3.1-The Morning Call: The Earnings Recession is Officially Over

The Q4 S&P earnings are up +5%. Two Up Quarters. The Earings are rebounding, The prospects are for that to continue. That is the fundamental underpinning for the Trump Bump. the market is also taking comfort from his re-iteration of Campaign promises. That's exactly what the market needed to hear. Those waiting to see the details will leave a lot of money on the Table. The Reaction to his speech is straightforward. USD Up. Stocks Up.Treasury prices Down.

The criticism is the lack of Numbers. Good Sound Bites. " "Renewal of the American Spirit. Factories scattered like Tombstones. Historic Tax Reform. Massively reduce Job-Crushing Regulations". Sceptics will stay that way. We like that Trump is doing what he said he would. How non-Political?

Governor Dudley said yesterday that the "Case for a Hike is Compelling".He also said that"sentiment has improved quite markedly post the Election". we've written extensively about 1994. The Market finally got it. The FED was Raising because the economy was shifting into high gear.The market took off. If Yellen does raise 3 times this year, markets should rocket. So far the Rising tide has raised all Boats. We read that as signalling that we've not hit the mid point of the Bull Run YET.

Canada had a good day yesterday. Trump reminded us of his Executive order to allow Keystone. Trudeau was the only foreign politician to be named. Our Immigration policy of using a "POINTS" system to rank Immigrants was Praised. Justin was praised for his commitment to Female Entrepreneur. It was a huge success. Congrats to Christia Freeland for the Idea.

The other signpost we are following is the Stock:Bond spread. That's what happened during the summer of 1987. It closed with a vengeance. The Trigger was Portfolio Insurance. Everybody has forgotten about that product. This Cycle's Pro-Cyclical product is the ETF's. Redemption leads to Forced selling. In effect market orders. Most don't realise that at times of stress, there are large fees. Market Impact. Liquidity Pricing Issues.We see to be experiencing that currently in the Gold markets. Bullion is down. Not that much. Stocks are getting hit way harder.

Edward Pennock CFA, Founding Partner

3.1-The Morning Call: The Earnings Recession is Officially Over

02.28-The Morning Call: Do Calm Markets mean a Crash is Coming?

2-2 The Morning Call:Yellen does Nothing. How long is she for the Job?

7.18 - The Morning Call: What a Week that was.

Fed, BOJ in the spotlight but no fireworks expected

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