Daily action is disconcerting for the Bulls, even with a forecast rebound in the S&P (SPX). That’s in part because the concentration was Oil stocks and rebounding FANG stocks, without Financials participating, writes Gene Inger.
We see weakness in Financial Services, not just Banks, and Insurance companies too and saw consecutive 12 days of losses, which I believe is a record. It’s no matter; as we’ve warned of rather enthusiastic financial or bank analysts, having no basis for their optimism. Of course, better sustained times for the sector will arrive, but not as yet.
Aside Oil and FANG rebounds, Tuesday’s session was nothing more than the normal rebound we looked for, after a bit of a washout late in the first hours of trade on Tuesday. The White House moderated interpretations of its tariff stance and that helped too.
For Wednesday, barring more trade shocks, additional upside attempts at this point appear likely, but caution needs to be maintained.
One reason is not the fear about the yield curve many cite. It’s Oil prices, which rose over 70 need to hold these levels which can become dicey considering anything over 70 is a bonus. It’s a bonus related to geopolitics (and the Iranian sanctions that offset Saudi production hikes qualifies as geopolitical) rather than supply/demand imbalances.
U.S. gives Disney approval to buy Fox Wednesday amid bidding war with Comcast: Reuters.
View a short video interview with Gene Inger on his stock pick: LightPath Technologies (LPTH) here
Recorded at MoneyShow Las Vegas: May 15, 2018
Duration: 6:28.
