Market Outlook The market is a little scary up here. If a new client came today with cash, he would suggest only getting into partial positions and buy on weakness. Although there is some room for the market to go higher into the spring, he would be concerned after the US Presidential election. Then you will need to be more defensive, hold more cash and gold. Energy, banks and financials are all picking up momentum and he thinks these are good areas to find defensive holdings that can pay a good yield as well.

Dropped from an Index? When a stock is dropped from an Index, there will be temporary forced selling of the stock. When the selling is finished you may see a bump up as the stock then looks undervalued. It also means they are need meeting the requirements to list, so it is a warning sign.

Markets finished on a negative sentiment. Trade talks with China are stumbling again. The markets need to see a friendlier tone, combined with an aggressive Feds to keep the bulls happy.

On the yield inversion, are we going to see a recession soon, or is it like in 2011/2015 and the Feds will get in front of it and it’s a pause that refresh’s it. It all depends on the Federal Reserve and trade.

He thinks the job of the Feds is to be forward looking and react to key economic data. It’s their job to see that it’s coming and stave it off.

The script is that markets rally for the next 14 months anyways, even with a yield curve conversion. He thinks the Fed should fight it, and maintain the expansion as long as they can. It might needs fiscal stimulus. He believes that either there’s a deal or the supply chain will move elsewhere and China won’t be as relevant as before.