With virtually every bank now urging their clients to fade the rally in US stocks, and instead take advantage of the gaping chasm that has opened up between US and European stocks to put on a pair trade that is long Europe and short the US, “renowned commodity investor” Dennis Gartman has defied the sellside again, and in his latest note writes that he “officially” bought US stocks while selling Europe “generally via the Euro Stoxx 50 Index.” So far, the trade appears to be working, to wit:
The US equity market futures are soaring on [the Nafta] news with the Dow futures trading approximately 200 points higher… or about 0.7% higher… and with the S&P futures trading 17- 18 “handles” higher o4 +0.5%.
On Friday… finally… after discussing the idea at some length for some rather long while we actually and “officially” did buy US stock indices while selling Europe generally via the EURO STOXX 50 Index and we got very, very lucky for as we write we are nearly 1% higher on the US side of the trade and nearly 1% better on the European side of the trade. The only question now is when to add to the trade and we shall wait to see how far this initial trade moves before adding to the position on the inevitable correction.
We may scoff at President Trump’s insistence that the new agreement not be called the NAFTA and must henceforth be referred to as the USMC but the fact that agreement has been reached is hugely positive news and has sent US stock index futures soaring. Canada’s stock market shall follow suit, and so too should Mexico’s.
As for our retirement account we’ve done nothing for the third or fourth day in a row, remaining long of gold and remaining long of bond and/or bond-like funds, most of which went ex-dividend on Friday. We’ll be looking to swap out of the funds we have for funds that go ex-dividend in the next week or two, but otherwise we are very likely to sit tight and do nothing else.
As an added bonus, here is Gartman discussing the SEC’s settlement with Elon Musk…
Finally, the SEC has proven itself to be emasculated in its decision to fine Elon Musk and Tesla a scant $40 million… $20 million for both… and to have Tesla remove Mr. Musk from his position as Chairman but allowing him to remain as the company’s CEO. This is comically insufficient punishment as far as we are concerned given the seriousness of the offenses. Shame upon the SEC for this diminished decision.
… and his take on the ongoing Kavanaugh nomination drama:
We feel again compelled to discuss the events of last week as Judge Kavanaugh’s and Dr. Ford’s appearances made the most compelling television we’ve witnessed since the Watergate hearings nearly four decades ago. Let us be quite honest here: we were stunned by the sincerity and compelling nature of both Judge Kavanaugh and Dr. Ford. As we said here on Friday, there is no question in our mind but that something horrible happened to Dr. Ford that night in ’82. Her story was real; her appearance compelling. Her desire initially to have remained anonymous was obvious and just as obvious was the vile nature of the Left’s use of her as an attack point against Judge Kavanaugh. Initially, and before her appearance, we thought of her as a Left-wing partisan. Clearly, she was not and is not. We are convinced that was not her intention.
Shame then upon Sen. Feinstein for having rather withheld Dr. Ford’s letter to her until so late in the proceedings and nothing shall ever convince us that someone in her office… or perhaps even she…had leaked Dr. Ford’s letter to the press. That was a shameful act of partisanship on Sen. Feinstein’s part and she should be ashamed of herself. Obviously, however, she’s not only not even slightly ashamed, and we suppose she now sees herself as an icon of the Left. We are all diminished for her actions and what we’ve been forced to witness.
Indeed, what last week and what this week shall be about was and is the fear on the part of the Left that it is about to lose control of the Supreme Court for decades into the future with the appointment of Judge Kavanaugh. The Left has viciously sacrificed Dr. Ford, her family, Judge Kavanaugh and his family for that fear and they are willing to embarrass the US in front of the world to stem that fear. Shame upon Sen. Feinstein; shame upon Sen. Booker; shame upon Sen. Coon et al. Who, after this shameful scenario forced upon us by the Left, shall ever allow his or her name to be put into the nomination process for any ranking government position? Who… really, who?
Barring some further salacious rumors regarding Judge Kavanaugh’s past this week, when this is done, Judge Kavanaugh’s nomination to the Supreme Court will pass through the Senate with more than 50 votes. When the vote counting is done, but before the vote is actually taken and when Sen. McConnell quietly reports to his fellow Senators that he has the votes to win, Senators Manchin and Heitkamp will vote for his nomination too giving the vote a clearer majority of perhaps 53-47. Judge Kavanaugh will become Justice Kavanaugh but the smell… the stench… of what the Left has done shall linger for years into the future. Again, shame upon them. We are disgusted, and we are embarrassed.
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