We got the jobs report and it was mixed, reflecting a complex economy. The number is important, but even a “good” report would not have altered impressions of economic reality versus the perception of the economy. There is a major gulf between the data that keeps pointing to better conditions, and your emails and your tweets stating that things are horrible (and getting worse). More often than not, most of you are telling me and pollsters that you are okay; however, that empty feeling in your guts comes from the overall direction of the nation. In other words, your world is getting better, but you realize this is not the America of the past, or the nation you dream of for your children. Nevertheless, making us feel this way more than the tepid nature of the recovery is other news.
According to a report, 86% of investors cite geopolitical risk as a problem for the stock market. I would add to this that there is an uneasy feeling that our government does not have the game plan or stomach to manage the spike in global hotspots. So, it is not the economy per-se causing so much angst and fence sitting. In fact, according to Gallup, 71% of Americans say the most important problems we are facing are non-economic issues.
The thing is, we continue to live life, go to the malls, eat, travel, and even buy new dress shirts and ties. One of yesterday’s biggest winners in the market was Phillips Van Heusen, who owns Calvin Klein and Tommy Hilfiger. In fact, several names directly linked to the middle-class saw their shares soar: Costco, Amazon, and Mattress Firm.
I must say, this woe-is-me atmosphere is deadly, and is preventing many people from making investment decisions that could be life changing. I understand the lack of conviction, and it is true that there is a giant void in leadership, but if you shopped at Costco or ordered something on Amazon within the past week, it is time to consider how to get some of that cash back. Sure, it is anecdotal, but there are serious consequences with sticking your head in the sand and living out a scenario that has yet to occur. Moreover, I do not know where the ISIS crisis goes, and I think Russia and China will be larger issues in the future. However, I read yesterday that of the 16 major geopolitical crises since 1950, only four times did the market finish that particular year lower. We have to take it day by day, but do not let your perception become reality as this does not have to be the case.
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