Market Pulse: Talk, talk, talk
One would think the trade negotiators long ago ran out of positions to discuss. Apparently not, so they meet and talk, then meet again and talk, talk, talk.
So far to no end, at least none disclosed. That’s not to say there hasn’t been any progress. I’m sure there has been. Protecting our intellectual property is the stumbling block now, we’re told. That could be an insurmountable obstacle.
There is plenty of talk on Capitol Hill, too, in the form of self-serving speeches. Members of Congress would better serve their constituents and the country by discussing policies and proposing legislation to address important concerns, such as immigration, but there is none of that. And there won’t be any until 2021, if then.
Wall Street has its own talkers — market strategists and analysts, many of whom appear on CNBC and Fox Business day after day. Few have been very bullish, few particularly bearish. Most foresee a sideways market, give or take a little, and that is, for their reputations, a safe approach.
I needn’t list all the potential problems that could undermine stock prices, at least temporarily. There are always some. A few are obvious. The growing Treasury debt and annual deficits are two. Tariffs and Iran are two more. The investigations and confrontations in Washington, while not factors for stocks, are front and center most days. But it seems that trade and tariffs are always dominating the news.
While we are told every day that the ebb and flow of trade prospects explains the market’s swings, that is a convenient explanation. Who is to say where the market would be had there been no talk of trade matters at all? Maybe here. Stocks had risen 17% since New Year’s and 26% since Christmas. Profit-taking was certainly overdue.
I believe that had all gone well with the trade talks, there still would have been some selling. We’ll never know.
Skeptics believe this year’s rally is a snap back from the brutal fourth-quarter selling and I understand why some see it that way. I just don’t agree that nothing else is involved, not earnings, not growth, not dividends. They are very much involved.
There are compelling reasons to be a stock investor, especially given today’s low interest rates, good yields and especially the unattractiveness of alternatives. That’s a familiar story you’ve been reading here for years. And you will read it again.
David Vomund is an Incline Village-based fee-only money manager. Information is found at http://www.VomundInvestments.com or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial adviser before purchasing any security.