Deflation Is Here
After last week’s Redbook same store sales growth report, many predicted that would be the bottom in sales growth. Mostly because growth was relatively low and because the economy is starting to reopen. So far, that prediction looks good. In the week of May 9th, yearly growth rose from -9.3% to -7.5%. Longer that bottom…
Fauci Denies The Market A Higher High
Higher High Denied The stock market experienced a ‘buy the rumor, sell the news’ trade once again. It sold off when the Democrats proposed a $3 trillion stimulus bill. Plus, the market feared Fauci’s statements on COVID-19. As the subheading says, the S&P 500 failed to hit a higher high for the first time in…
Uncertainty Leading To Higher Valuations
PE Multiple Broken? Investors focused on the S&P 500’s PE multiple have missed out on the recent gains. To be clear, investors focused on the PE based on 2020 earnings missed out the entire rally. Investors focused on the multiple of 2021 earnings have only missed the past couple weeks of gains which haven’t been…
Record Robinhood Positions (Retail Is Buying The Dip)
Robinhood Traders Are Everywhere Some say the popularity of the Reddit page Wallstreetbets was the signal retail investing was overheated. It’s always tough to say when a market is overheated because rallies can always keep going longer than you expected. That’s why I look at the fundamentals, the economy, and valuations to formulate my opinion. …
Details Of The Worst Labor Market Ever (April Data)
Job Cuts Are Everywhere Now we have the April job cuts report. It is exactly as you’d expect in that there were the most job cuts ever. The chart below shows there were 671,129 job cuts which is by far more than any month in the prior 3 recessions. As the graphic shows, this is…
Rally In Cloud Stocks Has Gotten Absurd
Suckers Do Well Bears are calling this a suckers rally. They have to do that because they predicted for years that when the party in stocks ended, there would be a long downturn in markets without a new high for years, or even decades if we followed Japanese markets. Rather than taking years, this bear…
Unemployment Claims Continue To Pile Up, Setting New Records
Jobless Claims Fall Again As expected, in the week of May 2nd, initial jobless claims fell again. This time they were down from 3.846 million to 3.169 million which was above estimates for 3.041 million. Prior week’s report was only revised higher by 7,000. Initial claims are now below their 4 week average as the…
Stocks Living On Cloud 9
Living In The Cloud Stock market had a rough day on Wednesday, but the cloud stocks did well again. This market is in the clouds. If you don’t own a big tech stock or a SAAS stock, your portfolio is likely underperforming. This situation reminds me of 2007 and 2008 when the agriculture and energy…
Worst Labor Market In American History
Q1 Earnings Update As predicted a few weeks ago, Q1 earnings season has been bad, guidance, has been nonexistent, and stocks haven’t sold off. Obviously, a few individual names have declined on weak earnings, but overall, the market has done fine. That’s because the large tech companies are outperforming and the companies hit the worst…
Best Rally In WTI Oil Ever
Another Rally: Georgia Reopens The stock market rallied again on Tuesday. It fell from the peak on the day, but it’s still very close to its bear market high. Specifically, the index was up 0.9%, but it fell 1.02% in the last hour of the session. The index is only down 2.42% from its bear…
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