How Far Away Are We from GAME OVER

Investors have a relatively quiet week for the first week of the 2nd Quarter. On the economic front, we have Manufacturing PMI, the Unemployment Rate, Non-Farm Payrolls and Average Hourly Earnings.

Non-Farm Payrolls & Unemployment Rate:  Non-Farm Payrolls, the Unemployment Rate and Average Hourly Earnings for March are scheduled to be released this Friday (4/6). Should the figure show that the economy created more jobs than expected, or if average hourly earnings jumped higher, we may see the markets go lower as we expect inflation to climb higher and Treasury yields spike higher. The US Dollar would also go lower along with oil on decreased demand. Should these numbers disappoint, the markets may go higher. Additionally, as in previous administrations, spikes in the Unemployment rate or not enough jobs being created will be blamed on the winter weather. In this instance, the multiple Nor’easter’s in the Northeast.

Libor: The news hasn’t been following this enough but LIBOR has risen for 37 straight days, unlike Treasury yields which have recently declined after the selloff back weeks ago. Investors will watch to see if Libor continues to increase considering $300 TRILLION in debt instruments are based on LIBOR. So all those variable interest rates students have on their student loan debt are going to get screwed even more, extending their period to paying them back to way passed when their children go to school.

Start of 2nd Quarter: Monday starts the 2nd quarter after seeing the first quarter saw the first down quarter for the S&P since 2015 ending a 9 quarter winning streak. Investors will watch to see if stocks can rebound after the lackluster quarter.

Manufacturing PMI: PMI readings from across the globe are also due out this week. Traders will watch these readings as potential weak readings could cause central banks to take further steps to stimulate their respective nation’s economies.

Celebrity Apresident: Investors and the world will continue to watch to see who will be the next one voted off of Celebrity Apresident. Last week, it was the head of VA, the last one to resign or be fired. Outside of Gary Cohen, most have not meant anything to the stock markets. However, if we were to see somebody such as the Fed Chair or the newly appointed Director of the National Economic Council, Larry Kudlow, do an about face, markets could tank again.

1,2,3,4 I declare a trade war:   The latest comments from Wilbur Ross have hurt the market as investors await to see what a trade war may look like, and how China may react. If one of those options were to dump Treasury’s and replace them with another currency, its GAME OVER for the US. China has mentioned they will unveil tariffs on US food imports including pork, nuts, wine and fruits, but we will wait to see what may be next. Such firms that export from the US these respective foods will see their stocks affected negatively.

Easter Monday: Markets are closed in the Europe Monday (4/2) for Easter Monday. The US and Canada will reopen as banks in the US follow a depression era law (another dumb law that hasn’t been updated in forever, shocker) that states that banks cant be closed more than 72 hours in a row. Banks in Europe will be closed for a 4-day weekend. If you live in Norway, for some reason, you get a 5-day weekend. Outside the exorbitant high taxes, let’s be like Norway.

Tomb Sweeping Day: This week’s unusual bank holiday comes to us from China. On Wednesday and Thursday (4/3 & 4/4) (2 days???), Chinese markets are closed for Tomb Sweeping Day. So as you sit at your desk wishing for a bank holiday, here is one that has a custom of (besides the obvious of cleaning a tomb) flying a kite.

 

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