Financial News vs. Noise
The downturn on Thursday was almost completely retraced on Friday.
Bearish Trades Crater Fast in Wall Street’s High-Momentum Rally-Bloomberg
Sky-high valuations, a foot-dragging Federal Reserve and an equally intractable political backdrop all put prudence at a premium. Yet practically every bearish impulse has proven costly as Corporate America’s earnings engine powers ahead. Animal spirits are raging in crypto and returning in select emerging markets, while riskier corporate bonds continue to best their higher-quality counterparts.
SPY had an undercut and rally at the 10 day moving average…
The Dow stocks are still laggards…
Rates came down a bit, but still look to be in an uptrend..
Quiet week in terms of data until PCE on Friday.
Interesting note this weekend from Johnathan Krinsky…
The top 10 names in the S&P 500 now make up 35% of the index, a new record high. We call this the breadth paradox because the bigger of a weight these names become in the index, the less breadth matters, assuming these names continue to move higher. In 2021, breadth peaked in April. Yet the SPX didn’t peak until the very end of December, coincident with the Top 10 names peaking. Last Thursday's negative outside day certainly felt bearish, but we find it's not as clear-cut of a sell signal as many think. That said, it should at least be another yellow light to bulls. Our bigger issue, and again this is likely not an imminent negative for the SPX given the market structure, is the widespread weakness across many consumer touch points. Boats & RVs, Transports, Auto-Part Suppliers, Restaurants, Casinos, as well as more recently Hotels and Homebuilders have all shown significant relative, and recently absolute weakness.
If you are looking for uptrends there is not a lot there. Semis are strong…
Same with Solars…
Not much of anything else.
Among our main themes. Argentine stocks had a tough couple of days last week.
Law and order stocks have looked ok, except AXON, which did seem to find support at $280
Gold miners look like they need a break…
Same with China…
HOOD and COIN both look strong and we are going to take profits on those today.
The most interesting name on our buy watchlist today is AMZN, which has been the weakest of the Mag 7 lately.
Looking at the transports, and specifically CSX, for a possible bounce off the 200 day
Same thing on oils, and COP..
or OXY…
In the beaten down consumer names I am watching ABNB….
Outside of AI I think that the weight loss drug eco system and digital biology are the areas you want to be looking at. Thanks to Larry Connors for putting me onto this and pointing out first order, second order, and third order opportunities. How digital health companies are capitalizing on the GLP-1 boom-CNBC.com. WW is interesting, they got crushed by the weight loss drugs, could be an opportunity here as they look to have found support at 1.50…
Speaking of AI. AI Is Driving ‘the Next Industrial Revolution.’ Wall Street Is Cashing In. Old-school stocks in the utilities, energy and materials sectors are outpacing the wider market-WSJ
Wall Street is taking notice. The utilities sector of the S&P 500 has returned 15% over the past three months, topping all other corners of the index. Energy and materials stocks have outperformed the broader market, which has advanced 4.2% over that period. Share prices are surging for industrial firms that stand to benefit from data-center expansion and renovation.
Yep. Not just your cash, but your bonds also. Don’t think you get paid enough to take duration and credit risk. Treasury Bills Are the Best Place to Park Your Cash. Just Ask Warren Buffett.-Barron’s
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