Don't Get Sucked in, ChiefYou're riding to work on Monday with stock futures higher and the headlines reading that since the U.S. and China are talking on tariffs the all-clear sign to buy equities is flashing. Dare we say that no bombshell revelations from Stormy Daniels' interview on 60 Minutes Sunday evening is positive for the market? After a month of increased chaos in the White House that has led to more volatile stock prices, don't be so quick to shrug off how a lightning rod like Daniels could have brought more headline-driven weakness to equities. But one shouldn't immediately jump back into his bullish mindset. There has been real damage done to the market that must not be ignored. After all, the S&P 500 has shed 7% in the past 10 sessions. Jefferies offered up some deeper reasons behind the March selloff: "Firstly, the rapid widening in the TED spread - interbank rates minus T-Bills - has caused an accelerated liquidation of speculative positioning. The cost of borrowing money in the financial markets has climbed forcing marginal trade positions to be liquidated in our view. Secondly, although it would be easy to blame Treasury Bill issuance on the yield curve flattening, however the 10-year yield has actually declined and failed to reinforce the reflation trade." The rising cost of money (thank you Federal Reserve) and liquidation of speculative positions is a trend unlikely to vanish in the short-term. It's one among several reasons why hot tech names such as Netflix ( NFLX - Get Report) and Action Alerts Plus holdings Apple ( AAPL - Get Report) , Amazon ( AMZN - Get Report) , and Alphabet ( GOOGL - Get Report) have come back down to Earth of late. It's not all due to Facebook's blowup, people, there are more market forces in play. Stay disciplined right now or risk getting your face ripped off, especially during this week's light economic calendar.
Facebook Stock Tracker
We have good news to report: As of 6:41 a.m. ET shares of Facebook (FB - Get Report) were up slightly after taking a 14% beating last week. Guess those newspaper ads CEO Mark Zuckerberg launched on Sunday did the trick. PSYCHE! Facebook's stock is poised to easily reverse course as the outcry from public and government officials grows even louder. It's that simple when it comes to a momentum name such as Facebook, an Action Alerts Plus holding. The company will have to put forth some form of positive financial news (we suggest to Zuckerberg that he pre-announce first-quarter earnings and share an upbeat full-year forecast) to halt the stock's slide. Until then, the market will continue to brace for the worst ... and the worst is a social media stock worth much less than a 14% haircut in five days.
Around the Horn
(1) TheStreet's founder Jim Cramer will host a HUGE call with members of his Action Alerts Plus club on Monday at 11:30 a.m. ET. You need to be on this call if you want to survive the stock market this spring and summer. Join the call here. (2) Hat tip to Vanity Fair for getting exclusive time with the reclusive CEO of Sears Holdings Corp. SHLD, Eddie Lampert. Overall, yours truly -- a hardcore critic of Lampert going on 10 years -- came away with renewed confidence this storied retailer will be gone very shortly. Lampert comes off as generally clueless, preferring to run a value name like Sears from his Greenwich, Connecticut mansion or from his yacht. This is while he continues to drive the liquidation of both the Sears and Kmart chains he merged in 2006 and in the process bleed jobs. Shame on yor Eddie Lampert. I reiterate my invitation to Lampert, first extended in 2014, to publicly debate me on his handling of Sears. Since my role has changed since then (analyst turned journalist), I would love to have Mr. Lampert on my morning show. Our office is across from the New York Stock Exchange, Ed.
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