Apple takes a hit
With nominations getting closer and differed policy statements by both parties, it is difficult to try to analyze what each party's "victory" in November would mean for the U.S. economy and global circumstances.
On the one hand, the Democrats have basically "locked up" Clinton as the nominee, (pardon the pun), and the Republicans appear to be locked in a battle between Cruz and Trump. Whichever party emerges victorious in November, it will be up to the new president and Congress to bring us out of the recession I fear we are headed to in the near term.
We also feel a global recession is unavoidable and that would also impact the U.S. as far as exports. The Chicago Purchasing managers index declined to 50.4 in April, indicating that manufacturing activity in the U.S. has weakened so far this year. I recommend holding off any new investments and would carefully scrutinize current investments and limit exposure should my forecast materialize. Now for some actual information.
The 30-year Treasury bond closed Friday at 163 06/32nds, up 14 ticks as money once again made the "trip" from equities to the relatively safe haven of treasuries. Yields therefore were the lowest in 10 days, but for the month of April actually rose across the board. We see the correlation between equities and Treasuries remaining intact where losses in one produce gains in the other. We suggest the sidelines for now.
The Dow Jones industrial average closed at 17,773.64, down 57.12 points but for the month of April managed a gain of 0.5%. The S&P 500 closed at 2,065.30, down 10.51 points but for the month gained 0.3%. The tech-heavy Nasdaq closed at 4,775.36, down 29.93 points and for the month lost 1.9%. Lower than expected earnings from major corporations such as Apple and Intel prompted the selloff in tech shares.
Apple lost 14% and Intel lost 6.5% in April. A major investor, Carl Icahn stated on Thursday that he had "dumped" all of his Apple stock over concerns over China. We once again suggest strongly the implementation of strategic hedging programs to avoid what we see as a possible "re-visit" of 2008.