Oak Harvest: Market Update – March 11, 2019

As Yogi Berra said: “It’s Déjà Vu All over Again!”

Equity markets were down last week as weak economic data and caution from the European Central Bank sparked global growth concerns. The final piece of data being weaker than expected USA jobs number.  The S&P 500 dropped 2.2% in its worst weekly performance since December. The energy sector led declines, as builds in U.S. crude inventories weighed on oil prices and Norway’s sovereign wealth fund announced it would sell off its oil & gas equities. “Boring” rate-sensitive utilities managed a modest gain.

Overnight, S&P500 futures are up small (as we expected) on lower volatility. This is despite a 12.5% drop in Boeing causing a -200 drop in the Dow Jones owing to another 737-Max crash. (Our prayers go out to the families of those victims). The formal USA/China trade deal is expected at quarter end which could provide about 3.5-5% upside from current levels. This is getting attractive and why we bought some stocks last Thursday and Friday. However, it will likely be lurch and grind at best from these levels for 3-5 months.

You can’t make this stuff up!  Please read the following two stories and look at the dates. If you don’t believe that people react the same time and time again, you may not be listening to the news and data.

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 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.  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.