Alternative Futures - Weekly Blog # 827

 

      

Mike Lipper’s Monday Morning Musings

 

Alternative Futures

 

Editors: Frank Harrison 1997-2018, Hylton Phillips-Page 2018

   

 

       

Could the Future be Better?

While most stock indices are rising, most bond indices are falling.  Normally, fixed income investors are more risk aware than future oriented stock buyers and owners. Some near-term economic indices are rising, while public company managers are laying workers off. (Each worker is an investment of the company, which represents a reinvestment cost if eventually replaced.) Why is this happening when current sales are reasonably acceptable? To many businesspeople, their next planning period look bleak, despite what many political leaders say.

 

The current President is rushing into the 1930s FDR future. This has been magnified by an employment shortage in the prior engine of world trade growth, China. The general assumption in the US is that the current leadership won’t change.

 

 Will it be a Presidential election or one determining the leadership of the two Houses of Congress? According to Nikki Haley, 70% of voters are unhappy with the current candidates likely to lead their tickets. On day one in their next office, they will both be lame ducks. The Presidential term is 4 years, whereas the senate term is 6 years, and they often serve more than a single term. There is considerable evidence that a significant number of voters will decide to stay home on election day. Within each party the centrists tend to be the people not expected to vote. This will magnify the voting power of fringe voters. This was the reason the “State of the Union” speech was directed at tarnishing the other party, rather than at lauding the accomplishments of the party in power. (If this creates a “Nixon moment in the White House it could lead to both leading candidates being replaced. Kim Strassel of The Wall Street Journal said, “Both presumptive presidential nominees are so weak that they’d lose to virtually anyone else”)

Perhaps more important to the world is the statement by Xi, the paramount, but not sole leader of China. He is advocating “High Quality Development” = National Security, Political Stability, and Social Equality. With 90% of the population in the private sector, the level of employment is critical for stability. (China has a history of rebellions starting in the south, with some succeeding in changing the government. Their military posture is more defensive than offensive. However, their defense budget increased 7.2%, which does not include the 30-35% spending on science and space.

 

Other Items of Significance

• Fidelity International announced a layoff of 9% of its global workforce.
• AAII sample survey shows 51.7% bulls vs 21.8% bears, which is an extreme contrarian reading.

  

 

 

Did you miss my blog last week? Click here to read.

Mike Lipper's Blog: Bullish Chatter Leaves Out Useful Info - Weekly Blog # 826

Mike Lipper's Blog: Caution: This Time Is Different - Weekly Blog # 825

Mike Lipper's Blog: What Moves the Stock Market? - Weekly Blog # 824

 

 

Did someone forward you this blog?

To receive Mike Lipper’s Blog each Monday morning, please subscribe by emailing me directly at AML@Lipperadvising.com

 

Copyright © 2008 – 2023

Michael Lipper, CFA

 

All rights reserved.

 

Contact author for limited redistribution permission.