Eq: Large Cap

(New York)

The market had a big sell-off this week when it was announced that top Trump economic adviser, and former Goldman Sachs executive Gary Cohn was leaving the White House. The departure elevated worries about a trade war and left investors feeling that there was no moderating voice left in Trump’s inner circle. However, the Wall Street Journal reminds investors not to be overly worried as this “Teflon” market seems to always shake off fears and heads higher.


FINSUM: The WSJ’s argument is not very strong, but trade war does seem like an issue where fear greatly outpaces reality.

(New York)

Anniversaries offer an opportunity to gain perspective on the market. This week is no different. The S&P 500 just had its nine-year anniversary from its bottom of 666.79 in March 2009. Along the way there have been somewhere around 32 “panic attacks” according to analysts. But despite these, the market is now trading above 2,700.


FINSUM: So the real question is whether that 4x+ rise should make one nervous a new downturn is on the way, or comfortable that we are on an upward trend.

(New York)

If ever there was a “5 stock” piece that investors might want to read, this is probably it. Barron’s has published an article naming five stocks which will do well as rates rise. Interestingly, these choices are not based on macroeconomics (e.g. REITS do poorly as rates rise), but based on the actual underlying financial obligations of the companies, with pension obligations being the key factor. The five names that come out when one looks at the situation that way are companies which investors will be very familiar with: GM, Ford, Xerox, American Airlines, and General Electric. The piece summarizes the benefits this way, saying “In general, as the health of pension plans improve, so should balance sheets, cash flows, and earnings due to lower pension contributions and costs”.


FINSUM: These look like very good calls because they are not obvious, but the benefits will be in time. Very interesting to see GE on there given its struggles lately.

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