Stocks Fall Slightly Amidst Extremely Positive Sentiment & Geopolitical Issues
Stocks Finally Decline There was some volatility on Wednesday morning, but the market ended up higher which put it on a 3 day winning streak. That was a 7.66% gain since May 13th. Stocks were very overbought. You could tell sentiment was overheated because there were people saying you should be permanently bullish on stocks…
Consumer Spending Growth Increases As States Reopen
Spending Growth Is Improving Consumer spending growth is in a steady uptrend. That’s not surprising because the fear in late March and early April was unsustainable. There is a sense of a return to normalcy as the economy reopens. Plus, most people who applied for unemployment benefits have gotten them. Finally, the stock market has…
Stocks Due For A Correction As Retail Traders Become Excited
Not Extremely Overbought, But Due For A Correction The stock market is overbought. It’s not at an extreme level because the AAII sentiment and the NAAIM exposure indexes aren’t showing signs of froth. Plus, the Bank of America fund manager survey showed managers were hoarding cash. To be clear, that survey was from a couple…
Rate of Change Improvements In All Aspects Of The Economy
Economic Anxiety Scars of the COVID-19 shutdown won’t heal easily. These are economic and social. That’s a toxic combination. This situation is directly the opposite of the recent stock market performance. The stock market is acting as if COVID-19 is a done deal and any of its consequences will be gone in a few months. …
Are New Stock Market Highs Inevitable?
3rd Best Bear Market Rally Ever As you can see from the chart below, this has been the 3rd largest bear market rally ever. Of course, you can argue this, among others, is the start of a bull market. However, we don’t know for sure if this is a new bull market and we didn’t know if…
Q2 EPS Expected To fall 43.9%
Multiples Are High Recently, forward EPS estimates seemled like they might be bottoming which is a positive. This was in the discussion on how PE multiples rose about 60% since the bottom just like they did in the few months after the March 2009 bottom. If earnings rise, they can help stocks further this run.…
Retail Trading Activity Is Exploding
Did The Weekend Matter? It was wrong to say there would be a sharp decline coming on Friday as the market was up slightly and the small caps outperformed again. It was the day before Memorial Day weekend. Investors didn’t think as many people would go on vacation as normal because the economy is still…
Ugly Jobless Claims
Permanent Isn’t Actually Forever Some people are discussing permanent job loss. That’s mostly ridiculous. There won’t be a permanent increase in the unemployment rate. Permanent means forever. That’s wrong. This unemployment rate will fall back near where it troughed at in early 2020. People are misusing the term as they seem to be suggesting a…
Minimal Decline On Thursday - Cloud Is Still In A Bubble
Down But Not Really The stock market fell on Thursday, but it didn’t feel as bad as the S&P 500’s 0.78% decline indicates. Russell 2000 was actually up 5 basis points. Considering how overbought the market was on Wednesday, you can say this was a light decline. You can also say that means a deeper…
Sector Performance In Bear Market - Financials The Big Loser
Bear Market Sector Performance (Energy) The chart below shows the performance of each sector in the bear market, since the peak in February, and since the bottom in March. Most notable performance is energy which fell 56% from peak to trough and rose 63.1% since the bottom. That still puts its returns since the top…