First Small Cap Record Since August 2018 - COVID-19 Ignored
Rally Brings Record Highs The stock market is on fire as the euphoria knows no bounds. This time, stocks are mostly being led by cyclical small value stocks, but growth names have done ok too. Some investors are growing increasingly bearish on the market as there is no reason the big tech stocks should be…
Consumer Weakens Slightly: COVID-19 To Ruin Holiday Spending?
Vaccine Predicted To Stop COVID-19 We are all waiting to see if the economy rolls over or if it continues on its path towards improvement, albeit at a slower pace than earlier in the recovery. Most of the current data shows the economy still on solid footing in November, but things could go awry as…
Stock Market Continues To Ignore COVID-19 - Nio Rises AGAIN
Small Decline On Thursday The stock market was experiencing euphoria on Wednesday. This pandemic that is ravaging the country has been ignored. That wouldn’t necessarily say the 1% decline in the S&P 500 on Thursday signaled the market is now taking it seriously. It’s easy for the headlines to claim that’s why stocks fell, but…
Lower Inflation and Better Labor Market
October CPI Mildly Disappoints CPI report had a lot of bang for its buck on Thursday. Yields were already headed lower because the long bond was oversold and because COVID-19 shutdowns are increasing. Adding a disappointing CPI piled onto the trade. October CPI showed less inflation which is the opposite of what the ISM and…
Stock Market Hits Euphoria
Less Than 1% From Record High The stock market is in an extremely euphoric state that doesn’t match the COVID-19 crisis which is set to be very deadly in December. There is high resistance at the current S&P 500 level combined with headlines of incoming shutdowns. Most don’t think there will be a 20% decline…
Jobs Postings Improve In Spite Of COVID-19 Looming
Job Postings Keep Improving In the week of November 6th, job postings were down 13% year over year as you can see from the chart below. Recovery hasn’t stopped despite COVID-19 hospitalizations passing the summer high. Interestingly, we’re starting to see news outlets call this the 2nd wave. If deaths materially get above the summer peak,…
Reopening Trade Continues
Trend Continues Tuesday was a continuation of Monday for the stock market as the stocks that benefit from a reopening of the economy rallied and the secular growth stocks fell. It is being called the ‘great rotation’. Some traders think it is overhyped. However, they are missing the situation at hand. The market will look…
Market Is Focused On 2021 Recovery
Redbook Same Store Sales Growth Falls The economy is faced with higher COVID-19 cases and no stimulus. Good news is the labor market is improving. Question is how much it can improve in the face of rising cases, hospitalizations, potential shutdowns, and changes to behavior. This economy dealt with the spike in cases in the…
Vaccine Causes Massive Sector Rotation
Vaccine Causes A Frenzy Monday was the craziest factor day of the year. It was one of the craziest factor days ever on multiple fronts. Even though the action was shocking, it’s what you’d expect given the news. Prior to Monday, the COVID-19 situation looked grim. Currently, there are 59,275 people in the hospital because…
No Double Dip Recession?
Job Cuts Fall There were many media reports about new job cuts in October. Thesis was that we are entering into another wave of weakness like the spring. In hindsight, it’s not surprising the economy didn’t enter into a sharp slowdown because it didn’t in July when COVID-19 was worse. To be clear, COVID-19 is…