Best Stock Market Recovery Ever

Year Ends With Record High The stock market ended 2020 at a record high as the S&P 500 rose 64 basis points. Tesla was up 1.57% to a new record. This was the stock of the year. It now has a $669 billion market cap. Investors highly doubt it will have a great 2021. It…

Stocks Set For Multiple Contraction In 2021

Earnings & Stock Price Mismatch EPS growth and stock prices don’t always match if you’re looking at data by year. As you can see from the table below, in 3 out of the 7 years EPS fell, stocks were up. In 5 of 9 times the stock market fell, EPS growth was positive. We will…

Can Tesla Catch Facebook?

Small Caps Rebound This is low volume trading at the end of the year which doesn’t mean much. Obviously, if you are taking profits and buying stocks, the prices are real, but we shouldn’t use this action to make conclusions about how January will go. As you can see from the chart below, the MSCI…

Energy Could Dominate 2021

Q4 GDP Growth Estimates The Chief Economist at RSM, Joseph Brusuelas, raised his Q4 GDP growth estimate from 2.7% to 4.8% on Wednesday because of November’s trade and inventory data. Remember, even though the quarter is over, only about 2/3rds of the data is out, so we have a lot of room to go until we…

Almost A Correction In Small Cap Growth

Are We In A Correction? It sounds silly to ask if we are in a correction because the S&P 500 is 22 basis points off its record high with its decline on Tuesday. However, it's not asking if we are in a correction in large caps. It's asking if we are in a correction in…

High Frequency Economic Data Tanks

Same Store Sales Growth Jumps Redbook same store sales growth is indicating there was an upturn in spending in the 2nd half of December which is interesting because most indicators have been weak. You’d think there was more weakness in the end of December because the virus spread as the month progressed. The vaccines have only…

Monster FANG Rally To End The Year

Another Santa Rally The stock market usually does well in the week between Christmas and New Years Day. The fact that we got a stimulus during this week made the rally even stronger (S&P 500 was up 87 basis points). Plus, many investors probably don’t want to sell because they would rather pay taxes next…

President Trump Signs The Stimulus. Will There Be More?

Traveling Growth Increased We have two trends starting. They are the vaccine going out to more people and an increase in mobility. The increase in mobility will definitely feed off the increase in vaccine distribution because people will feel safer. It’s a good sign people are willing to go back to normal, but it could…

Risky Stocks Go Parabolic

A Year For Retail Investors This was an interesting year because typically individual investors have very poor returns, but in 2020 their favorites trounced the index. Retail investors barely make money on average. The concept of even matching the market is foreign to them. Few usually beat the S&P 500 which is similar to the…

New Record High In Wages and Salaries

Income & Consumption Fall The November PCE report came out a couple days early because of Christmas. It’s in line with the other data we’ve gotten which shows November wasn’t a great month for consumer spending. As you can see from the chart below, real personal incomes excluding benefits from the government are back below…

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