I’m still working out the sound in my new Skype studio. It’s always a work in progress, as is the market when you get near a time of great change.
Jen Rogers goes though my playbook for the rest of the year. It’s pretty simple. We were more cautious earlier this year when expectations were way too high, in my humble opinion. It didn’t make sense that the trade war would just go away. Now that this has sunk in, along with an inverted yield curve (a boogie man that is misunderstood by many, studied by few) expectations have dropped considerably. So, play the crowd.
Manufacturing is way off because of uncertainty on trade (hey, we assume is the cause, don’t ever be certain) . If we get a trade deal or the concept of a trade deal aligning with a decent earnings season (should be a lot easier when the estimates go down), people as usual will probably overreact and say those magical words that it’s different this time. Well, it’s always different. We will see in the end how all this pans out, but just know that the math is always clear - statistically bailing out of stocks after an inversion is a bad idea, but that assumes you have a well diversified strategy and not simply the hot stuff at the time.