Many were hoping that we would see a rebound today following Tuesday’s sharp selloff in the U.S. equities market but, unfortunately, news out of Canada seemed to squash early confidence that today would find investors in a buying mood.
Just the opposite, it appears.
First of all, let’s point out that things might not be as bad as what is being portrayed on business news channels … where a goal appears to be, at times, to strike just enough fear that you won’t dare change the channel ( “If it bleeds, it leads!”). Not only was the ISM non-manufacturing index better than expected … but I started to look into the market collapse of the last few days and saw both the Dow and S&P moved all the way down to levels not seen since … since … November 23rd … less than 2 weeks ago!
On Tuesday … and I will might get in trouble for sounding political … the President put out an unfortunate tweet with regard to China, calling himself “Tariff Man!” Traders immediately seemed to push the sell button (also known as “the WTF button”) as it was viewed (in my opinion) as the complete opposite of our one-time stated strategy of “speak softly but carry a big stick.” The new view might be “we have a big stick and aren’t afraid to swing it.”
So what happened in Canada?
A Chinese firm called Huawei is a major player in smartphone shipments and is looking to take a leadership role in 5G. The firm has been accused of violating U.S. sanctions against Iran. An executive of the firm (the CFO who happens to be the daughter of the founder) was arrested … while changing planes … in Canada and faces extradition to the United States … a move Bloomberg classifies as “unprecedented.”
And the reporting on this happened just when the recently-announced negotiations between the U.S. and China reached an boiling point thanks again, in part, to the Tariff Man claim.
Unfortunately, emotions appear to be dictating investment decisions at the moment though … when this happened historically people … in hindsight … often found it better to have a seat belt than a parachute.
My final note for today … I just had to add this … is that early studies are showing an increase in marijuana legalization leads to … more babies! I’m just the messenger on this one … but I could only think of one reason (though I haven’t been asked) why more marijuana use might lead to more kids.
Maybe people are just too stoned to run out to the drug store.
Have a great day,
Joseph G. Witthohn, CFA
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905
… as of 11:11 AM today …
Quick Look at the News
Much has been written about how millennials are killing the economy ... but is this fair? Or is it the economy that is killing millennials? (TheAtlantic)https://www.theatlantic.com/ideas/archive/2018/12/stop-blaming-millennials-killing-economy/577408/
... but it is not only the economy that some look toward as causing ill health ... one culprit could be too much sleep ... something many of us yearn on a daily basis (CNN)https://www.cnn.com/2018/12/04/health/sleep-duration-linked-to-death-and-diseases-study-intl/index.html
Health, it seems, is on everyone's mind of late ... but for one group ... the U.S. Army ... the increase in poor health is a concern for reasons of national security (FastCompany)https://www.fastcompany.com/90276144/the-u-s-army-is-cracking-down-on-potential-recruits-who-cant-pass-the-fitness-test
... although some countries outside of the U.S. are viewing too much sugar as a health issue ... and taking steps to reduce consumption (StraitsTimes)https://www.straitstimes.com/singapore/health/how-other-countries-are-tackling-high-sugar-consumption
Jumping back to millennials for a moment ... a group of "for-profit" colleges are closing ... and the student loan burden? That remains to be seen (USAToday)https://www.usatoday.com/story/news/education/2018/12/05/virginia-college-brightwood-college-and-others-abruptly-shut-down/2221650002/
When many think of Denmark, they think of a pro-environment stance, freedom of thought ... and Legos! But Legos are plastic and certainly not an environmental friend. Is a solution at hand? (MakeChange)https://www.makechange.aspiration.com/articles/2017/10/30/building-a-fossil-fuel-free-future-with-lego
It is easy to be hated ... and I suspect one professor is about to find this out. There is a new study claiming we should only eat 6 french fries at a sitting ... something many view as impossible (6ABC)https://6abc.com/food/6-fries-at-a-time-for-proper-portion-professor-says/4830110/
... meanwhile ... there is concern that our population is "aging" ... but this might slow as a claim is that marijuana legalization (on the upswing) leads to more babies. Hmm ... (CivilizedLife)https://www.civilized.life/articles/new-study-says-marijuana-legalization-leads-to-more-babies/