Is The Consumer In Trouble?
Consumer Running On Empty? Morgan Stanley came out with a new note that makes the point that the consumer is running out of savings to keep up its current spending. The consumer is about to be running on empty according to the chart below. As you can see, the personal savings rate has been dropping…
Partial Selloff In Tech, S&P 500 Nears Correction Territory
Another Selloff The stock market declined again on Friday as it fell through the technically important 50 day moving average. As you can see from the chart below, the streak of trading days above the 50 day moving average ended at 103. This was one of the highest streaks in the past 13 years. Obviously,…
Spending Only Down Because Of Labor Day Holiday
Consumer Spending Rolling Over? Some think the consumer is doing fine. Only the data points that don’t adjust for the Labor Day holiday show recent weakness. Seasonal adjustments need to be made or you will be caught missing the obvious. We’re just trying to note the trends, not focus on small moves each week. As…
Tech Underperforms, But It’s Still In A Bubble
Modest Thursday Selloff On Thursday morning, the futures market looked grim as the S&P 500 was down over 2%. Investors didn’t understand what catalyzed that decline, and didn’t think the Fed was hawkish at all like some said. Sure enough, the S&P 500 bounced back in the futures session and closed down 0.84% in the…
Jobless Claims Fall Sharply
Very Good Jobless Claims Report The jobless claims report was very good which is a great sign because we’ve recently seen some weak data. Also, we need people to leave continuing claims before their benefits run out. Furthermore, this was the survey week for the BLS report. We haven’t seen a decline in COVID-19 cases…
Snowflake Spikes, But The Nasdaq Falls
Snowflake IPO One of the biggest stories on Wednesday was the Snowflake IPO which spiked beyond the wildest imaginations. This IPO was like feeding meat to an alligator because of its industry, growth rate, net retention rate, and successful CEO. The stock peaked at $319 even though the IPO price was only $120. That’s nearly…
Fed Says It Won’t Raise Rates Through 2023
No Rate Hike & Dovish Guidance As expected, the Fed didn’t raise rates on Wednesday. Furthermore, as you can see from the chart below, guidance calls for no rate hikes through 2023. Just 3 members see hikes in that year, but that doesn’t mean much. Technically, we could have a new chair by then, but…
Extreme Mania Speculation In QQQ Calls
Another Big Factor Day There have been a few days where tech has underperformed in this recovery from the early September correction. Tuesday was different as the speculative tech stocks had a great day. Nasdaq was up 1.2%, while the S&P 500 was up 0.5%. Russell 2000 was only up 8 basis points. Most stocks…
Disappointing Industrial Production and Manufacturing
Phase 2 Incoming With the latest RedBook retail sales report, we can now say the consumer is faltering as spending growth fell from -0.1% to -1.2% in the week of September 12th. An increasing number of states are giving out the $300 in weekly benefits which should be a positive. A max payout for the…
Extreme Options Activity Could Cause A Tech Crash
Big Monday Rally Monday’s have almost always been positive this summer. This Monday didn’t disappoint as there was a major rally in the small caps especially. Russell 2000 was up 2.6%, while the Nasdaq and S&P 500 rose 1.87% and 1.27%. Prior to September, it was very rare for the Nasdaq to underperform small caps. …