We Are In A Stable Stock Market
Mini Correction Is Here Some investors predicted the correction we are experiencing just a couple days too early. It was clear a correction was coming because the number of new COVID-19 cases is plateauing instead of falling like in other countries. Plus, it was a buy the hope of states reopening and sell the news […]
Buybacks & Dividends Cut – Stocks Aren’t A Great Bet
Earnings Estimates Are Now Realistic 2020 EPS estimates have fallen so much that they are now realistic. Bad news is based on 2020 estimates, the stock market is expensive. Specifically, the 2020 EPS estimate fell from $178.96 at the start of the year to $132.75. That means the current S&P 500 PE ratio is 21.94. […]
Active Investors Chased The Market Higher
Investors Got Too Positive On Wednesday It’s pretty obvious investors were euphoric on Wednesday to any observers of the market. Even if you are bullish like me, you know the market got ahead of itself. Nasdaq was almost positive year to date. Now it’s time for a pullback. We started the decline on Thursday with […]
Unemployment Rate Might Be 23.8%
Jobless Claims Fall Again Some traders decided that the stock market always rallies on Thursday because it seems like the stock market likes high jobless claims in the near term. They believed that because stocks would have been on a long Thursday winning streak if it wasn’t for the Gilead news last Thursday. As you […]
Stocks Explode to New Bear Market Heights
Huge Rally To New Bear Market Highs It’s tough to quantify what we are seeing in markets. It’s a mixture of extreme euphoria and extreme pessimism. That makes no sense, but we are in unprecedented times. To further explain, almost everyone thinks the stock market is expensive, yet the action has been remarkably bullish. Many […]
GDP Sinks & Fed Stays Dovish
Q1 GDP Growth Was Bad & Q2 Will Be Worse Q1 GDP report showed -4.8% growth which missed estimates for -3.7%. 2.25% of the decline actually came from healthcare because elective surgeries were delayed. This is the worst growth since the last recession as the chart below shows. The chart also includes Oxford Economics’ Q2 […]
Optimism About A Potential Reopening Of The Economy Can’t Be Contained
Stealth Rally In Stocks The stock market is forward looking. It has been rallying on the decline in new COVID-19 cases, stimulus, and the expected end to the shutdowns. This index has been helped in the past few weeks by the fact that the companies the least hurt/helped by this shutdown are huge components. We […]
Any Guidance Is Good Guidance
Weak Earnings Guidance In a shock to no one on the planet, Q1 earnings season has been weak and guidance has been mostly non-existent. The situation is so unusually negative that when a company reports earnings and gives disappointing guidance, it’s a positive because at least there was guidance. We saw that play out with […]
Huge Spike In Small & Micro Cap Stocks
Huge Rally In Small Caps Even though the stock market has rallied in the past few weeks, there hasn’t been pure optimism about COVID-19 getting better until Monday. That’s because the work from home stocks such as Amazon and Microsoft along with the bubble stocks like Zoom and Shopify have been leading the charge. These […]
World Won’t Be Much Different After COVID-19
Low Income Workers Usually Get Hurt A non-consensus viewpoint is in this cycle the lowest paid workers will get hit less badly than they usually do in relation to the rest of the labor market. As you can see from the chart below, the bottom 50% of workers by net worth had the biggest decline […]