Friday Night's Show Highlights:
Next week starts with Russia and could end in profits for you!
Friday, July 18, 2014
CHANGE NOTICE - Mon./Tues. now shown on Wednesday night's show.
OUR "PIVOT" TO IMPROVE EVERYTHING for you... Please read explanation here>>
Jim: Talk about uncertainty. With all the tensions in Russia and Ukraine, and of course, Israel and the Gaza Strip, we simply can't chart a course through next week, navigating by earnings reports alone, even though this is going to be the height of earnings season next week.
That's why next week's Game Plan starts with Russia. We need to see something this weekend that makes it clear that Russia and the United States aren't on some sort of collision course, irreversible, after that tragic plane crash over Ukraine. I say that, because we could be in the midst of a terrific rally based on earnings, and it might all be wiped out by geopolitical events that are tough to get your arms around.
I want to want to be clear about this. I'm not saying you should sell stocks because of Ukraine tensions. I am saying that others surely will, though, even though there are very few links between Ukraine and our markets.
Yes, some financial companies have relationships - particularly Visa and Mastercard - big businesses in Russia, but a small percentage overall. Plus, global tensions lead to a flight to safety. It always happens, which means a flight into U.S. bonds. When people buy our bonds, of course, interest rates go down. And when interest rates drop, the bank stocks fall too. It's just the way it works. They always do better when rates are higher. So Russia/U.S. tensions equal a decline in the banks. I point this out because do we really care about a bank's earnings, if it reports on a day when these tensions explode? Not really. And remember, the bank stocks had been the leaders, going into this incident. As long as you understand the correlation, we can now return to our regularly-scheduled Game Plan...