After the best quarter for US stocks since 2015, global equities have started off Q2 on the right foot, despite caution about the upcoming meeting between President Trump and China's Xi Jinping later this week, and Fed Minutes which are expected to be more hawkish than the FOMC statement.
From Eric Peters, CIO of One River Asset Management, here is a topical anecdote, as well as a review of the key events in the past week.
Weekend Notes
“Where’s the beef?” bellowed Biggie Too. “Health care, regulation reform, tax cuts – where’s it at?” continued the Chief Global Strategist for one of those too big to fail affairs.
“You boys were always gonna face this moment,” barked Biggie, sliding into a slow groove.
Authored by Nicholas Colas via ConvergEx,
The stock market may not be a casino, but 21 is the game of the day. That’s how many House votes the Republicans can afford to lose from their own party and still pass the American Health Care Act on Thursday. The cause of today’s sell-off is simple: there seems to be more like 25 “Nay” votes coming from the right wing of the GOP. For what it’s worth, our two best sources in DC both think the bill will pass on Thursday and today’s Beltway theatrics were just par for the course.
"Warning! US equities can occasionally go down as well as up a lot."
Complacency about U.S. stocks has become so widespread that losses may lie ahead, according to Brian Belski, chief investment strategist at BMO Capital Markets. In a report Friday, Belski cited the ratio of the S&P 500 Index’s price-earnings ratio to the VIX Index, "which essentially shows how much investors are willing 'to pay' for a given level of market risk."
As Bloomberg notes, the ratio rose this month to its highest reading since 1994.