Tech Underperforms, But It’s Still In A Bubble
Modest Thursday Selloff On Thursday morning, the futures market looked grim as the S&P 500 was down over 2%. Investors didn’t understand what catalyzed that decline, and didn’t think the Fed was hawkish at all like some said. Sure enough, the S&P 500 bounced back in the futures session and closed down 0.84% in the […]
Jobless Claims Fall Sharply
Very Good Jobless Claims Report The jobless claims report was very good which is a great sign because we’ve recently seen some weak data. Also, we need people to leave continuing claims before their benefits run out. Furthermore, this was the survey week for the BLS report. We haven’t seen a decline in COVID-19 cases […]
Snowflake Spikes, But The Nasdaq Falls
Snowflake IPO One of the biggest stories on Wednesday was the Snowflake IPO which spiked beyond the wildest imaginations. This IPO was like feeding meat to an alligator because of its industry, growth rate, net retention rate, and successful CEO. The stock peaked at $319 even though the IPO price was only $120. That’s nearly […]
Fed Says It Won’t Raise Rates Through 2023
No Rate Hike & Dovish Guidance As expected, the Fed didn’t raise rates on Wednesday. Furthermore, as you can see from the chart below, guidance calls for no rate hikes through 2023. Just 3 members see hikes in that year, but that doesn’t mean much. Technically, we could have a new chair by then, but […]
Extreme Mania Speculation In QQQ Calls
Another Big Factor Day There have been a few days where tech has underperformed in this recovery from the early September correction. Tuesday was different as the speculative tech stocks had a great day. Nasdaq was up 1.2%, while the S&P 500 was up 0.5%. Russell 2000 was only up 8 basis points. Most stocks […]
Disappointing Industrial Production and Manufacturing
Phase 2 Incoming With the latest RedBook retail sales report, we can now say the consumer is faltering as spending growth fell from -0.1% to -1.2% in the week of September 12th. An increasing number of states are giving out the $300 in weekly benefits which should be a positive. A max payout for the […]
Extreme Options Activity Could Cause A Tech Crash
Big Monday Rally Monday’s have almost always been positive this summer. This Monday didn’t disappoint as there was a major rally in the small caps especially. Russell 2000 was up 2.6%, while the Nasdaq and S&P 500 rose 1.87% and 1.27%. Prior to September, it was very rare for the Nasdaq to underperform small caps. […]
Fed Not Even Close To Guiding For Rate Hikes
Fed Meeting Coming Fed’s September meeting is on Wednesday. We all don’t expect the Fed to raise rates for the next year at least, so it’s obviously not going to do so this week. In fact, you can’t find anyone who thinks the Fed will raise rates at this meeting. The chart below shows Cornerstone […]
Factor Rotation Hasn’t Happened Yet
Growth Investors Aren’t Scared It’s safe to say this correction hasn’t gone the way value investors envisioned it would when they expected one in late August. Large cap growth firms have underperformed the market, but small cap value has still fallen. This has been a wide reaching correction. Tech stocks are no longer the flight […]
Economic Reopening Continues In Earnest
Economy Normalizes The economy normalizedquickly from lockdown to neutral from March to mid-June as shown in the chart below. Interestingly, the opening of the economy started slowing a week after the cyclical stocks peaked on June 8th. The stock market probably predicted this change by looking at the rate of change of new COVID-19 cases. […]