May 18, 2018
By Peter Bower
“Clowns to the left of me, jokers to the right”; there is no breakout to new highs and no breakdown. The stock market remains in a trading range. It’s not just our market, but almost all of them around the world. Yes, the economy and business are excellent, but concerns abound too. The one side keeps valuations from falling too far and the other limits the upside.
However, things are changing within the stock universe; new leadership is slowly emerging. The old leadership, a narrow list of grow in any type of environment businesses, are giving way to more cyclically based companies that are set to benefit from the new tax law, greater GDP growth, and higher interest rates. This has not been a smooth process especially because of trade tensions that could derail heretofore bright prospects. So, the market still vacillates from one prospect to the other. This process will eventually sort out, but it may take more time.
We believe the cyclical, value oriented outlook will prevail; stay steady my friends.
El Solo Toro
