Rate of Change Improvements In All Aspects Of The Economy
Economic Anxiety Scars of the COVID-19 shutdown won’t heal easily. These are economic and social. That’s a toxic combination. This situation is directly the opposite of the recent stock market performance. The stock market is acting as if COVID-19 is a done deal and any of its consequences will be gone in a few months. […]
Are New Stock Market Highs Inevitable?
3rd Best Bear Market Rally Ever As you can see from the chart below, this has been the 3rd largest bear market rally ever. Of course, you can argue this, among others, is the start of a bull market. However, we don’t know for sure if this is a new bull market and we didn’t know if […]
Q2 EPS Expected To fall 43.9%
Multiples Are High Recently, forward EPS estimates seemled like they might be bottoming which is a positive. This was in the discussion on how PE multiples rose about 60% since the bottom just like they did in the few months after the March 2009 bottom. If earnings rise, they can help stocks further this run. […]
Retail Trading Activity Is Exploding
Did The Weekend Matter? It was wrong to say there would be a sharp decline coming on Friday as the market was up slightly and the small caps outperformed again. It was the day before Memorial Day weekend. Investors didn’t think as many people would go on vacation as normal because the economy is still […]
Ugly Jobless Claims
Permanent Isn’t Actually Forever Some people are discussing permanent job loss. That’s mostly ridiculous. There won’t be a permanent increase in the unemployment rate. Permanent means forever. That’s wrong. This unemployment rate will fall back near where it troughed at in early 2020. People are misusing the term as they seem to be suggesting a […]
Minimal Decline On Thursday – Cloud Is Still In A Bubble
Down But Not Really The stock market fell on Thursday, but it didn’t feel as bad as the S&P 500’s 0.78% decline indicates. Russell 2000 was actually up 5 basis points. Considering how overbought the market was on Wednesday, you can say this was a light decline. You can also say that means a deeper […]
Sector Performance In Bear Market – Financials The Big Loser
Bear Market Sector Performance (Energy) The chart below shows the performance of each sector in the bear market, since the peak in February, and since the bottom in March. Most notable performance is energy which fell 56% from peak to trough and rose 63.1% since the bottom. That still puts its returns since the top […]
Stock Market Is Overheated
Another Big Rally The stock market is starting to look overheated as it reversed Tuesday’s selloff on Wednesday, closing at a new bear market high. Stocks are due for a correction. CNN fear and greed index rose 5 points to 53. Neutral is the new extreme greed with the economy still in flux. There’s no reason […]
Fund Managers Are Positioned All Wrong
Fund Managers Love Tech & Healthcare Bank of America fund manager survey tells us what we already knew. Fund managers love healthcare and tech stocks. As you can see from the chart below, the z score for healthcare is about 2.5 standard deviations above normal. That makes sense because biotech stocks are working on cures […]
Wild Trading Action – S&P 500 Trading Like A Biotech Stock
Up & Down Action The stock market is back to trading like a micro-cap biotech stock as it exploded on positive early news on Moderna’s vaccine and then sold off the next day. It seems to be a trend. Whenever good news about a drug such as remdesivir comes out, the stock market explodes and […]