E Market Briefing For Friday, Dec. 29

Addiction to momentum dominated 2017.Extremes were amplified not only in politics, in the hostile cultural environment, but in various classes of financial assets too. It’s very hard to express the risks of constant frenzies, whether that be in life or in markets.

As such we’ve spent a good part of 2017 pointing out how there would not be a catastrophic market decline; just corrections; and surely open-minded for more, but only if there was an exogenous influence to impede progress both internationally, and with respect to the absolutely essential tax reform.

No, we’re not entirely pleased with the Tax Bill nor Healthcare issues; but it is what it took to prevent a meltdown and hold stocks up until the very late (no real Santa Claus rally) defensive chop; given our month-long suspicion about investors front-running the new tax year, fairly uniquely this year; as well as booking more momentum gains once sales would settle in 2018.

In sum: it has been my assessment that the market cared very little about many macro issues provided things didn’t literally blow up; and focused on the benefits or reduced regulation; a friendlier corporate tax environment; a fairly stable world because of a stronger foreign policy; and realization by a lot of others that the United States is not going to cede global leadership (especially financially); as so many ‘proclaimed’ was going to be the case.

Leadership in this case referred largely to Energy self-sufficiency as well of course to the ‘manufacturing renaissance’ I’ve called for over many years. Whether we’ll really get that is debatable; but as a Nation we must try if the trend towards gradual erosion of our financial position was to be stemmed.