Don’t forget to vote if you live in one of the 12 states holding a primary today, which includes Virginia. Candidates are being narrowed down and Hilary Clinton and Donald Trump appear to be the frontrunners at this point in time. Today is also the first day of the month; our readers know pension and 401K money is always put to work in the market the first of the month. The first of the month is also PMI day, and other economic data is released like ISM, Motor Vehicle Sales, and Construction spending. Important numbers include: Purchasing Managers Index (PMI) at 51.3, and ISM at 49.5, both still close to/or below the contraction line. In the U.S., manufacturing represents 14% of US GDP, but it accounts for 68% of the S&P500 profits. Friday’s data is the most important economic day of the week, as the employment data is released.
The S&P500 bounced today but will have a difficult time moving significantly above 1965-1995. New money always moves markets temporarily. Emerging markets bounced today also. One day in the market does not make a trend, but you would have a hard time realizing this, if you watch CNBC at all today. They were smiling ear to ear all day and one would think a bull market was in play.
Emerging markets bounced up over 3% today, but are down 30% from May of last year even with this bounce. What happens on a day to day basis can be a distraction or just noise if an investor is not focused on trend changes and playable bounces; not the day to day movements. The bounce allowed MCS to write another option today; our total option premium to date is 3% to the upside. We wrote the first call option of the year.