IMF Lowers Growth Estimates (Most Obvious Call Ever)
Spending Finally Falls Many have been predicting that Redbook retail sales growth would fall in the next few weeks as people are done excessively grocery shopping. People need to actually eat and use what they bought at the grocery store when they hoarded goods in mid-March. Plus, people now know how much they need to…
Stocks Don’t Give Back Much Of Last Week’s Gains
Modest Monday Decline Days of the market crashing on Monday are over as stocks fell 1.01% on Monday April 13th. Frankly, I think the days of crashes in general are over. A modest decline after the best week since 1974 is quite impressive. We all went into the week expecting a mixture of down and…
Bulls Like High Unemployment
Investors Love High Unemployment When the economy is doing well and the unemployment rate is high, it’s bad for stock returns. It is like an hour glass that’s running out of sand. You can debate whether that analogy holds true for this cycle because low unemployment didn’t create inflation and cause the Fed to hike…
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%…