Monday, April 6, 2015

Bad Econ Data = Good for Stocks

The market could care less about the weaker economic data.  Most of it is made up anyway.  So whatever you can do to get the dollar weaker, the stock market will love.  We are still firmly entrenched in the weaker dollar, strong stocks meme.  So the gap down today was an invitation for rookie bears to get their face ripped off while the fund managers loaded up on cheap shares (well, relative to pre-NFP).  It should be a one-day wonder, as the Europeans will take down their market because the euro is stronger!  The pie is not growing.  If the Europeans like it, then the Americans won't.  Strong dollar is good for Europe, bad for U.S.  It is that simple.  At least till we get through the next couple of weeks, then you'll get the wave of stock buybacks coming back looking to ramp up prices.  

Crude oil looks to be in a bottoming phase, but with the steep contango, going long is treacherous.  Yield curve has been steepening as the bond market has sensed that the economy is not so strong and that the Fed will delay rate hikes.  It should continue to steepen.  

Still want to be an opportunistic short, but today is not that day.

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