3 January 2018: The Big Question for 2018

Some say that the US economy is going better than anyone ever dreamed, because companies are coming back to the US, stock markets keep hitting all-time highs, and jobs are kicking in. Business sentiment is indeed soaring, pushing the stock markets up and up and up. And jobs are indeed kicking in and will continue to do so, as long as many workers need to juggle two or three jobs to make ends meet. The daily reality for these workers, who form the bottom 60% of households, is less alluring. All of them combined own just 1.8% of US stock, whereas the top 1% of households, by contrast, own more than 40% of the country’s stock (source: The Chicago Tribune). As a result, they don’t benefit directly from the stock market’s record highs — if at all. The Big Question for 2018: will trickle-down economics benefit the lower classes, or anyone but them? Depending on the outcome, we might see either a prolonged economic boom, or a period of economic downturn and political unrest the likes of which nobody’s ever seen

white-chapel-logo-smallUS markets kicked off the new year in style. Solid gains in the consumer discretionary and energy sectors, combined with optimism over US tax cuts and a weakening dollar, put investors in a good mood. The Dow closed 0.42% higher, the S&P 500 gained 0.83% and the NASDAQ rose by 1.50%. Both the S&P and the NASDAQ notched closing highs yesterday, the latter closing above the level of 7,000 for the first time. Volatility eased again. The VIX slid back down into the single digits, closing at 9.77, a drop of 11.50%. UVXY ETFs lost 7.44% of their value on the first trading day of 2018. XIV ETNs posted a gain of 3.16%.
Danny Daredevil started off the new year on the wrong foot. As he holds UVXY ETFs in portfolio, his RSS dropped by more than 7 percentage points to almost -6%. Adventurous Anny´s RSS remained at 23%, as she is still holding cash. Solid Suzy and Lazy Larry posted the best results on this first session of the year. Their RSS rose to 108%.
None of our models gave a trading signal at the end of yesterday’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

-5.60%

-7.44%

-7.44%

-3%

Adventurous Anny Cash 6 March 2017

22.91%

0.00%

0.00%

28%

Solid Suzy XIV 6 March 2017

107.99%

3.16%

3.16%

142%

Lazy Larry
XIV 6 March 2017

107.99%

3.16%

3.16%

142%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

The Chapel Family – Episode 15

“Oh Danny, I missed you so much!” Danny tries to disentangle himself from her arms but Anny firms her grip. “Where have you been all the time, Danny? Don’t you ever do that to us again!”
Danny smiles but stays silent. His phone rings. As he grabs it from his pocket, it slips from his hand and clatters to the floor with a loud, metallic clank. Anny opens her eyes and finds herself on the couch, staring right into Suzy’s face.
“What just happened?”
“You dozed off, Anny. Then your phone rang, and while you moved, it fell on the floor.”
Anny picked up the phone and checked the display. The missed call was from Danny.

 

Photo of Ronald Reagan by White House Photo Office; Originally uploaded to Wikipedia by Happyme22 [Public domain], via Wikimedia Commons