The April Fool’s Edition
Did you know that Easter fell on April Fool’s Day this year? That’s right, and it has not happened since 1956. Here are a few traditions that I found that were particularly interesting and funny.
In Ireland, it was traditional to entrust the victim with an “important letter” to be given to a named person. That person would then ask the victim to take it to someone else, and so on. The letter when finally opened contained the words “send the fool further.”
Danes, Finns, Icelanders, Norwegians, and Swedes celebrate April Fools’ Day (aprilsnar in Danish; aprillipäivä in Finnish). Most news media outlets will publish exactly one false story on April 1; for newspapers, this will typically be a first-page article but not the top headline.
In England, a “fool” is known by different names around the country, including a “noodle,” “gob,” “gobby” or “noddy.”
Here in the US, one particular tradition that Google started back in 2000 was to launch an app or ridiculous nugget for people to believe until it is too late and you get fooled. Wikipedia has a great list of them. My favorite was in 2011 when AdWords announced a new format, Google Blimp Ads, that would be flying over major cities starting in May. I grew up in Houston near the Goodyear Blimp airbase.
Now let’s get to work.
What to Watch for this Week
Last week the S&P 500 lost ~2% last week to close at 2640.87. As for April starts, earning seasons will again begin to drive the narrative of the stock market. These fundamentals and stock prices should fall back in line.
The economic calendar is heavy on data this week. The March employment report, the ISM manufacturing and services indexes, and auto sales will be top of mind.
CNN has a Fear and Greed Index which tracks 7 indicators and ties them all together for a single percentage.
I bring this up as the VIX is now trading at a more normal level and not at a level that the fear and greed index is showing. Even though there are several other factors in this index, long-term outlook still looks good. Earnings and global issues are subsiding. It seems when there is little to talk about, the news can drive a narrative that can drive the market.
I still believe that long-term prospects are good. These three key elements are all in place:
- Expected earnings
- Low inflation expectations (and therefore bond yields)
- Low inflation risk
Treat this pull-back as a buying opportunity. Look for “Dividend Aristocrats” and strong balance sheet companies. Then look at the Option Edge Team to design a trade.
Global Spotlight
Xi Rolls Out the Red Carpet for Kim. The enthralling sight of North Korean leader Kim Jong Un’s armored train chugging through Beijing was a message to the world that, no matter what comes out of this diplomatic detente with Pyongyang, China will have a role in shaping the fate of the Korean Peninsula.
Watching the Beijing-Moscow Axis. The Chinese foreign and defense ministers will be in Russia this week for talks with their counterparts.
Iran Pushes Back. Iran may be under the gun with the United States threatening to walk away from the Joint Comprehensive Plan of Action, but it is still well-positioned to resist its regional rivals.
Rising Russian Ire. While much of the world’s attention was on the diplomatic tit for tat over the poisoning of former Russian spy Sergei Skripal and his daughter, Yulia, a more dynamic story was playing out inside Russia.
European Anxiety. In a worst-case scenario for Brussels, signs are pointing to a Euroskeptic coalition in the making in Italy between the Five Star Movement and the Northern League.
stratfor.com
Economic Calendar
Here is a list of the U.S. economic events happenning this week.
Last Weeks Numbers
Review Last weeks numbers here.
