What a crazy week that was!
As you can see on our Big Chart, we were down sharply, then back up and then down to finish down just 20 points (1%) on the S&P after all that fuss. Of course, our headline last Monday was "Watch Out for Violent Swings in the Market" so, if you are reading this – unlike the Media Morons – you were probably not surprised by the action.
We've been having fun getting in and out of Futures plays on the indexes, taking advantage of the swings to pick up a few bucks while we wait to see how the Fed Meeting (and Yellen's speech) move the markets on Wednesday.
Before any FACTS are out that might let investors make intelligent decisions, we have rumors and speculation and this morning it's China's turn to rain MORE FREE MONEY down on the markets with Premier Li saying that "the government has room to step in and has “more tools in our toolbox” should growth flag and affect employment." Isn't it kind of scary when the Premier of China is reading off the same script as Janet Yellen?
Unlike Yellen, this is Li's ONLY press conference of the year but look how much fun he's having – maybe he'll start doing them more often (by comparison NJ's Governor Christie has done 170 in 5 years).
On the economy, Mr. Li said that the government is trying to strike a balance between keeping growth at a relatively high rate and pushing structural reforms. Growth, he said, faces downward pressure but if it begins to affect jobs and income, then the government would take more forceful measures.
“The good news is that in the past couple of years we did not resort to massive stimulus measures for economic growth,” Mr. Li said during the two-hour-long televised news conference. Keep in mind that when Li says “We still have more tools in our toolbox,” that a Chinese toolbox looks like this:
How can you bet against an economy where EVERY Government is doing whatever it takes to prop it up? Well,
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