Copper, nickel, lead and zinc are all lower by more than 2% this morning, perhaps a delayed reaction to weaker than expected Chinese PMI data.
Caixin manufacturing PMI for April came in at 50.3, compared with an expected level of 51.2, taking the measure to a seven-month low.
While copper inventory levels might be elevated, that’s not the prime reason for the rout. I believe tensions in the Asian theater, coupled with the specter of a government shut down, is leading people into a risk off mode. Plus, we have the French elections on May 7th and earnings have been pretty dreadful — considering the misses at AKAM, AMD, TWLO and AAPL.
So, we have a risk off scenario in May. Color me surprised.
Let’s try to remember the Federal Reserve is being managed by a mentally addled woman, whose hell bent on the total and complete destruction of the Unites States economy — all of the purposes of proving her worth.
That being said, I am comfortable being long defense stocks, positioning for war and nation building. However, I am a little uneasy about my overall exposure, which is 100%. I might pull in a little here, in order to have some idle cash for an eventual oversold signal.
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I’m beginning to like the idea building a 20% position in $TLT to keep in my long term portfolio as a ballast. If the market where to become very oversold I could sell half my $TLT to deploy into stocks. Helps you sleep at night having one foot on the Ark and it obviously yields more than cash.
Interesting article about the beating the perfect portfolio with 20% in $TLT.
https://seekingalpha.com/article/4061926-beating-perfect-portfolio-3-tickers