Earnings season is now in full force and 55 companies have already reported their third quarter results (11% of the S&P 500). Of these, 85% beat their estimates – and by a median of 9%. We have another 76 companies reporting this week. We reiterated again last week that it is largely earnings that drive stock prices, and indirectly the relative attractiveness of other asset classes in the never-ending search… Read the full article.
Equity indices remain weak and volatile. Bond yields have continued to climb on the back of a perceived worldwide energy shortage. Typically, we see bond yields fall when stock prices drop (bond yields and prices move in the opposite direction). This is due in part to a flight to safety but, more importantly, as a result of forecast economic weakness and… Read the full article.
Two weeks ago, we pointed out that a long-overdue market correction had likely begun. Despite a snap back in prices that took place during the third week in September and some healthy rotation into cyclicals, the broad market cap-weighted indices have reversed to new lows. The S&P 500 (SPY) dropped 5% in September, for its worst month since March 2020. October hasn’t been much better, as the… Read the full article.
A few weeks ago, I mentioned that we were watching for a break above 140 bps (1.4%) on the ten-year treasury bond, coupled with a positive stock market close. We got just what we were looking for last week and the breakout held for an important technical “weekly close.” To me this is strong evidence of renewed belief in… Read the full article.
Well, the much anticipated market correction appears to be underway. We have recently touched on the numerous factors coming together at once as a catalyst for an inevitable pullback. The one which we did not see coming is the potential collapse of a really huge Chinese real estate company named Evergrande. It seems to be grand all right. Mainly in how much debt it has. Three-hundred billion… Read the full article.
The past week has seen the broad US equity markets drift lower. The S&P 500 dropped just under 2% over the course of four consecutive trading days. Today we saw some buyers step in and we finished in the black, albeit by a nose. September is traditionally weak and there are plenty of reasons for that trend to continue… Read the full article.
I hope this week’s commentary finds everyone safe and rested, following some time off spent with family and friends. Summer is over and it is time to get back after it. We should see an uptick in market volume as traders and institutional desks come back online. We may also see some renewed focus on the fundamentals underpinning our economy…. Read the full article.
“August, die she must.” That line from Simon and Garfunkel’s song “April Come She Will” has always ripped my heart out. I love summer like nobody else and physically feel the pain of it ending every time. But this year I’m just ambivalent. Is there even summer anymore? One of my partners at Cabana, Michelle Alsobrook, shares an… Read the full article.
As many of you know, I have preached for years the importance of having a rules-based system when it comes to investing. It can be simple or complicated, but EVERY successful investor I have ever known has had a system. Warren Buffet has a system. William O’Neil has a system. The quant traders at Goldman… Read the full article.
The major US equity market indices have remained resilient in the face of significant adversity, which is a huge understatement. Despite the reemergence of COVID, masks and all-time highs in hospitalizations, buyers continue to step in on each dip. We received an absolutely horrible consumer confidence number on Friday, one of the biggest month-over-month drops in history and the lowest reading… Read the full article.
For those of you who have seen Groundhog Day (one of my all-time favorite movies), you know what I mean when I say it feels like we are all living the same thing over and over again. Four months ago, I wrote of seeing us all put COVID and the unbelievably difficult year of 2020 behind us. I discussed the… Read the full article.
Equity markets continue to struggle to reach higher ground despite strong earnings. Over the last several weeks we have discussed the relative weakness in many stocks, yet, impressively, stocks have not yet seen a sustained drop. Bond yields are signaling weakness going forward and a preference for safe yield over continued growth. I continue to believe we… Read the full article.
Last week we touched on the fact that market internals have been deteriorating over the past six weeks. Eventually, broad-based relative weakness in small caps, mid caps and other sectors of the S&P 500 pulled the large market cap-weighted indices (SPY, DIA, QQQ) down nearly 4% over the span of four days. This concluded with… Read the full article.
We have been watching the broad U.S. stock market’s internal technical condition over the past few weeks and have pointed out the divergence between market cap-weighted indices (that investors often reference) and everything else. Simply put, U.S. equities have been flashing warning signs for the past month. Leadership is confined to a few sectors and… Read the full article.
Major U.S. stock indices kicked off the week in positive territory and are at all-time highs. While these are at the forefront of what most people view as the “stock market,” they are market cap-weighted indices and only reflect the performance of a small sample of large companies. It is because of this that I… Read the full article.
I hope everyone had a great holiday weekend and is enjoying the short week. I love the 4th of July for several reasons, but at the top of my list is that I always get to be with all my kids at once – under one roof and on one boat! I say this all… Read the full article.
A realistic and stated inflation outlook provided by the Federal Reserve, paired with signs of bipartisan cooperation in reaching an infrastructure package, has stabilized equity markets after the sell off we saw just over a week ago. We are again at all-time highs and the volatility index (VIX) has fallen back below 20 at lows… Read the full article.
This past week we have seen U.S. equity markets edge up to new highs. The stock market’s performance has continued to impress us since March. In our view, this performance can be attributed to continued positive earnings, upbeat expectations for growth over the next 18 months and a pullback in interest rates following the historic… Read the full article.
I hope everyone’s week is off to a great start. With our CEO Chadd Mason on vacation this week, we wanted to provide a brief mid-week update on the markets and economy. The first three trading days of this week show the S&P 500 once again facing strong resistance at its all-time high. Additionally, the… Read the full article.
I’ll start by apologizing for the tardy commentary as a result of the holiday week. I hope everyone had a nice short week after a happy Memorial Day weekend spent with friends and family. I also hope some time was spent reflecting and honoring those who have made the ultimate sacrifice so that we can… Read the full article.
