March 13, 2017, 4:15pm EST                                                                                           Invest Alongside Billionaires For $297/Qtr

This week will be a huge week for markets. Stocks continue to hover around record highs. Rates (the 10 year yield) sit at the highest level in three years.

This snapshot alone suggests a world that continues to believe that pro-growth policies “trump” all of the risks ahead.  At the very least, it’s pricing in a world without disruptions.  But disruptions look likely.

Here’s a look at stocks as we enter the week. Still in a 45 degree uptrend since the election.

But if we take a longer term look, this trendline looks pretty vulnerable to any surprise.

Let’s take a look at the disruptions risks:

There was a chance that the official execution of Brexit may have come as soon as tomorrow — the UK leaving the European Union by triggering Article 50 of the Treaty of Lisbon. That looks unlikely now, but could come in the coming weeks.  To this point the Bank of England has done a good job of responding and promoting stability which has led to financial markets pricing in an optimistic outcome.

We have the Fed on Wednesday. They will hike for the third time in the post-financial crisis era. We don’t know at what point higher interest rates, in this environment, might choke off growth that is coming from the fiscal side.

This next chart looks like rates might run to 3% on the 10-year.  That would do a number on housing, IF tax reform and an infrastructure spend out of the White House come later than originally anticipated (which is the way it looks).

We also have the Bank of Japan and Bank of England meeting on rates this week. Let’s hope they have a very boring, staying the path, message. That would mean extremely stimulative policies for the foreseeable future 1) in the case of Japan, to continue to promote global liquidity and anchor global yields, and 2) in the case of the UK, to continue to promote stability in the face of uncertainty surrounding Brexit.

Keep this in mind:  The Bank of Japan’s big QE launch in 2013 is a huge reason the Fed was able to end QE in the first place, and start its path of normalization.  The BOJ launched in April of 2013.  Bernanke telegraphed “tapering” a month later.  The Fed officially ended tapering on October 29, 2014.  Stocks fell 10% into that official ending of Fed QE.  On October 31, 2014 (two days later), the BOJ surprised the world with bigger, bolder QE (a QE2). Stocks rallied.

Finally, to end the week, we have a G-20 finance ministers meeting.  This is where all of the trade and dollar rhetoric from the new administration will be front and center. So the news/event outlook looks like some waves should be ahead.  But any dip in stocks would be a great buying opportunity.

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