COVID-19 Caused Stay At Home Stocks To Win Big

Update On The Consumer September labor report is this Friday. Consensus calls for 850,000 jobs added. Merrill Lynch is calling for 800,000 jobs added with the unemployment rate falling to 8.1%. We are testing how far the labor market can improve without the leisure and hospitality industry.  Sports are starting to let some fans in…

October Set To Be Volatile Because Of COVID-19 News

Tech Leads The Market Higher The stock market rallied sharply on Friday as big cap tech led it higher. A bubble in tech isn’t going to go away until interest rates rise and the COVID-19 crisis ends. It would help value stocks and potentially boost yields if a stimulus is passed. Personally, It's unlikely tha…

Record Low Inventory Of New Homes

Strong Core Capital Goods Orders August durable goods orders report had very tough comparisons, but still had positive monthly growth which is a plus. New orders were up 0.4% which followed 11.7% growth which was revised up by 0.5%. That missed the consensus of 1.5%.  Ex-transportation order growth was 0.4% as well which missed estimates…

Stimulus Back On The Table?

Wild Thursday Trading There were major moves on Thursday as the stock market tried to shake off its September correction. Trading action was wild. The stock market started down, rallied into the afternoon, and then fell before the close. From trough to peak, the S&P 500 rose 2%. It closed up 30 basis points. Momentum…

Weak Jobless Claims - Tidal Wave Of Exhaustion Coming

Jobless Claims Rise Slightly Headlines at the stock market’s open said stocks were falling on a bad jobless claims report. After the stock market rallied, they needed to change their headlines. Given the recent decline in stocks, it's doubtful that this weak reading was enough to cause a decline.  Then again, stocks can move for…

There Is No Fear Among Tech Investors

Correction Nearly Hit (Tesla Crashes) With the S&P 500 falling 2.37%, it nearly hit correction territory as it is down 9.6% since its peak. In the near term, the market is oversold, but there are still bubbles in the tech sector. There was significant weakness in tech on Wednesday as Apple fell 4.2%. It’s now…

Manufacturing Making A Comeback

Slight Decline In Markit PMI Flash Markit PMI fell slightly in September, but this was still a pretty good report. Diffusion indexes measure how business is doing versus the last period. With the economy recovering, the comparisons get tougher. This explains why many diffusion indexes were very high right after the recession ended.  Composite PMI…

Nasdaq 100 Already Up 5 Percent

Tech Leads The Market Higher On Tuesday Tech has recovered strongly from its Monday bottom. Fact that it is in a bubble has not impacted its returns yet. If this was a normal bull market, a greater than 10% correction would be enough for me to turn bullish. However, tech was in a bubble. If…

Consumer Looks Better Than Before

Slight Improvement In Chase Card Spending We got 2 new good data points on spending which suggest the consumer isn’t in disaster mode. Redbook same store sales growth increased from -1.2% to 1.5% in the week of September 19th. That’s a nice improvement, but on an absolute basis, it’s still very low growth. Ending the…

Black Monday For Small Cap Value

Small Cap Value Tanks The stock market fell again on Monday. It started as a broad based decline, but then morphed into a huge decline for small cap value and a very large reversal for large cap value. For much of this correction in September, small cap value has outperformed. It gave up all that…