Washington they pretend doesn’t exist. All this again is reemphasized by the New York Times article Thursday suggesting a subpoena of Trump business documents related to anything involving of course Russia. (He did authorize exploration of a Trump Tower deal to be built in Moscow back in 2015; but digging into that might cross his red line that might open the way to dismissing Special Counsel investigations, which itself would open another Pandora’s Box of woe.)
So like a funny thing happened on the way to Pompeii, it’s vague as to whether this Caesar of a market can be knocked of its pedestal easily. It sure is fighting to maintain its rule.
But if it falls, there will be another of the Caesars; the reign might come within a truly distressed backdrop hence sometimes it may be wiser to be careful what you wish for than to dethrone Caesar. For all the opposition, even though some has merit.
Of course the allusion is to the political aspect that weighs on markets. It remains that in the economic realm, the leadership aims at American as well as global growth; but not at the expense of more lost U.S. jobs. Not for me to assess the politics of it; but from a market perspective there is almost always resistance against changing the economic status quo.
In-sum: the market remains erratic. They keep thrusting daggers into Caesar, but Caesar’s reign persists from a macro perspective. It has been progressively weakened ever since January’s parabolic upside that I labeled as an unsustainable thrust breaking by early-mid February.
Then came the rebounds, expected to struggle once we got above S&P 500 (SPX) 2750 and incredibly they still do. But Caesar is wounded; and as the dominant leader stumbles along, the quality of rallies deteriorates.
It also occurs simultaneously with a ragged winding-down of Spring rallies, and argues for a (mortal?) Spring break in its wake.
