Faster Stock Market Recovery Than 1987
Explosive Recovery Continues With the modest rally in big cap stocks, this became the best week for the S&P 500 since 1974. S&P 500 was up 12.1% this week. We can only imagine the records that would have been hit if this week had 5 days in it. On the other hand, we might have […]
Fed Is Now Buying Junk Bonds
Fed Fires Huge Bazooka Just when it seemed like the situation was calming down as the number of new COVID-19 cases in America seems to be peaking and the number of new hospitalizations in NYC is dropping precipitously, the Fed went overboard and announced it would start buying junk bonds. This is somewhat surprising in […]
Incredible 10.5% Gain In 3 Days
Investors Are Less Bullish Over the past few days, many investors have gone from extremely bullish to modestly bullish. That’s because while the market leads the fundamentals, you can’t have a record high market with the shutdowns still in place. Maybe we will see the market get closer to a record high on the announcement […]
Over 1 Million Retail Workers On Furlough
Consumer Confidence Reversed Sharply Generally speaking, we usually see recessions after consumer confidence is high. A problem with shorting on that basis is consumer confidence can be high for a few years. Most wouldn’t recommend shorting when consumer confidence is high. There needs to be a negative catalyst. This economic shutdown caused by COVID-19 was […]
Biggest Reversal Since October 17th, 2008
Big Time Reversal If you thought the extreme action in markets was over like I did, you were wrong. Technically, the market barely moved on Tuesday, but the decline in stocks from the opening pop was epic. It was the biggest gain surrendered since October 17th, 2008. This decline was different from October 2008. S&P […]
Largest Drop In Small Business Confidence Ever (Still Too High)
Same Store Sales Growth Falls Again A decline in same store sales growth in the Redbook report should continue because the initial burst in grocery shopping is over. Some people aren’t getting access to their unemployment insurance which will hurt spending. Rich and upper middle class are pulling back hard on discretionary spending. Specifically, in […]
22nd Best Day In 124 Years For The Dow
Massive Monday Rally The stock market exploded to the upside on Monday as many of the riskiest stocks in the market rose over 20%. You can say these stocks aren’t as risky as they appear because of cheap valuations, but they are cyclical stocks directly impacted by COVID-19. Examples include MGM Resorts which rose 22% […]
The Worst Has Been Priced In
This Cycle Has Been Speedy This cycle was put on hyper-speed. We had a bear market in a few weeks and a rally big enough to be considered a bull market in a week. Personally, I think the correct way to measure bull markets is for them to start after the previous peak is surpassed. […]
Small Caps Fall 7.05% This Week
Small Decline This Week As Markets Cool Admittedly, any calls for calm came too early in this bear market. But this week the projection was finally correct as there weren’t as many wild swings. It’s interesting that even though the S&P 500 fell 2.08% this week, which isn’t that much. Especially considering the prior week’s […]
Weak March PMIs & Jobs Report
Markit PMI Was A Disaster If the stock market wasn’t down much, there was no virus, and the Markit services PMI was this weak, we’d say sell stocks and brace for a recession. Services PMI fell from 49.4 to 39.8 which beat estimates for 39.1. Obviously, we are in an unusual time in which the […]