U.S. Markets Broadly Flat and Trump Rally Takes a Breather

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

U.S. markets closed broadly flat this week as U.S. markets continue to consolidate their gains of the past three months.

The Dow Jones pulled back 0.30%, the S&P 500 traded essentially flat and the Nasdaq rallied 0.60%. The MSCI Emerging Markets Index also ended the week where it started by rising a mere 0.18%.

This flat performance was broadly reflected in your Smart Money Masters portfolio. Your biggest gainers were Liberty Broadband (LBRDK), Kraft-Heinz (KHC) and your latest recommendation, Markel Corporation (MKL), which eked out gains of 0.66%, 0.29% and 0.11%, respectively.

Three developments about financial markets caught my eye this week.

First, U.S. small caps, as measured by the Russell 2000, have all but slipped into negative territory for the year. As these stocks tend to lead the market, odds are that we’re due for some weakness in the months ahead.

Second, crude oil has now fallen for seven straight days, and 10 out of the past 11, sinking to a multi-month low in the process. Those kinds of extreme moves are often followed by equally strong bounces. Among your current Smart Money Masters portfolio holdings, Wilbur Ross’ Navigator Holdings (NVGS) is the stock most impacted by this sharp movement.

Finally, market sentiment, as measured by CNN’s Fear and Greed Index, now has moved from “greed” to “neutral” for the first time since Donald Trump’s election on Nov. 8.

Portfolio Update

Charlie Munger’s favorite stock, Costco Wholesale (COST), slipped below its 50-day moving average and is now technically a HOLD. In my view, the key reasons behind the pullback are negative sentiment toward retailers and Costco’s hike in membership fees, which both are temporary setbacks. If you are of a contrarian bent, you may view the recent pullback in the stock as a buying opportunity.

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PayPal (PYPL) pulled back this week after Google announced in a blog post that users now would be able to send and receive money in their Gmail app. The jury is still out on how this could threaten Paypal’s Venmo feature in the long run. We’ll be keeping a close eye on Smart Money Master Carl Icahn’s holding in the stock.

SMM 3-15-2


Nicholas Vardy

Nicholas A. Vardy

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In John Malone’s empire, Liberty Broadband Corp. (LBRDK) is part of a conglomerate of related media investments made under the Liberty Media umbrella.


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