Blockbuster Week

  • June 28, 2004
  • Peter Navarro

The Savvy Macrowave Investor: Giant
Mess’O’Potamia

David W. Aloyan is a Technical
Analyst providing analysis of the markets and securities.  Peter Navarro is a
business professor at the University of California-Irvine.  He holds a Ph.D. in
economics from Harvard University, and is the author of “If It’s Raining in
Brazil, Buy Starbucks” and “If the Market Moves, Will You be Ready?”  
They are the founders and managing members of Platinum Capital Management, which
provides investment management services to both institutional and individual
clients.

 

Market
Trend: Sideways

Market
Outlook: Mildly Bullish (Navarro)

David’s
Pick: On Vacation

Peter’s
(Penny) Pick: XYBR, Reiterate WMB

 

Navarro’s Broad Market Outlook: Treading Water

If the summer rally is to get any
lift off, it’s going to have to be by mid-July on the wings of Fed moderation on
rate hikes and a breakthrough earnings season.    Otherwise, we are going to
slouch into Labor Day with election jitters and geo-political concerns taking
center stage.

My own view is that the odds of
such a bullish breakthrough have more kinship to a spin of the roulette wheel
than a “see’em and raise’em” bet on three kings.  My latest gut check comes from
last week’s downward revision of the GDP below 4% for Q1 COUPLED with an upward
revision in inflation.  The first seeds of stagflation?

As for the geo-political front,
Mr. Bush’s Giant Mess’O’Potemia (an homage to the Daily Show) gets worse with
each passing day.   The emerging consensus, based on books such as Richard
Clarke’s Against All Enemies, is that: 1. we went into Iraq fighting the wrong
enemy (Hussein rather than Al-Queida), 2. we went in with too few troops
(because of miscalculations by Rumsfeld and Wolfowitz), 3. the insurgency is
growing more internally with each day as Shiites, Sunnis, and Kurds also get
ready to square off against each other, that Iraq has become what a CIA agent in
a new book has described as a giant Muhajadeen magnet, and that it must all end
badly — or at least continue badly through the November election.  Throw on top
of that dung pile the prospect of some pre-election terrorism on home soil and
Bush may well become a four letter word — which brings us full circle to the
election jitters likely to roil the markets.

The Week’s Macro Data Market Movers: Blockbuster Week

 


 

^next^

         
This is a 9 ½ on a scale of 10 when it comes to blockbuster data weeks.  We’ll
get a nice snapshot of the consumer on Monday and Tuesday with personal income
and confidence.  Wednesday, expect some fireworks both home and abroad as the
Fed raises interest rates and Iraq sees a transfer of power.   The ISM will get
us an equally nice snapshot of the supply side with the ISM.  And we will finish
off the week with the Big Kahuna Jobs Report — which should give us a good idea
whether Mr. Bush’s goal to finish in the green on jobs growth for his first term
is a realistic one.

All in all, a week to hold on to your hats — and
perhaps cash.

 


Peter’s Picks: XYBR, Reiterate WMB

Here’s what Reuters has to say
about my latest penny pick, Xybernaut (XYBR) for which I have been building a
pretty sizable position:

 

Xybernaut Corporation is
engaged in the research, development, manufacture, marketing and sale of mobile/
wearable computing and communication systems and software and service solutions
designed to enhance productivity and improve product management, asset
management and the accuracy, timeliness and utilization of critical enterprise
data.

 

In other words, this is a pretty
pure play on small, wearable computers.  One good thing about this company is
that it has been around since 1990.  It’s technicals look good, there are no big
insider sales, they’ve opened up a sales front in China, they are pitching some
interesting homeland security applications too, and they’ve gotten some nice ink
in PC Magazine.


https://www.pcmag.com/article2/0,4149,1131577,00.asp

 

Also, a nice little collaboration
with Hitachi.

 


https://www.t3.co.uk/news/default.asp?pagetypeid=2&articleid=15202&subsectionid=753

 

Finally, I reiterate my WMB
inclinations.

 

Bon Chance!

 

If you have a favorite macroplay
or stock you would like us to consider in this column, send an e-mail to

peter@peternavarro.com or go directly to

https://www.peternavarro.com.  We’d love to hear from you.   

 

 

 

 

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