Expect a “flat and skinny” kind of year for stocks.

That’s according to Peter Oppenheimer, Goldman Sach’s chief global equity strategist, who thinks the big gains that kicked off the year will fade as 2019 progresses. Wall Street broke with a winning streak Tuesday, which has sparked some speculation over whether we’ve squeezed all we can out of those post-holiday gains.

“At the end of last year, particularly in December, markets became too negative about the outlook for growth this year. We saw a very sharp drawdown, a significant derating of risky assets and now a rally,” Oppenheimer told Bloomberg at the bank’s Macro Conference Wednesday.

“But I think that rally has got limits because, fundamentally, we’d expect quite low profit growth over the course of this year across major equity markets, and I think that will cap the upside as well,” he said. That means even what some see as White House cheerleading for stocks may be less effective this year:

Read:Here’s Trump’s stock-market scorecard after 2 years in office

The feeling that we’ve seen the best Wall Street has to give right now is also the theme for our call of the day, which comes from Smead Capital Management, who say in a blog that last year might have marked the top for investor darlings Amazon AMZN, -1.78% and Netflix NFLX, -0.05% .

The money management firm’s chief executive, William Smead, reminds us that Microsoft MSFT, -1.24% , which shot up during the manic years of the late 1990s, took 16 years to return to its old high after the tech bubble popped. Cisco CSCO, -1.38% and Intel INTC, -0.85% , meanwhile, have never revisited their highs from 2000. Investors got dragged along, because of a few bear-market rallies that finished out the bottoming process for those stocks, he said.

Smead, Bloomberg

He notes that investors endured five separate such rallies for Microsoft, and Cisco and Intel had three each. He uses this Bank of America Merrill Lynch chart tracking a range of asset bubbles over the last 40 years, as evidence that we’ve seen the peak for Netflix and the like today:

“If today’s e-commerce glam stocks peaked last year as the multi-bubble chart shows they might have, could this current rally in shares of Netflix (NFLX) and Amazon (AMZN) be the one of the big rallies? Are these rallies part of the process of bottoming them for an extended purgatory period like the last tech euphoria episodes?” asks Smead.

Answering his own, question, Smead says the current “mania” by industry experts, stock pickers and the media over these companies and others right now bring back memories of the dot-com bust boom.

“Our rule is that if everyone is calling an up move a bear-market rally, it is likely a new bull market. If they are all viewing it as a minor interruption in a bull market and touting how much these favorites are going to go up, you need to crawl into your bedroom and pull over the covers, or at a minimum put on your headphones,” says Smead. And no, he’s not investing in the “glam” stocks right now.

Read: The stock fund that guarantees almost all of your investment dollars

The market

The Dow DJIA, -0.87% , S&P 500 SPX, -1.11% and Nasdaq COMP, -1.07% are moving higher as trading kicks off.

The dollar DXY, +0.03% is down against the yen after the Bank of Japan cut its inflation outlook. Gold is steady, while crude US:CLU8 is moving higher.

Europe stocks SXXP, -0.66% are mixed as a bunch of earnings hit, and in Asia ADOW, +0.33% , stocks had a pretty mild day.

Read: Trader says he has ‘no money at risk,’ then loses nearly 2,000%

The chart

If you think it’s all downhill for China, after that global growth machine posted some gloomy figures this week, then check out our chart of the day, provided by Kevin Muir of the Macro Tourist. He believes betting against the Aussie dollar versus the Canadian dollar is the best way to place a bearish bet on China right now:

“You see, Canada is also a resource economy. And although Canada is dependent on China to some extent, the reality is that Canada is far more exposed to the United States,” says Muir, who adds that trying to use the dollar to bet against China doesn’t work because the U.S. currency has morphed into “a risk-on, risk-off instrument” for overall markets.

He thinks the China slowdown story has a few chapters to go. ““Whatever pain Canada experiences when it comes to China…Australia will feel it worse. At the end of the day I would rather be long the currency of the country whose major trading partner is the United States and short that country who relies on China,” says Muir.

The buzz

Procter & Gamble PG, -0.10% , United Tech US:UTX, Comcast CMCSA, -0.70% , Abbott Labs ABT, +0.18% and Kimberly Clark KMB, -0.44% have all rolled out results, F, -0.68% and Texas Instruments TXN, -1.23% are coming after the close.

Earnings preview:Don’t expect miracles from tech companies this earnings season

IBM IBM, -1.72% is rallying after the tech giant’s earnings and outlook blew away the Street.

Tesla TSLA, +4.42% hit by downgrade from RBC, which says growth expectations are too high, current share price isn’t justified.

On the trade front, POTUS is apparently ready to dig in his heels, and protest any new deal with China, unless the latter does more than buy more American goods. Speaking of China, while Apple has seen some woes from the slowdown, luxury-goods label Burberry says it’s own problems are more home grown.

Read:Wall Street worries about China slowdown complicate Trump’s get-tough trade strategy

Opinion: Government shutdown shows most Americans are unprepared for the next recession

Oracle ORCL, -0.71% accused of underpaying women and minorities to the tune of $400 million by U.S. regulators.

The Fed is reportedly probing Deutsche Bank’s DB, -1.62% DBK, -1.22% U.S. operations over suspect Danske Bank transactions.

Nintendo’s 7974, +1.22% Switch outsold every other system in the U.S. in 2018, and had the best December sales for any console since 2018.

The quote

Reuters

“In the Western countries, you’re experiencing tremendous domestic difficulties. And democracy, as you have described, is not working very well. And you need to realize that. You need political reforms in your countries. I say that with all sincerity.” — That was Fang Xinghai, vice chairman of China’s Securities Regulatory Commission, who reportedly drew some laughs at the World Economic Forum in Davos on Wednesday with that comment.

He also said everyone should stop panicking about China’s economy and that if growth remains at 6% this year, that’s “not very slow.”

Plus:U2’s Bono, TPG launch new company to measure ‘impact investments’

Random reads

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