US stock markets went down in the first part of yesterday’s trading session and went back up after lunch time. Stock prices are at a very high level and even the thinnest slice of doubt can bring the markets down in such a situation. In the early hours of trading, investors were under the impression that Senate Republicans indicated they would delay a cut in the corporate rate until 2019, as opposed to next year, as proposed by House Republicans. But around lunch time, it became clear that such a delay will probably not take place. So, stock prices started to move up. It is very likely that we will see more of such an elevator-like pattern in the upcoming weeks. Investors are unsure how to interpret the high level of stock prices at which we are at and whether or not policy makers can deliver.
US stocks closed lower Thursday in their worst session in two weeks on worries over the uncertainty surrounding a possible delay in the much-anticipated corporate tax cut. The S&P 500 fell 0.38%, the Dow lost 0.43% and the NASDAQ was down more than 0.50%. Volatility was on the rise: the VIX left single-digit territory and gained more than 7%. UVXY ETFs closed 2.6% higher and XIV ETNs went down 1.3%.
Danny Daredevil was yesterday’s winner. His RSS rose to above 26%. Adventurous Anny is still holding cash. Solid Suzy and Lazy Larry had to take a step back. Their RSS dropped to 67%.
None of our models gave a trading signal at the end of yesterday’s session.
RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return
Meanwhile in Japan
René’s Reflections @ Friday: Worlds apart
5:30 PM on an average weekday in the city center of an average city in Japan.
The sararīman, waiting for the traffic light to turn green. He is holding his bag firmly against his body, as if it contains his company’s most confidential information. He has left the company building, but his working day is not done yet. He is on his way to some local bar to meet his boss and some colleagues for nomikai. Depending on his boss, he will have dinner with them, or be late for dinner at home. His wife and children don’t see him that much during working days. It mostly comes down to the weekends, that her husband is available for family matters. On working days, he usually comes back home late, and wants to sleep after taking his ofuro. A couple of hours of sleep is all he can get, before his alarm clock catapults him into a new, long working day. He sees the gaijin, standing at the other end of the zebra crossing. A Japanese woman at his side. He notices that the gaijin is taking a picture, and wonders what could be interesting here to take pictures of. As far as he is concerned, landscapes and family outings are subjects for pictures. But city streets…
Then the traffic light turns green, and the whole scene comes into motion. Reveries evaporate instantly.
Two worlds. And never the twain shall meet…