Another week has gone by and the Dow and the S&P continue making all-time highs on a daily basis. There is a lot of sweaty hand-wringing by the pundits, gurus, swamis of both shades (good guys and dark-side crowd) on Wall Street who are hoping, praying and even livid that the markets continue higher.
The ursine crowd, for obvious reasons, is feeling the pain of being short the markets/indices in general, and the bovine crowd remains underinvested and angry about the fact that they are unable to put their high cash levels to use.
Can our markets continue higher? Of course they can. Will they continue higher is the more important question. The two things that I think can lead to a pullback in the markets are the Fed and President-elect Donald Trump.
The first is that after an entire year, maybe even two, of incessant jawboning and shooting off their mouths at every inopportune moment, the Fed decides not to raise rates next month. Perversely, that could lead to a pullback because traders, investors and gurus will wonder what it is that the Fed has seen or sees that made it decide to pause on an interest-rate hike? Second, and even more obvious, if The Donald decides to come with some strongly negative stance on his wild, pre-election braggadocio, that could lead to markets heading south for a bit.
For those of us who invest in techland only (moi!), I haven't seen a rally yet, so I am happy either way, although it's only a matter of time before high-growth mega-cap tech stocks come back in favor. Too hard a sector to ignore for too long, Trump notwithstanding. Some will say it's a sector that is impossible to ignore.
This week brought us some major respite from Fed heads out and about. However, for next week, I am afraid we're out of luck with Vice Chair Stanley Fischer and New York Fed President Bill Dudley kicking things off on Tuesday. Wednesday brings us the triumvirate of Dallas Fed head Robert Kaplan, Fed Governor Robert Powell and Loretta Mester, head of the Cleveland Fed. Thursday it is Mester again followed by Fed Governor Daniel Tarullo.
Taking center stage on the economic data front will be the nonfarms jobs data on Friday, with the usual gobs of other economic data to boot, both here at home and overseas (China manufacturing PMI on Wednesday).
With Thanksgiving now behind us, one would think earnings would be, too, but no. Tuesday will bring us earnings from Autodesk (ADSK) , Nutanix (NTNX) and Splunk (SPLK) after the close of trading. Post-close on Wednesday we will hear from Pure Storage and on Thursday it will be Ambarella's (AMBA) turn to share its financials with investors and analysts. In addition, we have a few non-tech earnings to contend with next week.
On the lighter side:
An economist is someone who doesn't know what he's talking about -- and makes you feel it's your fault.
With that, I wish each and every one of you a safe and joyful weekend with your loved ones.
Oh yes, and how about dem Cowboys, huh?