- where to go;
- the Egypt effect; and
- where to get back in.
Lots of Places to Go Posted at 11:32 a.m. EDT on Friday, July 5 Trying to bet on the strength of the American economy without betting on rising interest rates has become an impossibility for the moment. You get good jobs numbers and that means interest rates fly, which means housing stocks get hammered until we see if people still buy homes if mortgage rates go to 5%.
So what do people do? They have lots of other places to go besides housing and they are going to them. First, they are going to banks because of the net interest margin hope (it won't be this quarter, but people are willing to look forward). They are going to aerospace. They are going to autos. And they are going to consumer spending, which is a little odd because that had been linked to housing, but now seems to have disentangled. But you have to stick with those groups as the 10-year struggles to find its level on the next piece of data because I do not believe this jobs number can take us past 2.8%, let alone to 3%.
Egypt Is Ancient History Posted at 2:51 p.m. EDT on Tuesday, July 2 Can we stop it with the gibberish about Egypt? The military has played a positive role there historically, not a negative one, and the current government, whether President Obama likes it or not, has not been pro-American. Sure, oil is flashing that perhaps the Suez is closed -- and I don't like a spike in oil -- but it seems almost ludicrous that the market wouldn't like this change. There's been nothing but turmoil in Egypt for months, it just has finally hit the headlines.
What matters to me is this: So many are trying to interpret this market through the Egyptian lens that it becomes a fait accompli, but it shouldn't because there is no definitive link to the market at all.