Markets are closed for the MLK Holiday.
CASS TRANSPORTATION INDEX REPORT (CASS Information
Systems)
“It wasn’t the prettiest month for the Cass Index, which
means it wasn’t the best month in the freight world. Both the shipments and
expenditures components of the Cass Freight Index marked their lowest reading
of 2019 and took another step backwards in terms of y/y growth…Shipment volumes
dropped 7.9% vs December 2018 levels, as the index posted its lowest
reading since January 2018. It was also the steepest y/y decline since the
Great Recession of 2008-2009. Although there were the same number of working
days in December 2019 and December 2018, some industry participants we’ve
spoken with about the sluggish end to the year cited Christmas and New Year’s
Day both falling on a Wednesday as the reason for soft volume and low
productivity the last week or so.” Report at…
THOUGHT FOR THE WEEK (Raymond James)
“The market advance has continued and momentum remains
strong. While the bullish undertone to the market remains, we would be
selective with new purchases as the S&P 500 is extended. The Index has not
experienced a 1% daily move in three months, investor complacency has set in
(put/call ratio and VIX low), and valuation multiples have expanded to elevated
levels.* As such, we would not be surprised to see a pause or consolidation in
the short term. The intermediate-term technical backdrop remains solid, and
contributes to our view that pullbacks are likely to be light. We view initial
technical support at 3260, followed by the upward trending 50 DMA at 3172 (-4%
from current levels).” Commentary at…
DANGEROUS INVESTOR BEHAVIOR (Heritage Capital)
“This kind of momentum is rare and typically keeps on
going farther than people believe. Often without warning, they clean out the
bulls in one, quick, fell swoop. Sometimes, that resets the bull while other
times, it warns of a complete change in market character. Without doing any
research at all, I remember late 2006 and early 2007 like this. Stocks just
creeping higher and higher and higher. It went on for months, until it abruptly
ended… I have heard from a handful of people who want back in. All of a sudden,
they feel like stocks are going higher and don’t want to miss out. It’s that
kind of behavior, “get me in at any price”, that causes me to worry and lose
sleep.” - Paul Schatz, President,
Heritage Capital. Commentary at…
TRUMP HAD THE RIGHT TO WITHHOLD UKRAINE FUNDS (Gatestone
Institute)
“U.S. Government Accountability Office (GAO) has gotten
the constitutional law exactly backwards. It said that the "faithful
execution of the law" — the Impoundment Control Act—"does not permit
the president to substitute his own policy priorities for those congress has
enacted into law." Yes, it does — when it comes to foreign policy. The
Constitution allocates to the president sole authority over foreign policy
(short of declaring war or signing a treaty). It does not permit Congress to
substitute its foreign policy preferences for those of the president.” - Alan
M. Dershowitz, Felix Frankfurter Professor of Law Emeritus at Harvard Law
School
My cmt: In my involvement with federal budget policy, I
attended a briefing by the head of the Office of Management and Budget (OMB) in
Washington, DC. It turns out that the Presidents have played games with
apportionment in the US for years. If a Representative
(Senate or House) breaks ranks and votes with the other party, funds intended
for his district have been held up (delayed) as punishment. I’ve never heard
anyone claim that this was illegal as has been claimed with Trump. In the
Ukraine case, it is likely that the GAO (Government Accounting Office) is
wrong. I wouldn’t trust accountants for a legal decision.
BTW: Market action suggests a zero chance of Trump being
removed from office.
It looks like we’ll see a dip when the Bollinger Bands
and RSI are both overbought. So far,
that has not happened.
