Weekly Update

Uncategorized, Weekly Update

Market Reaches Technical Inflection Point


Published May 22, 2020

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The stock market has rallied hard off the March 23rd bottom, surprising almost everyone in the strength and lift of the move. This rally has brought the Nasdaq 100 (QQQ) back to positive on the year, a stunning development given the dire economic situation. That positive year-to-date print for the Nasdaq reflects the seeming fact that Covid-19 has served to accelerate trends which benefit these top companies of the digital economy – e.g. Amazon, Facebook, Google. That the Russell 2000 small-cap index remains down almost -20% year-to-date, while the equally-weighted version of the S&P 500 is down -16%, is perhaps a better stock market gauge of the overall economy’s troubles. (more…)

Uncategorized, Weekly Update

The New ‘Real’ Economy


Published May 15, 2020

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Many articles are being written trying to make sense of a stock market that has roared back from the depths while economic data continues to deliver abysmal news. Part of the explanation focuses on which parts of the stock market have actually rebounded most strongly. It has been the new digital economy stocks that have driven the rebound while the ‘old economy’ stocks have lagged. (more…)

Uncategorized, Weekly Update

Is the Recent Rally on Shaky Ground?


Published May 8, 2020

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The following recent commentary from Liz Ann Sonders at Charles Schwab highlights some of the issues associated with the recent rally. Here is Ms. Sonders’ analysis:

“The speed with which the U.S. stock market went from all-time highs to deep bear market territory broke all historical records. Then the rally that ensued was one of the fastest “new bull markets” ever in history; allowing the month of April to be the strongest since early-1987. Given the weaker start to the current month, expect to hear louder chants of “sell in May and go away.” (more…)

Uncategorized, Weekly Update

Are Stocks Too Far Ahead of the Economy?


Published April 24, 2020

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Below we find a good summary of the current market situation from Delta insights. They note that stocks are expensive relative to history, with earnings outlooks unusually foggy, and the market’s high concentration in only a very few companies further cause for concern. Here’s Delta’s summary with our notes at the end: (more…)

Uncategorized, Weekly Update

The Nasdaq Goes Its Own Way


Published April 17, 2020

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The stock market’s recovery from its March plunge has seen a few groups and stocks rise to the top. Many of those favored groups and stocks are heavyweight members of the Nasdaq 100 stock index, trading under the symbol QQQ. (more…)

Uncategorized, Weekly Update

The Fed gets bigger


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Published April 20, 2020

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Today’s front page of the Wall Street Journal carries the following stories: Jobless claims top an “unprecedented” 17 million, Fed unleashes its broadest ever array of programs, Coronavirus creates a “mountain of debt”, Saudis and Russia agree to oil production cut.  Those four topics encapsulate what markets have been wrestling with over the past month, and going forward.  We will undoubtedly spend more time in coming weeks on most of those.  This week, we are focused on the dramatically expanded role of the Federal Reserve.
(more…)

Uncategorized, Weekly Update

If History Is Our Guide, This Bear Market Is Just Getting Started


Published April 3, 2020

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There are many stories already in this bear market. Below, we present a few that might be of interest. First, we take a look at our focus index, the Nasdaq 100 (QQQ). The line across the middle notes the price point ($195) where this index broke out back in November to begin a four month rally. That breakout ran fast and hard. We now trade below that breakout point. In fact, it served as a point of resistance (aka net selling) to halt the most recent rebound effort. (more…)

Uncategorized, Weekly Update

Bear Market Perspectives


Published March 27, 2020

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This week, as we hunker down and ‘shelter-in-place’, we offer an assortment of bear market observations. First, we will start with noted market observer Josh Brown’s views on whether the stock market has seen its worst days yet. That is followed by Dan Sullivan’s more historical view on bear markets. We remind readers that Wall Street is in New York City, which has been on the front lines of the virus in the USA over the past few days and weeks. It’s no surprise, then, that the investment community in NYC will feel more besieged by the virus news than some other parts of the country. Keep that context in mind as you read. (more…)