Thoughts {10.16.15}
Aujourd'hui, nous sommes tous les Parisiens!
The are other and better places to comment on the horror we all witnessed Friday evening and that is not the bailiwick of this blog anyway. My mandate is to discuss things in the financial realm and for the most part that is what we do here. The French have now had their 9/11. It remains to be seen what they will do with this and how they will react to this moment. The geopolitical aspects of this event will be slow to emerge and may not be completely understood for years but the world has been tilted on its axis again I think, just as it was here after 9/11. There are longer range potential implications to these events but we will not be able to sniff out these clues for some time.
In the short-term, stocks are set to open here flattish after a pretty good drubbing last week. We tested resistance at the higher end of the markets range a few weeks ago and fell back. {I will show that chart tomorrow.} We were already oversold Friday so that may mitigate the reaction on the open and today.
As horrific as Friday's events were, the world will move on today. As crass as this may sound, the events of Paris will not have any bearing on how many cups of coffee Starbucks sells, diapers Procter and Gamble sells or iPhones Apple sends out the door. That is the grim reality of the world. The dead, rightly honored and mourned, now belong to the past. Markets look towards the future. In the cold calculus of money, Friday's events, while horrific and tragic, probably aren't enough to affect the short economic calculations here in the US. Unless we have an economic event that changes this equation, we think markets will continue their meandering ways. That could change of course as the facts change but we need to go with what we see today and last weeks events for the most part will not have a bearing on the overall economic well-being of the US. As such we think stocks are stuck in the same trading range we've been discussing since last summer but Friday's events make it more probable that the high end of the range is capped.
"Play La Marseillaise. Play it!"
As horrific as Friday's events were, the world will move on today. As crass as this may sound, the events of Paris will not have any bearing on how many cups of coffee Starbucks sells, diapers Procter and Gamble sells or iPhones Apple sends out the door. That is the grim reality of the world. The dead, rightly honored and mourned, now belong to the past. Markets look towards the future. In the cold calculus of money, Friday's events, while horrific and tragic, probably aren't enough to affect the short economic calculations here in the US. Unless we have an economic event that changes this equation, we think markets will continue their meandering ways. That could change of course as the facts change but we need to go with what we see today and last weeks events for the most part will not have a bearing on the overall economic well-being of the US. As such we think stocks are stuck in the same trading range we've been discussing since last summer but Friday's events make it more probable that the high end of the range is capped.
"Play La Marseillaise. Play it!"
*ETFs in which we have investments likely hold positions in Starbucks Procter and Gamble and Apple.
posted by CR English at 8:22 AM
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