Oak Harvest Market Update – March 18th, 2019

Equity markets rebounded last week, with the S&P 500 adding 2.9% off a 2 week pullback, ending the week around 2825 on a big Friday “payday” and quad option expiration day. Technology and energy stocks led gains on the week, however utilities and real estate continue to lead gains with the Fed on hold. The data flow was mixed, with some signs of a rebound in the U.S. numbers—decent retail sales, solid durable orders and stable inflation.  Even so, the financial media continues to harp on 1) trying to predict the next recession and 2) predicting a year of high and continued volatility.

We aren’t saying a recession can’t happen in North America over the next 18 months.  However, it’s amazing how recession chatter reached a peak in late November/early December, has suddenly faded away as we end the 1q2019.  This of course following a rapid rally in equities. After peaking in the final weeks of December, internet searches for the word “recession” have all fallen back to normal levels.

The investment team at OHFG continues to disagree with both prior “generic” scare tactics that kept people from buying equities the last 3 months with the Fed on hold.  The Fed policy change in early January is a rare game changer.  Once again, please revisit these two articles, penned nearly exactly 3 years apart, if you want confirmation of history nearly repeating itself.

https://www.bbc.com/news/business-35774629

https://www.marketwatch.com/story/heres-why-the-ecbs-surprise-policy-move-is-sending-shivers-through-global-stock-markets-2019-03-07

We continue to believe that 2h2019 and 2020 will be much more positive than others are forecasting.  We will be posting our outlook closer to mid-year but expect us to continue to make some adjustments in advance of the second half. Until the 2h2019, “Rotation Nation” will be the general rule. Our first half 2019 market outlook and commentary can be found at https://oakharvestfg.com/2019-first-half-outlook/.

Sources for data include Bloomberg, Investor’s Business Daily, and other publicly available news sources. Weekly market updates contain general information and the views of Oak Harvest Investment Services. Content should not be regarded as personalized investment advice. Views and opinions expressed may change without notice. In addition, Oak Harvest makes no assurance as to the accuracy of any forecast made. Past performance is not indicative of future results. Investing involves the risk of loss.

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