COVID-19 Resurgence Reverses Economic Recovery
Economy Is Slowing This economy is slowing because of the increase in COVID-19 cases. And the stock market is ignoring this unless you think the 7% correction priced this in. A problem with that logic is over half of that correction has been rescinded even though we have no evidence the slowdown is over. We…
Window Dressing Causes Winners To Spike Further
Amazing Q2 S&P 500 increased 19.94% in Q2 which was the best Q2 since 1938. The market was 6 basis points away from having the first down 20% quarter followed by an up 20% quarter since 1932. We are in rarified territory even though this mark was barely missed. This was the S&P 500’s biggest…
Real Time Economic Data Stops Improving
Redbook Sales Growth Improves Again My theory is growth is slowing in the areas most impacted by COVID-19. This includes many states in the south and the west. With the northeast and the Midwest improving, it’s interesting to see what that does to national data. Redbook same store sales growth in the week of June…
Very Usual AAII Sentiment Reading
Big Small Cap Rally The stock market had a solid Monday rally after selling off on Friday. Huge winners were the small caps. Specifically, the S&P 500 rose 1.47%, the Nasdaq rose 1.2%, and the Russell 2000 rose 3.08%. Tech stocks underperformed which is extremely rare for this market since the March bottom. CLOU cloud…
Economy Expected To Have Added 3.5 Million Jobs In June
Economic Expectations Thursday is a big day for labor data. Let's look at a few estimates for this. We are getting the BLS monthly labor report and weekly jobless claims. It will be curious as to how the recent spike in COVID-19 cases impacts jobless claims. We might need to wait a couple more weeks…
Social Media Stocks Lead Friday Correction
Facebook & Twitter Crash On Boycotts The stock market sold off sharply on Friday. A selloff was led by the COVID-19 recovery plays and the social media stocks. It’s very clear why the recovery plays declined since COVID-19 is running rampant in the south and the west. However, the decline in social media stocks is…
Consumer Confidence Follows COVID-19 Crisis
Big Consumer Sentiment Spike In June Final June consumer sentiment reading was 78.1 which was slightly below the preliminary reading of 78.9. It’s tough to tell if that small decline at the end of the month matters. You would think sentiment would be getting worse now because stocks are declining and COVID-19 cases are going…
Warren Buffett’s Portfolio On The Cheap
Strong Last Hour Rally Thursday was a throwback to the last bull market in which the stock market always seemed to rally at the end of the day. There is a famous Twitter account that is named after the 3:30 PM rallies. In the past few months, we’ve been noticing spikes in the AM futures…
Another Bad Jobless Claims Report
Another Bad Jobless Claims Report Jobless claims report in the week of June 20th was terrible which means there have been 2 bad reports in a row. Specifically, the prior report was revised up from 1.508 million to 1.54 million. As you can see from the chart below, this week’s report showed claims fell to 1.48…
June 8th Peak Was Significant
Big Wednesday Selloff The stock market sold off hard on Wednesday as there were the 2nd most new cases of COVID-19 ever; a few cities in the south and the west are near their breaking point in terms of hospital capacity. It’s looking more and more like the June 8th top will be very significant. Significant defined…