The markets were doing just fine until Trump decided to stir up the Chinese tariff pot again. Employment continues to be healthy; the housing market remains strong and consumer and advisor sentiment is bullish. We’ll just have to see how this plays out, but I imagine it will be a flash-in-the-pan situation, lots of talk and probably little action.
Meanwhile, our contributors are long-term bullish and short-term cautious, as you’ll see in our Market Views section.
Wall Street’s Best Dividend Stocks 320
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Market Views
Watch for Violation of Lows
Technically, not much has changed since last week. Momentum indicators on the major averages remain overbought for the short, intermediate, and the long term. Market sentiment shows high optimism (a contrary indicator), suggesting short-term caution. Today’s decline and recovery were news driven. It’s positive that during today’s decline the major averages support levels remained intact. What was disturbing was that the recovery didn’t turn the averages positive and take out Friday’s highs. If today’s lows are violated, then I would expect the decline to accelerate sharply and quickly, especially if the U.S and China trade talks results disappoint investors.
Dr. Marvin Appel and Gerald Appel, Systems and Forecasts, www.systemsandforecasts.com, 800-829-6229, May 6, 2019
Caution on China Trade
We remain concerned about China trade and are getting signals that they may be willing to play hardball. That would not be helpful for the markets. The long-term stakes are extremely high in areas such as 5G and AI.
We will maintain a large cash position as long as we have a healthy dose of caution. We would be willing to rethink this, however, if we went through a full-blown correction of 10% or more.
Sean Christian, The Personal Capitalist, 9524 East 81st Street, Suite B #1715, Tulsa, OK 74133, May 1, 2019
Stay the Course
If a sufficient number of Q1 earnings reports say that things are looking better for the second half of 2019, that may be all it takes to light a fire under stock investors. While I am skeptical that the prediction of future profits will be so strong that it creates a “melt up” in stock prices, I see no reason why prices could not climb an additional 6% or 7% by the end of the year.
For this reason, I think you should stay invested in this market, despite the fact we might soon bump into old highs.
David C. Jennett, The Investment Letter, P.O. Box 6170, Holliston, MA 01746, 800-542-5018, April 23, 2019
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The next Wall Street’s Best Dividend Stocks issue will be published on June 5, 2019
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