Excerpt from Louis Navellier's Marketmail - 06/12/2018
As we go to press, President Trump is meeting North Korean Supreme Leader Kim Jong-un in Singapore. Over the weekend, there was a lot of outraged reaction by G7 leaders to President Trump's appearance at the G7 meeting, but I expect that most countries will follow China, which offered last week to purchase nearly $70 billion of U.S. farm, manufacturing, and energy products in order to keep the trade flowing.
The truth of the matter is that the U.S. has the leverage, since it is typically the biggest buyer of exports. Countries with big trade surpluses, like China and Germany, do not want to jeopardize their lucrative trade relationships. President Trump's tariff threats are merely tactics to negotiate more favorable trade deals. It will be interesting to see how each country responds, but I expect the U.S. to prevail in the end.
The Fed is also meeting this week. New Fed Chairman Jerome Powell was reportedly hand-picked by Treasury Secretary Mnuchin to be more "market friendly." The Fed wants stable financial markets, since it is good for the banking industry, especially now that some major money center banks are under stress from troubled emerging markets and the flattest Treasury yield curve in over a decade. So again, I expect a relatively dovish FOMC statement that will continue to boost both the bond and stock markets.
In bringing the global headlines back to the world of investing, Bryan Perry favors covered calls on U.S.-based technology stocks. Gary Alexander also counsels focusing on domestic stocks, due in part to the rise in global conflicts - soon to be dramatized in the World Cup matches in Russia. Ivan Martchev sees problems in several emerging-market currencies as well as the deflating bitcoin bubble, while Jason Bodner compares sectors to sports teams (and stocks to sports stars) with Info Tech being the new sector "dynasty." In the end, I'll return with a look at small stock realignment and the Fed's meeting this week.