The Zigmont Report (Daily Market Recap for 4/5/18)

Mike Zigmont

Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide.  Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business since 2008, sending it daily shortly after the market close.

The opinions expressed below are my own

Bulls gonna bull.  After yesterday’s near-death experience, bulls gained some confidence.  News was pretty unremarkable, which is good for the bulls right now.  Mark Zuckerberg said some soothing things about Facebook today and FB climbed nicely.  The other big beaten-down stocks perked up in sympathy and investors are no longer fretting about whether Trump will attack Amazon again, or whether data shared through Facebook threatens their business, etc.

Those concerns are sooooo two days ago guys!  Today investors looked at the dips and licked their chops. Buying opportunity!

How quickly everyone forgets!

I’m not making a valuation judgement on FB and AMZN or the other big stocks right now.  I’m simply noting that the attitude of the market has radically switched… without much cause if you ask me.  So the risk/danger is what if the attitude turns yet again?

It’s not like Trump said he’s done kicking AMZN around.  It’s not like someone hit the big undo button w/r/t the data sharing/gathering at Facebook.

I don’t know the *correct* answer to the question “what’s AMZN’s/FB’s value?”  Ditto for the whole market.

I do know that we are, at the moment, in a greed/fear blender more than anything else.  How’s everyone going to feel tomorrow?  Beats the heck out of me but it’s a safer bet to plan on the currently fickle sentiment to change rather than for it to persist.

Anyway….. tomorrow is all about the 8:30 AM release of March nonfarm payrolls data (185k est vs 313k prior).

All the other drama of late crowded out our usual attention on the coming jobs data.  This matters to the Fed and so it matters to the market.  The Fed has quite strongly indicated that 3 hikes per year is an almost-set-in-stone plan…  so only the craziest of nonfarm outliers will shake the market’s expectations.

We’ll just have to see if we get a crazy outlier or not.  I’m guessing if the number is between +100k and +350k, US equities aren’t going to move much.  Outside those numbers?  Fireworks.

See you tomorrow,