Well, it’s a short week, but it will be filled with all the typical shenanigans that seem to dominate headlines, even when it’s much ado about nothing or outright attempts to diminish public optimism.
All weekend, I read where Nancy Pelosi’s insults toward President Trump were brilliant political tactics that get “under his skin.”
I’m not sure why the Speaker of the House would make that her goal, or why her cheerleaders in the national media would encourage such nonsense calling President Trump insults – it’s a sign of poor character and frustration.
In any event; right now, it means less will get done in Washington, D.C., which isn’t always a bad thing, but when there are potential deals that could move the economic needle, it’s disappointing.
The 115th Congress, which began January 2017 through January 2019, enacted 442 public laws, the most since 110th Congress (2007 to 2009).
The 115th Congress was GOP-led and got a lot of things done. Now, the divided government has only gotten 15 public laws through and seems doomed to the sidelines, as the media cheers on a name-calling contest.
Divided Government & Demise of Political Elites
Belgium’s ‘Black Sunday’ sees far-right surge, threatens new government crisis
Belgium’s “Super Sunday” of elections was marked by a distinct shift to the extreme-right in the more prosperous Dutch-speaking Flanders region while voters in French-speaking Wallonia gave leftist parties a clear win.
-Euractiv.com
EU Parliamentary Election
The “Black Sunday” headline says it all - globalists and political elites see voting outcomes across Europe as catastrophic setbacks instead of long overdue indictments of their control over the government and industries that have yielded nothing for the masses other than fading glory and ruinous status quo.
Recommended
In the United States, the media is working hard to make the European Union (EU) election outcome appear to be a setback for center-right and populist parties. It’s a shame. Not only is such disingenuous reporting insulting, but it also adds to the demise of those in charge that have abused their power or simply discounted the masses.
The elites suffered big time while the center-right to the far right won big:
- Italy: The Salvini Party won 33.6% of the vote from 6.2%
- UK: The Farage and Brexit Party won 31.7%
- France: Le Pen won 23.1%; the Macron Party won 22.4%
- Hungary: The Orban Party won 52.1%
- Spain: Socialists won 32.8%, but center-right parties won 20.1% and 12.2%, while the far-right Vox Party won 6.2%
- Poland: Law and Justice party crushed rivals winning 45% of the vote achieving the best-ever showing for the right-wing Party
In places where center-right parties didn’t win; other green parties or socialists saw big gains. The bottom line is the same old parties were kicked to the curb. It’s an idea that’s gained traction all over the world, and it’s not going away anytime soon.
China Economic Data
More economic woes are affecting China, where industrial profits plunged, especially among state-owned enterprises (SOE). The SOE industrial profits were -9.7% in the first four months compared to 2018.
Meanwhile, China has ordered the takeover of Baoshang Bank. This is the first government-ordered takeover of a bank in China in two decades, coming on the heels of the disappearance of a billionaire banker.
Perhaps it’s a one-off, and it’s reflective of a banker that got in over his head, as this is a young bank (founded in 1998) with a small number of deposits ($83 billion). On the other hand, it might be a dark omen for a banking sector besieged by shadow rivals and mountains of bad debt.
Domestic Economy
I’m surprised the Atlanta Fed didn’t lower their second quarter (2Q19) Gross Domestic Product (GDP) estimate to less than 1% after that disastrous durable-goods report. JPMorgan (JPM) didn’t hesitate to lower its outlook to 1.0% from 2.25%.
I know many want the Fed to cut rates to goose a strong economy. However, if they cut to stave off weakness, would the market still cheer?
Yes, but it shouldn’t.
Portfolio Approach
We have some dry powder and we are eager to use it.
Communication Services | Consumer Discretionary | Consumer Staples |
1 | 3 | 1 |
Energy | Financials | Healthcare |
1 | 2 | 1 |
Industrial | Materials | Real Estate |
2 | 3 | 0 |
Technology | Utilities | Cash |
3 | 0 | 3 |
Today’s Session
The Case-Shiller 20 city index for March increased just 0.1% from February. Year over year, it is up 2.7%, which is slowest since August 2012. The silver lining is that it helps buyers looking to enter into what has been a hot market. Las Vegas, Phoenix and Tampa were the hottest areas, however prices in Las Vegas and Phoenix are still down about 20% from the 2006.
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