Small Caps Stall
The stock market was mixed on Tuesday. One of the new trends we’re seeing is weakness from the Russell 2000 which was down 0.34% on Tuesday. It’s now down 7 of the last 10 days. Even with that weakness it’s off less than 1% from its peak. This was to be expected given the powerful run it had been on. The microcaps have also sold off as they’re down about 2% from their recent peak. AAPL has had a great run since I recommended it as it’s up 6.59%. The stock was upgraded on Monday. I think now is the time to take profits as it’s near its all time high right before the iPhone X starts taking pre-orders. Analysts can measure web traffic to get an idea of how sales will be, but until the first orders start coming in, nobody knows what will occur. Samsung has needed to put sales on its devices, so I’m not sure how well the $1,000 iPhone X will sell. Since the Apple iPhone X was announced, Google’s Pixel 2 went on sale.
Fed Chair Pick To Be Made Soon
The latest report is that President Trump has narrowed down his pick for Fed chair to Cohn, Yellen, Powell, Warsh, and Taylor. It’s surprising that the President is considering Yellen and Cohn at all. This ends the interview stage as there won’t be any late comers who might be picked. It’s not surprising to see Neel Kashkari’s name not in the mix because the only person who thought he was going to be the chairperson was Jeffrey Gundlach. The fact that we know all the possibilities should calm the market slightly because the President not caring if candidates had PhDs in economics meant many more possibilities were available. The decision is expected to be made in 2 weeks. It will conveniently come right after the ECB decides on QE for 2018. I think this is more of a coincidence than game theory since the Fed appears to be unwinding the balance sheet no matter who is picked. Yellen and Powell are the doves in the group and they are in favor of the unwind. Secondly, this is a position which will be held for at least a few years, so just basing a decision on 2018 ECB policy would be short sighted.
