28Sep10:40 amEST

This Time Around, They Are Not Waiting for You

The Fed's monetary policies over the last twelve years or so (some would say twenty-two years, or more) have affected markets, the economy, even society and social issues in ways the overwhelming majority of people may never fully grasp.

As an example, did you know that one of the silver linings from the Great Depression was that the wealth gap in this country narrowed considerably? While not fun for the Roaring 20s riches-to-rags stories, some of whom committed suicide as a fallout from the big downturn, again the silver lining was that this country had a much more unified, "we are all in this together" feeling. And that helped us head into WWII as a unified nation and eventually lead to the prosperity boom of the 1950s. I realize I am simplifying things here. But the point holds true, nonetheless. And this time around, since the financial crisis in 2008 the wealth gap has only widened, leading us to, you guessed it, a much less unified nation. Some will blame, essentially, figurehead politicians. However, you can go back to the origins of this country and see the same aspersions cast on Congress, the White House, etc.. I blame The Fed. 

On a market level, Monday morning massive opening gaps used to get fade a fair amount of the time. Thus far this morning, that is not the case, although the VIX is suspiciously flat. Solar stocks are heating up again, as SPWR is a name we went long into the weekend. I view the solar space in the TAN ETF as a rising star, especially of oil and oil stock can put in a good low anytime soon and turn back higher. 

Speaking of commodities, we have some stealth M&A this morning, as CLF, the largest flat-rolled steel producer in North America, is buying MT for $1.4 billion. While not a mega deal, this is still noteworthy as the global materials/miners/energy/commodities plays have been far less sexy to tech and even in outright bear markets, for years now. 

Typically, we do not see M&A during bear markets (unless it is a shotgun wedding like we saw with the banks back in 2008), even though logically that is when these firms are most on sale as markets overdo the downside. Typically, the market needs to turn back higher for a few quarters and give the all-clear sign before we see deals getting done. 

But this is not your typical market, and this is not your typical Fed. The market's verdict of the CLF MT deal? Both stocks are sharply higher as I write this, which is as close to a Wall Street cheer from actual humans as you will find these days...

Taking Notice of These Moves... Still King of the Castle


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