Photo: limaoscarjuliet via flickr
Michael Block, the chief equities strategist at Phoenix Partners Group, says that on a day like this, the game is to find some stocks you like that you’re ready to pounce on, even if the US data is getting worse the sovereign debt crisis is falring up again in Europe.At this point you are probably thinking, “Why are you a buyer given that horrible data?” Two things:
— I will say it until I am blue in the face. Three is the magic number. There was a reason that Mario Draghi was going on and on about the LTROs in his press conference last Thursday. It has been the magic bullet and he is realising that he can use it again. Short term, it works. Longer term, it IS a problem. I am not denying it. But in terms of getting a sick banking system and bond market percolating again, it has worked. LTRO3 is coming whether you and Jens Weidmann like it or not.
— Not to be outdone, let’s not count out the Fed here. The Minutes last week may not have been the monetary expansion fun fest some had hoped for, but this isn’t over. Ben the SPU trader saw that data on Friday. He is not sitting still. This is NOT what the Chairman of the Fed is supposed to be doing, but the rulebook flew out the window four years ago and hasn’t been seen since. The next FOMC meeting is on April 25, and while the Fed is not supposed to knee jerk every little bit of data, they will. Tonight the Chairman will be speaking on financial stability at the Atlanta Fed Conference in Stone Mountain at 7:15PM ET. He speaks again on “Reflections on the Crisis and the Policy Response” at the Princeton Club on Friday at 1PM ET. I have to think we may get another Jackson Hole moment from the Chairman given what is going on here.
There you have it. Today is the day to size up charts and find your favourites. I am looking back to recent leadership sectors within tech and consumer here. I will leave the coal and metals to others for now (last year’s beta is not this year’s – although that will change again and again.) I am mindful of how financials could and should move into earnings season. Let Europe digest all of this. The put is alive and well and tonight, it’s visiting Georgia. Good luck and have a great day.
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