Economic Reopening Continues In Earnest
Economy Normalizes The economy normalizedquickly from lockdown to neutral from March to mid-June as shown in the chart below. Interestingly, the opening of the economy started slowing a week after the cyclical stocks peaked on June 8th. The stock market probably predicted this change by looking at the rate of change of new COVID-19 cases.…
Correction Still Not Over
Correction Not Over (But Tesla Rallies) Just because the stock market rebounded, doesn’t mean the correction is over. Sure enough, there was a selloff on Thursday with the S&P 500 falling 1.76%. Nasdaq fell 1.99% and the Russell 2000 fell 1.23%. Tech stocks underperformed, but not by as much as most thought they would. Apple…
Hurricane, Wildfires Increase Jobless Claims
Jobless Claims Rise There is a lot of nuance to the jobless claims report. If you just look at the seasonal adjusted headline data, you’ll miss important details. In the week of September 5th, seasonally adjusted initial claims stayed the same at 884,000 which was above estimates for 828,000. It’s really tough to predict where…
Druckenmiller Sees Stock Market Mania and Higher Inflation
Druckenmiller Predicts Higher Inflation It's true that the stock market could recover for a few days, but the intermediate term result will be lower. Don’t take your eyes off the prize, just because stocks recovered on Wednesday. To paraphrase Druckenmiller: he said a 10% decline in the stock market does nothing because it’s so far…
Fewer Rent Payments - But More Vacations
Same Store Sales Growth Falls Redbook same store sales growth in the week of September 5th fell sharply from 4.6% to -0.1%. Now we’re out of the back to school shopping season. It’s tough to glean much from one week of bad data after a string of good reports. Investors will be following the next few…
Fastest Correction Ever - Worst Day For Tesla Ever
Decline Not Over Some thought the correction would start on Tuesday because the pros tend to go on vacation before Labor Day. We did get a decline on Tuesday, but obviously the correction started last week. It’s amazing how people are saying the market has fallen too much, meaning the correction is over. Did they…
Small Business Confidence - Consumer Spending Increase
Spending Continues To Rebound Some economists believe that if we just wait a few more weeks, we will see a decline in consumer spending growth because of lowered jobless benefits. That’s the wrong approach. It's understandable that they want to highlight how bad the situation is for people who haven’t gotten their jobs back and…
Highest QQQ Notional Value Traded Ever
Wild Friday Some may have thought a good jobs report would slow the correction. That’s not how this market works. What’s good for the economy is bad for the tech stocks which means the indexes fall. 10 year bond yield rose 8.3 basis points. If it continues to rise next week, there should be further…
Unemployment Rate Shockingly Falls To 8.4 Percent
Great August Jobs Report Once again, the ADP report was too negative on job creation. In the past few months, it has been too negative, but at a lesser rate each time. At this pace, in the next few months it will re-couple with the BLS report. We won’t be discounting the ADP report next…
Tech Underperforms In Thursday’s Selloff
Stocks Finally Fall The stock market finally fell on Thursday as the momentum tech stocks were responsible for most of the losses. There was profit taking. Stocks that have done the best this summer fell, even the value/cyclical stocks. In the near term, most don’t expect the moderately overbought cyclicals to fall in line with…