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Expect more 1000-point turns for Dow in 2019: Mohamed El-Erian




Goodbye 2018. Don't let the door beat you … yadda yadda.

The screens reflect something green this morning, although there may be little ointment in a year set to be the worst since the financial crisis for several major indices such as the Dow Jones Industrial Average

DJIA, -0.33%

and S & P 500

SPX, -0.12%

Diving right in, our last day call for the year comes from Allianz Chief Financial Advisor, Mohamed El-Erian.

In a interview with Fox News on Sunday, El-Erian said he did not see a US recession, but believes that investors can see more of 1000-point fluctuations for Dow as a wild day last week. "It's our new reality for a while," El-Erian said, adding the reasons why that might be the case.

These are: 1) Jitters of uncertainty for growth in Europe and China, the latter of which only reported factory activity on a two-year low in December. 2) Central banks such as the Fed are "no longer buying securities" nor holding interest rates. 3) Wall Street is no longer BTFD, but "sells every rally", which is exaggerated by "computer trading."

But the market must focus on one thing, that the United States will "need a massive market accident to push us into recession", even if it will slow down unless there is something to build on pro-growth policies. "He expects that The economy will increase 2.5% to 3% by 2019. More on the pessimistic side, Goldman, which cuts its growth outlook for the US to 2% from 2.4% for next year, but again sees little recession risk.

As uneven As 2019 may have shown to some investors, it is always worth remembering that there are lessons in some big or terrible year.

Trader Stefan Cheplick, who cut his teeth on investing around in the financial crisis, shared 50 things he learned in 2018 in a blog post, and more than a couple stand out. Take No. 9, remarkable with first quarter revenue around the corner and lots of jitters where they are concerned. "Quarterly revenue movements are noise. Avoid them at all costs. Stocks move 10%, 15%, 20%, for a few seconds after a earnings report. Don't ever play in that game, he says.

Read: Here's why the stock market bulls banks in January to smooth the ship

At No. 18, he says that the margins are now his favorite metric to follow, replacing free cash flow. "Checking margins is electricity. It's a company you want," he writes. He zeroes on buyback with No. 20, says after they are useless. "You will find companies that have not yet announced repurchase but are able to do so. Sell your shares back to them."

Here's No. 34: "I used to believe that politics doesn't matter when I was wrong, says Cheplick. Yep.

As for what he learned in 2017, one now resonates. "The three-day rule will save you forever – never buy a stock for a big drop. Always wait at least three days, he says. There may be some advice that will be useful again in 2019, if a turbulent holiday season is a taste of what comes.

Feliz año nuevo from us all need to know.

Market

Dow

YMH9, + 1.10%

S & P 500

ESH9, + 1.01%

and Nasdaq

NQH9, + 1.20%

futures are higher. It is after a not so big season for Dow, S & P 500 and Nasdaq

COMP, + 0.08%

on Friday, though things looked better every week.

Check out the latest in Market Snapshot

Crude

USA: CLU8

is up, but faces its worst year since 2015. The dollar

DXY, -0.23%

and gold

USA: GCU8

is quite stable.

It is against Europe where Stoxx 600

SXXP, + 0.41%

logged their worst return since 2008. The Hang Seng

HSI, + 1.34%

was one of the few markets open in Asia and closed 1.3%, but lost close to 14% in the year.

The chart

S & P 500 is a "long way from a market bottom", says our day outline by Otavio "Tavi" Cosa, global macro analyst at Crescat Capital. Here are his tweets that show that the US cyclical cycle pulls up and therefore has many disadvantages for stocks.

Stat
Getty Images

2008 – There is a marker on how stocks The world over has done this year. The worst since the list is long and often goes out in 2008, the height of the global financial crisis.

As of Friday's season, Dow was a 1.656.82 point loss in 2018, or 6.7% for its biggest one-year point and percentage decline since 2008. It is also the worst year for S&P 500, Nasdaq Composite, Stoxx Europe 600, Nikkei

NIK, -0.31%

and the Shanghai Composite

SHCOMP, + 0.44%

Buzz

"Great progress is being made," Trump tweeted on trading Saturday, but some concerns he may be exaggerating to place markets. Meanwhile, the White House pushes China to cough up solid plans after the promises it made after the two country's leaders met in Buenos Aires a month ago.

At the closing front, talks talked about the weekend, when lawmakers went home for the holidays. Meanwhile, Trump says no wage increases for federal employees in 2019.

Tokyo authorities will catch ex-Nissan

7201, -0.51%

Chairman Carlos Ghosn another 10 days.

Scientists have developed fingerprint images that they say could unlock one-third of their smartphones.

With his fate in the balance, bankruptcy dealer Sears

SHLDQ, -2.24%

will close 80 stores by the end of March 2019.

Steve Eisman, best known for his "big short" in the US housing market in 2007-2008, sees a 50 % chance of a "hard" Brexit. He shortens major U.K. dealers and banks, such as Marks & Spencer, the Royal Bank of Scotland

RBS, + 2.84%

RBS, + 1.21%

and Lloyds

LLOY, + 1.25%

LYG, + 2.00%

The economy

It's the quality, not the amount this week. Among the highlights, weekly unemployed claims and the ISM manufacturing index, and Friday's payroll wages, the interruptions may interrupt some data. The Economist says this is the decade's best young economists.

Random

reads Putin to POTUS in holiday report: "Let's talk."

These Iranian immigrants have tried to cross the English channel.

Louis CK takes heat over the leaked sound of a new routine

Terror threat means tighter security for New Year's Eve in Paris and NYC takes no chances either

Time is up for French leaders who avoid taxes

More violence and death for journalists in 2018 than in any other year on record

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