Category Archives: Weeklies

With a Little Help From My Friends

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What would you think if I sang out of tune, would you stand up and walk out on me? — Billy Shears

For those not counted among the teeming millions that comprise my social media presence, allow me to formerly announce the arrival of my grandson, William Thomas Feller.  Further, as a public service of sorts, I offer the following glimpse at the little fellow, taken in the first hour of his existence:

Over the last few days, the looming specter of his arrival pressed the following problem on me: what on-line persona should I bestow on him? With my first grandson: James Alexander, the answer was easy.  From the moment of his birth he was, is, and will remain, The Dude.

But there’s only one Dude, right? (OK, so there are other dudes, but bear with me). Looking for something materially different, I (with the help of my wife) cast about for the catchy, the urbane, the relevant.  We first focused on the John Coltrane, whose birthday, so we believed, was shared by our newest bundle of joy, rendering the handle of ‘Trane a viable option.  But a quick check of the record books indicated that Coltrane was actually born in late September.  Not that this would’ve stopped us, but I won’t lie: it did give us pause.

Then it hit me, the iconic album: Sergeant Pepper’s Lonely Hearts Club Band was released on June 1, 1967, 50 years to the day prior to our blessed event.  Given that our little guy’s name is William, the answer came to me.  So let me introduce to you, the one and only Billy Shears….

(By the way, as my tragically constrained contributions to the future gene pool progress in a gratifying manner, it does strike me that I am being pushed further down the bench with respect to the birthing process.  I was in the Labor Room the night The Dude was born, but was perpetually plagued with “make work” assignments, such as walking the dog, in such a way that I suspect was driven by an agenda to get me out of the way.  Eventually, my wife and daughter ran out of pretexts and sent me home.  This time ‘round, I wasn’t even at the hospital.  But I am content, because, after all, what is life itself if not a process of making way for the new, while we the old fade to black?).

In any event, Billy Shears has indeed arrived, and from my vantage point, not a moment too soon, as it strikes me that the markets are in a paradigm that brings to mind the first lines that the original B.S. ever issued forth.  Something indeed seems out of tune, but are you, is anyone standing up and walking out?

They are not.

In fact, if anything, investors are rushing the stage.  U.S. equity indices hit a series of all-time highs this past week, and global markets are experiencing more or less the same paradigm:

Global Dow:

Bonds around the world are also in bid configuration.  There’s some bouncing around in FX-land, but other that some intervention-driven strength in the CNY, there’s not much to report from that corner of the universe.  Other than visible downward pressure on Crude Oil (proving, above all, that all the “smart” long speculation into the 5/25 OPEC meeting was, as I suspected, so much Dixie-whistling), the Commodity Complex is in strong bid configuration.  Consider, if you will, the oft-overlooked but sentimental fave Cotton tape:

More than Dixie Whistling in the Land of Cotton:

Defying reverse gravity, the VIX actually managed to trade modestly down from last week’s record lows.

Through 5-and-a-stub months, the Gallant 500 is up 9%.  So why is everyone so angry and nervous? Again, I think a good deal of the blame can be laid at the doorstep of the White House, or if not, blame, then at least root cause of agita.  At this point, one simply does not know what next to expect, either from the President or from his well-funded, well-organized and increasingly unhinged enemies.  I do indeed worry about this, my darlings, because never in our collective lifetimes (and perhaps not since the pre-secession Lincoln administration) have we witnessed such vitriolic hate of a sitting POTUS, nor, perhaps one so prone to fall into traps that empower and embolden his enemies.  He simply, from my perspective, cannot resist lunging at any bait that is placed in his field of vision and I increasingly worry that sooner or later, he will indeed be hooked once and for all.  Far be it from me to politically proselytize, but I don’t think that the organized resistance will be particularly pleased with any material success they achieve.  It is, from my perspective, a case of careful what you wish for.

I am troubled, in particular, by the growing chorus suggesting that anyone not outraged to their cores by the current government power structure is either stupid, immoral or (more likely) both.  The response from those on the winning side has been characteristically polite, muted and dignified, but if matters carry forward much further, this CANNOT last.  The tens of millions who not only voted in Trump, but also carried home both houses of Congress, 30+ governorships and 60+ state legislatures, have significant, but in the end finite patience for being trampled upon.  If pushed beyond their limits, they will respond by causing their own forms of trouble, and then, from a market perspective, it’s look out below.  Again, I’d feel less concerned here if I didn’t think that Trump is an ideal target for the traps being set for him, but he is such a target, and if/when he steps into it for good, I shudder to think what comes next.

I’ll offer one last case and point with respect to this.  The organized opposition has, by all accounts, crippled Fox News.  It kneecapped its founder (now dead), it chased away several of its most popular hosts, and hired away a number of others.  Those that remain are in the cross-hairs of the opposition and may not last out the summer.  Its ratings are, inevitably, dropping.

But let’s extrapolate and imagine that they take down the organization entirely.  This will leave the free TV networks, along with MSNBC and CNN to tell us what to think, and I believe that it would be a matter of microseconds before a right-oriented replacement sprung up, unconstrained by the opposition’s destructive playbook. At that point, the Kathy Griffin contingent may wax nostalgic for the happier days of the Ailes/O’Reilly/Hannity/Kelly/Van Susteren Fox News.

And no one will win.  And the markets won’t like it.  And this, I feel, is the biggest risk we face: a full-scale political unravelling that I believe is more probable than what is reflected in current valuations.      As June busts out, and after the Fed raises rates next week, there won’t be much else upon which to focus, at least until after our Independence Day festivities are complete.

So take care out there everyone.  You’re all my friends, I can’t get by without you, and neither, can, for that matter, the newly born Billy Shears.  As for the original, he’s doing just fine.  I read yesterday, with interest, that after spending the last 28 weeks on the Billboard 100, the original SPLHCB actually hit Number One this past week, some 50 years after Billy I first warbled his way into our collective consciousness. His words are as fresh and as true today as they were during the Summer of Love, and if I have anything to say about it, they will indeed inform the experiences of my progeny, for as long as the (Lonely Hearts Club) band plays.

TIMSHEL

CamelNOT

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 OK, a quick word about Greg: a man for his time and place. Loved the music, the persistence, the reinvention. And I forgive you for the folly: for letting your road manager take the fall for your cocaine bust, for that nonsense with Cher, for firing Dickie. You proved, as much as anyone this side of Dylan, that the road does indeed go on forever…. 

I dedicate this Memorial Day edition to John Fitzgerald Kennedy, the 35th President of the United States, on this, the 100th Anniversary of his birth. 

His record on this earth (well, what is publicly known at any rate), is beyond the stuff of legend. It is so indelibly burned into the brain of Americans as to almost transcend its own historical context, which, significant as it was, should’ve been bloody good been enough. To recap briefly, 35 was the scion of a powerful family whose wealth may have derived from dubious, ill-gotten sources. He matriculated (where else?) at Harvard, joined the Navy during WWII, got his PT boat rammed by the Japs, and organized a 3-mile swim to relative safety, dragging an injured crewman that entire distance with his ‘effin teeth! He then entered politics, copping a Congressional Seat, knocking the entrenched Henry Cabot Lodge out of the Senate, blowing by Johnson and Stevenson in the 1960 Democratic Primary, and then winning a (perhaps Daley enabled) squeaker over Richie (aka #37) Nixon in the General. Like Nixon (who established detente with the Soviets and the Chinese, and instituted Wage and Price Controls), his (albeit brief) stay in the White House was marked by astonishing divergences from his party’s play book. He cut taxes, and presided over an economy that was growing at 5% with 1% inflation and did not engage in deficit spending. He took on the Red Scare on two separate occasions in 1962 – first an unsuccessful invasion of Cuba’s Bay of Pigs and then a triumphant showdown with Khrushchev, the end of which featured the dismantling of Soviet missiles on Castro’s turf. 

He sowed the seeds for the Vietnam War (which didn’t turn out so good), but also established the Peace Corps and the American Space Program. Finally, though he didn’t live to see it, he was the visionary behind the Civil Rights Act of 1964, a milestone that your humble correspondent believes may have been the last useful piece of legislation ever enacted by the World’s Greatest Deliberative Body. 

Of course, just as he was cranking up his re-election campaign machine, someone (and, being a grassy knoll kind of guy, I’m not convinced we know the full story) blew his head off. Like Jim Morrison, John Lennon, Roberto Clemente, Abe Lincoln and so many others, his untimely demise only added to his status at as an historical icon. 

His is, and will presumably remain, among the most recognizable visages in history. But what strikes me most about him is this: he was a man. A real man. Of course, part of this is is his well-documented status as a world-class horn-dog, whose bedroom exploits might give contemporaneous superstar Wilt Chamberlain a run for his money. But there was more than that to consider, more, even than his military record, more than his political record, more than his movie star demeanor and epic life story. If you get a minute, listen to some of his speeches: his acceptance speech at the 1960 Convention, his Inaugural Address, his remarks in Berlin (and for the truly obsessed) his Commencement Speech to the (presumably hated) Yale University Graduating Class of 1962 (The Peace Speech). There and elsewhere, his stood tall, articulated clearly and spoke (for the most part) what was on his mind. 

Shortly after his death, his fetching, accomplished widow, Jacqueline Bouvier Kennedy Onassis, described his fleeting time in the White House with a single, sublime term: Camelot. 

I got to thinking about this, on 35’s 100th B’Day, from the perspective of the stark contrast to the current paradigms in Washington. Yes, my friends, Camelot appears, for the time being, to be transformed into CamelNOT. 

Here, I write not to disparage the current administration, many of whose efforts I applaud, and for whose success I am ardently rooting. No, my friends, the problem goes deeper than that, and it says here that the situation from this perspective would be no less dismal had the outcome of the 2016 gone the other way. If you doubt this, give a listen to Hillary’s recent commencement address at, her alma mater, Wellesley College, in which, conveniently and characteristically forgetting her lifetime of serial dissembling, chose to lecture the graduates about the importance of truth telling. 

But one way or another, for the time being, our biggest challenges continue to emanate (or so it would seem) from Washington. Last week’s pre-holiday action featured the nebulous content of the Fed Minutes, the release of a Presidential Budget Plan that seemed to please no one and anger many, the micro-analysis of Our Leader’s first overseas capitol hop, and of course, the drip-drip-drip of leakage about collusion with the Russians. 

But for now, choosing not to obsess over these matters, the markets instead ignored them entirely. Domestic Equity Indices rallied, unimpeded, to new all-time highs. Rates, both domestically and globally, drifted downward. The VIX, after showing signs of life last week, actually managed to submerge, yet again, to all-time lows of 9.81: 

(By the way, while I LOVE the WSJ, I ask them PLEASE to stop writing about how robots are going to displace all humans in the investment profession. Guys: you’re really starting to depress me).

 Meanwhile, economic and financial statistics have been, of late, encouraging – at least on balance. Friday’s poorly attended trading session featured a modest upward revision to the heretofore dismal Q1 GDP Report. True, we only came up to a dismal 1.2%, but that’s a clear sight better than the original print of 0.7%. Durable Goods and New Home Sales came in on the light side, but PMI and Weekly Jobless Claims told a happier story. 

Perhaps most encouraging of all is the final (or near-final) tally on Q1 earnings, which evidenced a 14% rise. Arguably as important is the firming/convergence of top-down and bottom up estimates for Q2: 

It occurs to me, on the whole, that we’re at something of an inflection point here. The markets, as I suggested a couple of weeks ago, and then (so it must be admitted), I retracted last week, are showing signs of wanting to break out. The technical are strong and a flight to the upside is certainly possible. My best guess is that the main gravitational pull derives from the high-probability series of new tape bombs emanating out of the White House, a dwelling that at present is clearly occupied by persons other than Arthur, Lancelot, Galahad and Guinevere, or for that matter, John, Jacqueline, Lyndon, Lady Bird or Everett (McKinley Dirksen, that is). 

In any event, I don’t think that valuations stay where they are, come what may. The SPX breaking through 2,400 was impressive, but current levels strike me as being nothing more than a weigh station between more heavenly elevations or a reversion to that wearisome 23-land. It’s of course a holiday shortened week, and June, other than a few important tidbits like next Friday’s Jobs Report and Chair Yell’s Flag Day (6/14) turn at the FOMC podium, will be relatively bereft of pertinent information flow. 

The tape, in short, will be tricky, even if everyone in Washington behaves themselves. We’ve been here before, my loves, but that may be of little comfort. We are all of and in our times, and clearly, there’s no Knights of the Round Table, nor even inspiring figures like JFK to shore up our fortitude. 

So, let’s take a moment today to celebrate 35, whose final resting place is on the sacred burial grounds of Arlington National Cemetery, which was once the estate of last week’s anti-protagonist, R.E. Lee. After that, it’s back to the grind, and, CamelNOT or not, we have no choice but to strive to prevail. 

TIMSHEL 

I Don’t Know Why The Caged Bird Sings

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I begin by taking care of an essential item of business: Happy Mother’s Day, everyone.  Today is my first motherless Mother’s Day, which is sad, but, on a happier note, my daughter (a mother of nearly two year’s standing herself) is due any day. So there’s that.

In addition, it’s true: I don’t know why the caged bird sings.  I have never read Maya Angelou’s magnum opus, and I don’t expect I ever will.  What’s more (though I’m not particularly proud of this), in terms of the motivations for the warbling of the captive orinth, I have never particularly cared to find out.

That is, perhaps, until now.  And here, of course, though reluctantly, painfully, I refer to the recent doings in the White House.  Indisputably, the Presidential Manse is something of a cage, and its current occupant is certainly capable of both flying and singing, or, more pertinent for our purposes, tweeting, which is, after all, the type of singing in which your typical winged tree denizen engages.

I wish he’d just shut his big fat beak.  His electronic croonings, long since tiresome, have now become dangerous.  Case and Point: this Comey thing (sorry).  When I’d heard that he canned that dissembling, misanthropic domestic law enforcement czar, I was pleased.  The guy should’ve been shown the door a long time ago.  Upon further immediate reflection, I decided it was a sublime political move.  I mean, his recently vanquished political opponent had just emerged, in rather unseemly fashion, to inform a sequence of enraptured audiences that, but for Comey, those new curtains she picked out would be dangling from the broad windows of 1600 PA Avenue as she spoke.  Of course, the other half of her rationalizations dealt with some nefarious, improbable linkage between the WikiLeaks DNC leakage, the Russians, and the Trump Campaign.  I’ll go on record as opining that this is hogwash, well, part of it any way.  Did the Russians hack the DNC? Probably. But so did everyone else.  Were they seeking to influence our elections? Of course they were. But boys and girls, it’s time to grow up.  Major nations have been messing with each other’s elections since mankind was still sporting tails, and I suspect that the most enthusiastic and effective perpetrator, for most of the last couple of centuries, is the good old U S of A.

But were the Trumpsters actively working with the Ruskies on this one? I highly doubt it.  What was the nature of the alleged collusion?  No one has said.  And what form could it have assumed? Did Team Trump pay Putin to do this? Please.  First off, Putin is, almost inarguably, through purloined riches, the wealthiest man on the planet, and the DNC Server was such a sitting duck that it couldn’t have cost very much.  Did the Russians feed the data to the Campaign, for them to leak? It would seem unlikely, and one way or another, the information would’ve gotten out.

Also, it may be worth remembering that as late as dusk on November 8, 2016, the probability of a Trump victory was placed, at best, in the low double digits.  The HRC triumph bash, replete with shattered glass and riverside fireworks, was all teed up.  And how long do you think, after, she took her hand off the bible on January 20th, would she have instructed the Bureau to put cement shoes on her hated opponent? Not very long, I imagine. Trump’s people weren’t stupid (they won an unwinnable election after all), and I doubt they were taking any undue risks of this nature with the perfidious Russians.  Plus, there was a great deal of roadkill on the President’s journey to the White House.  By my count, he deep sixed at least a dozen campaign managers alone.  Are there no disgruntled former insiders ready to sing a Russian ballad as a means of score evening? If so, they have yet to emerge.

But the Russian interference story lingers, used by Progressives like the drunk uses the proverbial lamp post: more for support than illumination.  And, with the Dems complaining that the FBI Director who was incentivized to push this narrative was to blame for their loss, how beautiful was it to have sacked him? Had it been handled correctly, it would’ve left the, er, left, with little fodder to use against their political foes (lest they demonstrate, yet again, their seemingly insatiable acumen for hypocrisy), and, as such, might’ve disappeared from our capacity-addled attentions quicker than a Snapchat photo (or, for that matter, the valuation of the device’s corporate owner).

But then came the tweets, including perhaps the most idiotic one in an ocean of moronic 140-character brain fluffs: the one warning Comey about the potential presence of taped conversations. Now, I hate to agree with the millions that are seeking to undermine the current government at every turn, but this stunt was completely out of bounds.  Just as (as pointed out by Deputy AG Rosenstein) FBI Directors do not comment on the decision factors on a case they’ve tried to drop, presidents don’t issue veiled threats at deposed FBI Directors.  And now, I think everyone’s got some reason to worry.  There is literally no telling what may next be issuing forth from the Presidential keyboard, and, if it gets much worse, Trump’s enemies may actually have a legal case against him.

But what offends me most is that this sequence more or less destroyed last week’s confident call for a breakout of the U.S. equity complex.  These ornithological discharges made me look like a simian, and I’m not one to sit idly by in consequence.  Yes, there were other contributing factors.  The late reporting Consumer Discretionary Sector dropped some pretty nasty waste — at a point contemporaneous to a rather tepid Retail Sales print.  There was some sort of global cyber-attack that hit about 900 countries on Friday, crippling enterprises ranging from Fed-Ex to the British National Health System.  The Energy Complex is bouncing around like a billiard ball.  L’il Kim lobbed another one into regional waters this weekend.

Still and all, Q1 manifested a 13.5% increase in earnings and a 6.5% jump in sales.  According to the published genius of the investment class, affairs are even rosier in portions of the investment universe ranging from Europe to the Emerging Markets.  Rates are low and showing no signs of busting out.  Most economic models are projecting back-loaded acceleration in economic statistics.  I’ve seen worse backdrops for loading up on stocks – Washingtonian nonsense notwithstanding.

But a couple of points bear mention here.  First, I’m really skeptical about all this Europe love.  I’ve seen the analyses that suggest the Continent is cheap relative to our own valuations, but I advise those who care to proceed to do so at their own caution.  It strikes me that Europe remains the same geriatric, declining economic beast with which we’ve been contending for most of our adult lives, with high unemployment, widespread credit issues, an unworkable fiscal matrix and a measurable disposition towards redistributive socialism.  Some of you pros may be well positioned to take advantage of transient upswings, but as for me, I think I’d rather keep my risk capital moored on these here shores.

On the other hand, I don’t, as a matter of policy, invest in the markets.

But even domestically, I’d be careful about where I place my bets.  That a perversely disproportionate segment of gains derive from a small handful of names is a widely analyzed phenomenon that need not be rehashed in this space.  For the mere mortal tickers in the stock trading universe, it’s really all about earnings, and, creeping into the dynamic, is the age-old problem of disappointers being punished more severely than delighters have been rewarded:

 

But with quarterly earnings substantially behind us, this is something that we arguably can ignore for a few weeks.  In the meantime, it may be worth remembering that tomorrow marks the 45-day window for hedge fund redemptions, and this may perhaps cause some gratuitously violent price action, as catalyzed by an 11th hour wave of unexpected redemptions.

The latter would be particularly true if the Washington bird flu, rather than subsiding, spreads to epidemic proportions: a scenario that one can now neither rule out nor discount.  As I have reviewed this wearying sequence of events, I cannot help but fear that Trump may have made the same type of early-term mistake as his two predecessors: taking a constructive action too precipitously, and with inadequate understanding of deferred consequences.  W. Bush invaded Iraq at a point of maximum post-9/11 goodwill, and we’re still stuck there.  Few rational folks would argue that deposing Saddam Hussein was an unholy objective.  But at the time we had more pressing geopolitical problems with which to contend, he failed to form the type of broad coalition that worked well for his father in Gulf War 1, and the W presidency arguably declined in a more or less linear fashion from there.

Then there’s Obama, who rammed through a massive, poorly framed and ineptly executed re-engineering of the Health Care system at a moment when our post-crash capital economy itself was just emerging from the critical care unit.  Unemployment at the time was peaking at 7.5%, and of course, he passed the bill through a reconciliation process that removed all transparency from the drafting of the final provisions (recall the Pelosi line).  At that point, the Health Care system was broken and needed fixing, but the timing was terrible, and, like the Iraq War fiasco, the coalition behind the reform was self-servingly narrow.  Of course, the economy slowly regained its footing in subsequent years, but ultimately, the framework at least partially imploded, and, as I’ve stated previously, I believe that the sticker shock of 2017 premium increases (disclosed in October of 2016) was, more than WikiLeaks, more than Comey, what turned the last election’s tide against his preferred successor.

As for Trump, though it’s impossible to know at the moment, it may be that he has fallen into the same trap.  Comey is indeed a showboat, more interested in his own agenda/standing than in doing his job appropriately.  He was not capable of running the FBI effectively and needed to be fired.  Had Hillary won, I suspect she would have taken this step herself.  But the timing may have been too precipitous.  Like his predecessors, he might’ve been better served by waiting, maybe getting the Republican Congressional Caucus together to pass some legislation, before putting two to the head of his target.  And the execution was terribly, well, executed.  Why not follow the Clintonian Friday afternoon news dump and then announce something constructive to change the subject?

But no, he did this on a Tuesday and then made matters worse with his messaging.  As a result, not only may he have bought himself a whole passel of problems, but also, as everyone has stated, he has rendered the path to delivering on key parts of his agenda much more problematic.

But the world is full of such improbable contradictions.  Take Maya Angelou for example.  She wrote (I’m told) profoundly of racism, sexual abuse and other horrors of growing up as a black female in the postbellum South.  Yet she freely admitted to operating as a madam in her young adult years.  Then, she settled down to accept an endowed professorship at Wake Forest University, which, though a fine academic institution, was founded and resides on a tobacco plantation that relied for centuries on slave labor.

So I’m gonna stop wondering why the caged bird sings, and can only, for the moment, pray for the sound of crickets emanating from such locales as the White House, Trump Tower and Mar-a-Lago.

TIMSHEL

Success Story

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“We got the greatest country in the world here. The highest standard of living. The grossest national product.”
— Archie Bunker

For want of superior alternatives, I’m dedicating this edition to Archie Bunker, erstwhile “everyman” hero of the seminal 1970s CBS series “All in the Family”. Many of you may be too young to remember Archie, a hard-working, family loving, WWII vet, spewing out politically incorrect bon mots from his Queens enclave, but much is to be learned from him, that is, if one takes the trouble to pay attention. Improbably (at least to me), I’m now older than he was purported to have been during the run of the series, and, while I always liked him, I believe, with the passage of time, I have come to understand him better. He is a product of his environment and times, working hard, fighting for his country, supporting his family, and, in his off hours, coming home to arguments with his left wing graduate student son-in-law (whom he is supporting) who seeks to tame his ignorance even as he eats his food. He tries is best to cope with the world, rapidly changing before his eyes, but often, it becomes too many for him.

As time goes by, I increasingly know how he feels.

I felt particularly sorry for him when his best buddy, Stretch Cunningham, his doltish, wisecracking comrade on the loading dock, drops dead of a heart attack. Archie is asked by the family to speak at the funeral, and in the process, finds out that, unbeknownst to him and all his peers, Stretch was actually Jewish. This being a problem at the time for a middle aged, working class, high school grad, he struggles to understand, particularly given his fallen buddy’s decidedly Anglican surname. His family offers up the possibility that perhaps he changed his name, but Archie rejects this out of hand, for perhaps the best reason imaginable. If Stretch had indeed changed his name but retained his Jewish identity, one thing was certain:

“There ain’t supposed to be no ham in there”.

Apart from his devotion to his wife, daughter and (eventually) grandson, Archie is above all, a patriot. And, responding to one of his meathead son-in-law’s endless stream of criticism of the country that spawned him, reared him, and provided him all is comforts, he did indeed point out, in a first season episode called “Success Story”, that we have the greatest country in the world, the highest standard of living and “the grossest national product”.

A reading of Friday’s action would seem to corroborate, yet again, Archie’s clairvoyance. Though pointy-headed economists (a tribe to which I belong), for reasons that I have long ago forgotten, decided a couple of decades ago to switch the benchmark metric for nationwide output from Gross National Product to Gross Domestic Product, the introductory first quarter estimates can aptly be described as gross.

The Atlanta Fed’s GDPNow model, often referenced in this space, saw it coming, and, as the hours trickled down to the Friday/8:30 print, private economists started to catch on, with the final consensus coming in at 1.0%. But we missed even this diluted number by a full thirty percent, as, as everyone knows, the actual figure clocked in at 0.7%, annualized: the worst such showing in three years:

The results failed to jolt market participants over-much, and the rationalizations (crazy weather, seasonality, etc.) had been working their way into valuation for weeks. But the consumer spending print of 0.3% (vs. consensus estimate of 0.7%) is somewhat worrying, as is the unmistakable gravitational pull evidenced in the graph supplied immediately above.

Be that as it may, we all knew that the totality of the data coming our way was ambiguous, as evidenced in part by some boffo earnings results released in advance of the Archie Bunker GDP print. Names like Alphabet (OK; Google), Amazon, and sentimental favorite CAT were all astonishingly good. And, while there were some embarrassing misses (Airline Companies, Auto Companies, Starbucks), on balance, with nearly 60% of income precincts reporting, the overall tally is anticipated to come in at a 12 ½ % year-over-year gain – the best showing since the wretched year of 2011.

Moreover, the earnings picture has gained encouraging momentum in recent days:

Perhaps the other most salient dynamic is that Team Trump (never a group to let recent failures and/or humiliations slow them down in their headline grabbing frenzy) released its tax plan last week, a document which fell considerably short, in terms of volume, of the Manhattan telephone book benchmark for quantity of content. In fact, it is precisely one-page long. Scanning its voluminous details, I find it to be a bullish blueprint, and one that investors should embrace. But there’s a lot of caveats here, kids. First, as of right now, there’s no indication that anything of this nature can pass through Congress, and tax reform, an exercise not even attempted in 30 years, is a particularly sticky wicket. It may in fact be even stickier now, especially insofar as the Democrats seem determined to cast not a single vote (other than irrelevant salves to politically threatened seat holders of their own party) in favor of any bill produced by their opposite numbers, and that there is a core group of Republicans who are unlikely to support any tax plan that doesn’t provide offsetting revenues to match any relief provided therein. On offsetting revenues, the, er, tome is silent.

If, however, something of this nature goes through (and it says here that, best case, we’re looking at the end of the ’17 Congressional Calendar or beyond), there will be winners and losers. Perhaps in a dose of poetic justice, the plan calls for the elimination of the deduction of state and local taxes (a dubious and unfair proposition from the get-go) from the Washington-bound levies, thereby forcing us coastal denizens to pay the full freight already imposed upon residents of zero state tax jurisdictions such as Texas and Nevada. In addition, the banks will take a short-term hit – particularly (and you can’t make this stuff up) given the fact that significant portions of the left side of their balance sheets take the form of deferred tax credits, the value of which will be diluted by any reduction in the base rate itself.

I reckon they’ll survive this blow.

And, on the whole, I can’t say there’s an awful lot of which to complain, as the first trimester of ’17 melts into the second. There appears to be earnings momentum, and the dubious consensus may be right this time that: a) Q1 GDP is ripe for an upward revision; and b) the force of this metric may very well gain traction as the year unfolds. In the meantime, mixed macro numbers are likely to keep a lid on domestic rates, and, oh by the way, mid-week, ECB Chair (Super) Mario Draghi took to the podium to announce that he’s in no particular hurry to stop, or even downshift, the Brussels money printing machine.

Perhaps this is why the SPX, though nominally and patriotically selling off on Friday, is 13 puny index points from breaking out of this increasingly tiresome 23 handle, and 10 punier points from all-time highs. It also bears mention that the NASDAQ Composite, with minimal fanfare, crashed through the heretofore un-breached 6,000 threshold, and held this territory even through Friday’s Gross Domestic Product print.

So, on the whole, I am getting a bit more constructive. Next week features a continued onslaught of earnings releases, and, in macro-land, Friday’s potentially important April Jobs number. But this sets up to me as a bad and good news is good news paradigm, with a strong number corroborating happier days, and a weak one likely to be interpreted as being accretive to bonds and catalyzing to constructive fiscal (e.g. tax reform) and monetary policy.

But, global citizens that we are, it bears remembering that the week begins slowly, given Monday’s traditional celebration of International Workers Day. So I’ll conclude by giving a shout out to all of those wielders of shovels and welding equipment. It’s your day, and, as always, you’ve earned it. We don’t pay too much attention here in the States, but what do we know?

And as for Archie, he went from union man to entrepreneur, eventually taking ownership of his favorite local watering hole. Some of his simpatico was perhaps sacrificed in the transition, but at the end of the day, he was indeed a Success Story, and, were he with us today, I doubt he’d be taking May Day off. More likely than not, he’d be pouring drinks and ringing the cash register like always. As Archie knew in his bones, the path to Success, for all of us, makes very little allowance for virtues that run in conflict with diligence and perseverance.

TIMSHEL.