Economy Is Coming Back
Break Up Big Tech? Everyone is all in on the big tech stocks. Companies that make up FAANMG which are Facebook, Apple, Amazon, Netflix, Microsoft, and Alphabet, were 23.4% of the S&P 500 as of May 14th. It’s very difficult to not like these businesses unless you are worried about regulatory issues. By far, the […]
Record High Optimism From Small Traders
Smart Versus Dumb Money If you’ve been trading for a significant period, you may have noticed that short theses sound smarter than long ones. Long investors tend to believe management teams, while short sellers do investigative work. Shorts come up with reasons why management is wrong, which makes their argument look smarter. However, that doesn’t […]
Consumer Sentiment Inches Higher
Investors Are Negative Investors are a lot more negative than the S&P 500 makes it look. Dynamics under the hood of the market are all towards one direction. That is buying the stocks of the companies that do well in this new environment and selling the one that underperform. I t’s a negative viewpoint because […]
Biggest Risks Facing This Rally
Stocks End On A Positive Note Stocks had a rough couple days this week, but ended on a positive note. S&P 500 was up 0.39% on Friday closing the week down 2.26%. It’s down 11.36% year to date and up 0.45% in the past year. It’s up 0.62% since April 14th. While it looks like […]
Small Businesses Are In Big Trouble
Retail Trading Explosion Let’s discuss the spike in retail trading activity. It is one of the hottest topics on Wall Street/financial Twitter and because I have a variant opinion. As you can see from the chart below, the combined E-Trade and TD Ameritrade DARTs, which is daily average revenue traders, has gone vertical. A great […]
America Is 45% More Expensive Than The World
Cisco Beats Earnings Estimates Earnings season is winding down, but there are still a few more reports left. Next week the retailers such as Wal-Mart report results. It will be a story of the ‘haves’ and the ‘have nots.’ Most retailers will be in terrible shape, but the retailers that sell necessities probably did very […]
Billionaires Are Very Bearish – Druckenmiller & Tepper
Range Bound Market (Cloud Falls) The stock market fell again on Wednesday as it continued its correction from its euphoric level last week. With the 1.75% decline, it’s down 3.76% in the past 2 days. Perma bears won’t buy the dips presented to them. They didn’t take advantage of the March decline and haven’t taken […]
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 […]