I spent yesterday morning in meetings with the folks at Janus Henderson here in Denver. I’m a big believer in the idea that active fund managers will be worth their weight in gold (or should I say, bitcoin?) in the bond market as rates, global economic growth, and perhaps even inflation, potentially chart new courses in the coming quarters/years. The bottom line here is that London-based portfolio manager John Pattullo runs a strategic income fund with a macro-based theme approach and a strong record. As such, chatting with John and his Denver compatriots in the high yield/multi-asset class space was very productive.
At the mid-morning break, I checked in on the markets and was pleasantly surprised to see a double-digit gain on the S&P 500. When the meetings resumed, we chatted up the likelihood that the Case-Shiller data, the Richmond Fed Manufacturing Index reading, and the best Consumer Confidence numbers in 17 years were all contributing to the stock market’s rise.
As we were preparing to leave for lunch, I saw that stocks had advanced further. I learned that comments from Fed Governor Jerome Powell relating to the course of Fed policy and deregulation during his confirmation hearing to become the next Fed Chairman was the likely culprit for the spike to new highs.
Then, about the time the salads arrived, stocks began to nose-dive, losing about half a percent in fairly short order. After some brief exploration on our phones, we discovered that North Korea had decided to launch a new ballistic missile. A missile whose trajectory could purportedly hit Washington D.C.
Oh, and speaking of Washington, we also learned that the President had called off a meeting with top Dems to talk about averting a government shutdown on December 8th because, in Trump’s words, it didn’t look like a deal was gonna get done. Awesome.
Given that some volatility appeared to be returning to the corner of Broad and Wall, I immediately tuned into the business channels as I climbed into the car for the ride back to my office.
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