So, what do ya think? Be honest now. Nay, go further if you wish; as Roger De Bris, resplendent in a dainty evening gown, implored Max Bialystock and Leo Bloom, before accepting the directorship of “Springtime for Hitler” in the classic Mel Brooks farce “The Producers”, be brutal.
Of course, I could’ve bypassed these proceedings entirely, but as I see it, if you’re going to have a company, common decency requires that you have a logo, right? Unless, of course, you’re a stone cold baller enterprise like Goldman Sachs or Morgan Stanley (who long ago reached a state of fabulousness that what passed for a logo in those realms is nothing more than the corporate name in block letters), it is simply de riguer. And let’s not kid ourselves here: General Risk Advisors, LLC, whatever its merits and shortcomings may be, cannot be mistaken for either Goldman Sachs or Morgan Stanley.
So we set about the task of creating the visual symbol of our brand, understanding the need to make some sort of graphic statement that extends beyond the protocols established by the aforementioned bulge bracket crowd, but desiring to stop short of the busy bursts of color and shape of, say, the Cadillac logo, which may work fine for them, but which, in the context of our scholarly endeavors, might bring to mind images of a jello fruit salad with too much fruit and not enough jello:
Hopefully, you see my point.
Ultimately the decision devolved to my team, and, having ordered and paid for business cards, it is now inarguably to late to change course. But I do want your opinion(s), that, is, if you care to share them.
I’m not sure what message we’re trying to convey, but the handheld mirror or magnifying glass bursting forward with a pleasing sequence of upwardly sloping graphical bars, crossed by a rising convex arrow intended to reinforce the heavenward climb. can perhaps be tortured into something akin to the following. It’s our desire to hold the glass in front of our clients, with the inexorable result being a surge in their performance. I won’t be held to this implied promise, but hey, stranger things have happened.
Again, it’ll have to do, but if you wish to share any private thoughts, you know where to find me.
One way or another, format changes do not in anyway alter the mission of our weekend musings, which remains our attempt to make sense of current market conditions, with a particular eye towards identifying potential points of hazard and opportunity along the way So we may as well get to it.
As we left off matters last week, and though I was a little coy about conveying these feelings, I rather thought that the equity markets at any rate were poised for a breakout from current entrenched positions. As I’ve repeatedly conveyed in these pages of late, I’m not overly trusting of the markets at present, but have felt that the most unstable characteristic that they’ve shown is the stationary pricing of indices, especially the Gallant 500, which though knocking on the door of another handle, has now gone three full months without a single print that did not begin with the number 23. I know this can’t last, and, if I’m right, then it follows that Mr. Spoo must either climb higher, or retreat to lower elevations.
I’m still betting on the former, and, for the record, the SPX did indeed close at an all-time high on Friday, and came within less than a point of breaching the 24 handle. But its attendant path can hardly be described as a breakout. In fact, it’s gain for last week amounted to about 70 skinny basis points.
I suspect, for a number of reasons, that the 24 wall will come tumbling down as early as tomorrow, and that the 500 could do some open field running from there. Among other matters, the risk premium should by all accounts manifest some deflating, as driven by:
• Presumed favorable outcomes in the French election.
• Some movement on Health Care Reform out of Washington.
• Blithe, encouraging verbiage, and NO action, at this past week’s FOMC confab.
• A lead-filled pencil of an April Jobs Report.
• Purposefully leaked rumors of some sort of Led Zeppelin reunion tour.
OK; feel free to ignore the last of these, but the penultimate bullets should merit attention. The Bureau of Labor Statistics did indeed bring glad tidings on Friday, checking every box, including Non Farm Payrolls, Base Rate, Labor Participation Rate, Average Hourly Earnings, etc.
In addition, it’s hard not to be impressed with the earnings sequence, which now more than 80% complete, projects out to a 13.5% year over year gain. Yes, Mr. Cook is having a difficult time moving those I-Phones, but this disappointment is arguably overwhelmed by the glad tidings from Serge/Larry, Musk, Zuck, and a host of others. And boy oh boy that Bezos! What can one do but marvel at his wizardry?
So we’ve got corroboration that after a rather stormy winter, the private economy may indeed be heating up,, interest rates remain ridiculously low, the non-Fed Central Banks are printing as furiously as ever, and even the World’s Greatest Deliberative Bodies are showing that they are capable of at least a modicum of deliberation. Imagine if they really get their acts together and pass tax reform. Those magnified bars on our logo are likely to jump right off the page at us.
Now, I don’t want anyone to mistake the immediately forgoing comments as some sort of political view, as whether or not the policy path sponsored by the party in power may or may not be a sound one. I’m just referring to the market implications of them getting these things through, which I believe are unambiguously positive.
Again, if the market’s gonna move, as I think it must, I think that it is more likely to rise than fall. And if we needed any additional proof of the traction embedded in our grand domestic economic engines, we may need look no further than to the Atlanta Fed’s GDP Now forecast, which, it must be remembered, was deadly accurate in foretelling weakness in Q1. Well, it’s now Q2, and here’s what the Atlanta boys and girls are seeing:
It’s early days, yes, but the Georgia economists are at 4.2%, and my feeling is that if they’re right, then we could be looking at a 25 or 26 handle on the SPX by sometime this summer. Then, if you dare, consider the additional, bullish prospect of Plant, Page, Jonesy and Bonham the Younger storming these shores like only they can. Under these circumstances (and sorry to do this to you, folks), valuations could truly climb a Stairway to Heaven.
As always though, there are caveats. For one thing, Georgia Governor Nathan Deal may be on the verge of expanding the state’s pilot plan for the legalization of medical marijuana, evoking the possibility that maybe the Atlanta Fedsters did some early celebrating. In addition, there’s a rather worrisome drop in the VIX, which, midweek, unthinkably dropped to single digits, before regaining some equanimity as the cycle ended:
VIX 3 Month Chart:
Finally, I hear an increasing chorus of some of the world’s most savvy investors calling for corrections of up to 40%. Well, maybe, but I reckon they’re gonna have to wait a spell to get paid on that one.
In the meantime, you have my blessing to do some careful shopping here, but as always, the bargain bin is a good place to start. If it doesn’t work out, you are certainly at liberty to follow the time-honored tradition of blaming me. If so, please temper justice with mercy, and save the brutality for your artistic critiques of my new company logo.
TIMSHEL