Really a macro call based on valuation and you have to consider the dollar as part of it. I just think yen has more potential upside. The its a pair trade, as you said, its not that im short the s p, bearish, its a relative performance. Thinks the s p could still outperform. This is like a mid year trade. Sure, if you were thinking about mean reversion and the huge gaps in valuation and performance thaend youre looking at the recent trend that shows a big reversal from what weve seen in the last few years. For contest, were overweighting em. Ive been flogging this horse for months. So its nigs to hear him agree with it. Eem is up 16. 5 year to date. This is the key to outperformance this year i think is to be in europe, even japan, nikkei looks like it wants 20,000 badly. As were talking, is breaking a level to the upside that it isnt seen since may of 2015. If you look at spy you can see a change in trend, thats coinciding with better economic news. And i genuinely think that whats go
But first we start off with major car trouble. March auto sales implying americas longrunning auto boom could be coming to a screeching halt. Phil . It may not be a complete stall. But this is certainly not good news for the auto industry. Take a look at the numbers for march. The sales rate was 16. 62 million. What were showing is the annual sales over the last six years. Last year hitting 17. 6 million. 16. 62, by the way, that is the lowest Monthly Sales rate since last june. If you look at what didnt sell as opposed to what did sell last month, down 1. 6 . May not sound like a lot, but its down 1. 6 . Cars continue to be a weak spot, down 10. 6 . Trucks and suvs, hanging in there with an increase of 5. 2 . The automakers are quick to point out that they cut back on their fleet sales in the month of march. Thats part of the explanation for why we saw weaker sales out there. But on the other end, youre seeing rising inventories and at the same time dealers across the country are all
Election. What do you do here . The rotation in the financials and i think you can stick with those. Yesterday i took off a lot of the financial positions, took off a few more today. Scott, when you look at whats going on now, howard ludnick was on last night talking about how regulations, if those were put down a little bit, a little bit softer, druckenmiller again said exactly the same thing. If thats the case, that means the financials have room to run and theres plenty of room. There might be even more room. The paper we have been seeing flowing in there, 95,000 bank of america calls were bought yesterday midday, scott. And then sudden ly they come in today for the xlf. Theyve been coming in for almost anything financial. E trade was just a few days ago. They continue to come in for those. When i say they, i mean those with big, big, deep pockets coming in saying the financials are going high. Is this a play out of tech into more cyclical, more value areas, if you will, industrials
A lot of other people did. A lot of people were short going into the report yesterday and looking for the market to make that big correction. They did what we thought they would do and, like i say, steve still had the odds as far as they were giving him those odz yesterday, they were very good. It was a reasonable bet that maybe something would happen. It didnt. They just have gone out and jawboned again, judge, and didnt do it. So they lose a little credibility for going out each time that they do that but, nonetheless, i wouldnt be an aggressive buyer here because i think theres smoke in the house. Not saying the house is on fire. Saying theres smoke in the house and so you have time what does that mean . That means you have time between now and december to get your belongings together and get the heck out. Pete . You know, the one thing ive done, scott, the game plan. One of the questions they asked the producers before the show, what are you doing . How did you change your game pla