By William Davis


There’s nothing you can do that can’t be done. Nothing you can sing that can’t be sung.

Nothing you can say, but you can learn how to play the game.

It’s easy.

You’ll be forgiven for not knowing that the suggested gift for a nine-year anniversary these days is leather. (We had to look up.) What you should know, though, is that last Friday marked the 2,266th trading day since stocks hit their financial-crisis bottom back on March 9, 2009. Translated: Our current bull market turned nine years old last week. Anyone want to go in on a monogrammed leather wallet?

Nothing you can make that can’t be made. No one you can save that can’t be saved.

Nothing you can do, but you can learn how to be you in time.

It’s easy.

Probably not, because despite this epic run for U.S. stocks – the second-longest bullish streak in U.S. history, by the way – this wealth-creating market has regularly been called “unloved,” or even more cruelly, the “most hated rally ever.” Surely not something the Beatles would have written about. Seems that investors – a quadrupling of the S&P 500 notwithstanding — continue to show widespread disdain for what look like pricey stocks, a gridlocked political state, and, most recently, corporate earnings threatened by the possibility of trade wars. Maybe a leather photo album with taurus pics in it?

There’s nothing you can know that isn’t known. Nothing you can see that isn’t shown.

There’s nowhere you can be that isn’t where you’re meant to be.

It’s easy.

Frankly, investors’ ongoing antipathy toward the modern bull seems mean-spirited. We get it that the resurgence in volatility is a bit unpleasant, but S&P 500 companies are on track to report earnings growth of 15% from the year-earlier period. And against a backdrop of corporate tax cuts, a weaker U.S. dollar, and stabilizing commodity prices, it’s reasonable to expect the gains to continue for more than a few quarters. Love it or not, a shift to late cycle is under way, and the pickup in equity volatility is simply a sign of the higher uncertainty that shift brings. Doesn’t mean you have to be a hater. A leather-covered flask perhaps? With engraved horns? That might be easy.

What the pundits have been saying…

“Active management isn’t about beating the market but about achieving market gains within a defined acceptance of risk.”

  • James Stack, market historian and president of InvesTech Research


What people have been saying…

“…a 10% tariff on aluminum imports will increase the cost of aluminum in the United States and endanger American jobs in the beer industry and throughout the supply chain.”

  • Jim McGreevy, Beer Institute President and CEO


What the numbers have been saying…

  • $11%

The U.S. dollar’s slump since late 2016 against the currencies of its main trading partners. The decline is surprising many on Wall Street, where dollar strength has been anticipated as a series of Federal Reserve interest-rate increases has expanded the yield premium on U.S. Treasury notes over comparable securities.

What the equity markets have been doing…

INDEX Friday’s Close Two-Week Point Change Year-to-Date Change
DJIA 25,335.74 +25.75 +2.49%
S&P 500 2,786.57 +39.27 +4.22%
NASDAQ     7,560.81 +223.42 +9.52%
Russell 2000     1,597.07 +49.77 +4.01%


What the fixed income markets have been doing…

FIXED INCOME Period Change YTD 12 Months Yield
U.S. Treasuries
-(2.1)% -(0.7)% 2.9%
U.S. Investment Grade +0.1% -(3.0)% +3.5% 3.8%
U.S. High Yield -(0.1)% -(0.4)% +5.2% 6.1%
U.S. Municipals +0.1% -(1.5)% +3.4% 2.7%
Non-U.S. Developed NC +2.7% +13.6% 0.9%



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