Why Banks?

Who doesn't want to own a bank?

To follow up with Friday’s comments, lets review banks quickly. They were up strong on Friday due to JP Morgan and Citigroup strong quarter and positive guidance. The week before JP Morgan’s CEO declare we are not out of the woods in regards to the banking crises.

If you took his words to imply stock prices would go down, you were wrong. Have a look at JPM and C.

Now, another up and comer, NYCB has stalled its upward trajectory after its 30% move higher. Eventually the news covered the concern: loyal customers.

After buying the assets of Signature bank, it’s not a sure thing that the customer base they bought will stick around. “Hey, it’s a free country and I’ll take money wherever I want.” But, receiving close to 8% dividend and the discount to book value allows you a moat to wait it out.

Our view of buying large banks and Nasdaq, while hedging by being short SP500 has done well.

And, for the people, that do not understand how the banking business works in the US and why our economy has tended to be the leader in the world since 1920s please read this note by a well known economist Jim Bianco on Twitter (see screenshot at end of note)

As Monday begins, here are some key dates to monitor. We are in a geopolitical world and it’s not just economic anymore. When the forums and financial news begin to list geopolitical events as they categorize economic data, then my work in this arena will be done.

April 16-18 - China defense minister to visit Russia. The best way to monitor this is through Gold. GLD.

April 16 - Germany has shut down its last remaining nuclear power plant.

Many smart people, like Elon Musk, basically said this will effect the national security of Germany.

Coal. Natural Gas.

May 18 - Grain deal that Russia has honored and kept global grain prices low.

I would watch JJG

By watching Gold, Natural Gas, and Grain prices will be help ascertain what is occurring as we read headlines that may not match what the commodity markets are doing. A divergence could help better alert us as to a discrepancy and help us better gauge opportunities in the markets.

Stock highlight is COTY

It’s a make up company that was hit hard for many decisions it has made in the past. It’s a $12 stock. I feel it can be $16 this year.

Apparently, the financial numbers they are reporting shows they are a legitimate contender and will be around for awhile.