At the open: Dow -0.97% to 15092. S&P -1.09% to 1625. Nasdaq -1.12% to 3435. Treasurys: 30-year -0.32%. 10-yr -0.32%. 5-yr -0.21%. Commodities: Crude -1.47% to $94.36. Gold -1.16% to $1369.95. Currencies: Euro -0.02% vs. dollar. Yen -1.83%. Pound +0.03%. [View news story]
That QE taper may end up being a QE expansion as FRBNY President Bill Dudley tells a gathering in Japan the uncertain economic outlook has him unsure if the next move will be up or down. He worries about investor over-reaction to a "normalization" of policy and suggests the FOMC may need to update what it needs to see to move in that direction. Stocks like the "up" talk, the S&P 500 (SPY +0.4%) at a fresh session high. [View news story]
Expanding QE would be ridiculous and totally unnecessary in my opinion..
"High Beta" is hot with the PowerShares S&P 500 High Beta Portfolio (SPHB) pulling ahead of the Low Volatility Portfolio (SPLV) YTD after notably underperforming in Q1 and early Q2. Markets make opinions, and Sam Stovall thinks the momentum in high beta is set to continue as yield-starved investors look to capital gains instead of dividends. [View news story]
Unsupportable Fervor Requires An ETF Wish List [View article]
"Problem is... I can't tell how many people I know that want to buy on a 5% to 7% pullback"
Which means no 5-7% pullback at this time. The market isn't in the habit of backing up to let all the laggards climb aboard. You've got to pay up to ride this train.
Tepper rally redux - stocks are near session-highs in the noon hour, the DJIA +0.6%, the S&P 500 +0.9%, the Nasdaq +0.8%. Up 2.5% to a new 52-week high, Bank of America is the Dow's biggest gainer. The 10-year Treasury yield is flat at 1.92%. [View news story]
Even I will admit things are getting a little frothy. Nonetheless, it's hard to see anything on the horizon that will cause a meaningful correction. Path of least resistance continues to be up.
Escape Strategies For When The Stock Market Starts To Burn [View article]
"Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria" - John Templeton
I don't think we are at the optimistic/euphoric stage yet. At this point, my guess is any attempts at starting a fire in the Cocoanut Grove will be quickly doused by waves of liquidity.
The Good News, The Bad News And What's Very Ugly [View article]
" Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria" - Sir John Templeton
If Sir John's statement is correct, this market has a lot of upside ahead. Judging from the mood of the Seeking Alpha patrons, I would say we're only at the stage of "Skepticism". There is a long, long way to go to get to the point of euphoria.
Personally, I'm at the Complacency stage, secure in the knowledge that Uncle Ben has my back. Not that we couldn't have a little downturn at some point this summer, but anything more than a 5% pullback would be an absolute gift to those skeptical, bitter bystanders desperately looking for an entry point.
Stocks recover from early losses, returning to about unchanged in the noon hour. Notably lower today is the utility sector (XLU -1.2%) which is used to outperforming, but not this month. Ahead of the S&P 500 by about 700 basis points at the start of May, the XLU is now even with the broader market for the year. [View news story]
Market recap: Stocks finished near session highs, and the S&P tallied a fifth straight record close, as profit outlooks from companies including Electronic Arts helped boost sentiment. Industrial metals moved higher after China's better-than-expected trade surplus, which saw strong improvement in imports and exports. Treasurys rose despite a tepid auction; gold climbed 1.7%. [View news story]
"This will end ugly-just like 1999 and then all the CNBC cheerleaders and Bernanke fans will blame him and say we all should have seen this bubble"
This probably will end badly, but from much higher levels.
In 1999, the Fed started trying to slow the economy. They raised interest rates 6 times before the market finally cracked in 2000.
We're nowhere near the valuations or the investor euphoria of 1999. And the Fed is nowhere near trying to let some air out of the bubble.
Monday Market Movement: Time To Sell In May [View article]
"It is a big mistake to use any data from ZH to make market decisions in the short-term or even intermediate-term. The divergence between macro data and the equity market has been going on far longer than the past 60 days, try maybe 4 years."
Very, very true.
No meaningful market correction is on the horizon. We still haven't seen the wholesale investor capitulation necessary to put in a market top. I take comfort in the fact that the prevailing investor sentiments on Seeking Alpha and other financial media outlets are skepticism, bitterness, and disbelief....not euphoria and exuberance.
Sure, the market is being assisted by a few central banks, but this is nothing new. It doesn't change the fact that for now, the Bernanke Put is alive and well.
"It is virtually unheard of for markets to go up for a year without at least one correction (10%+)."
Where is the money to go? This could be a repeat of 1995, where the S&P 500 went up 33% in a virtual straight line, with no worse than a 3.5% correction the entire year.
At the open: Dow -0.97% to 15092. S&P -1.09% to 1625. Nasdaq -1.12% to 3435.
Treasurys: 30-year -0.32%. 10-yr -0.32%. 5-yr -0.21%.
Commodities: Crude -1.47% to $94.36. Gold -1.16% to $1369.95.
Currencies: Euro -0.02% vs. dollar. Yen -1.83%. Pound +0.03%. [View news story]
Are Equity Investors Pushing The Gas Pedal Too Hard? [View article]
I wouldn't call this euphoria....it's more like resignation.
Resignation to the fact that central banks are going to continue to print and as a result, the markets are going to continue moving upward.
For every euphoric investor, there are 10 disgruntled ones that feel underinvested in equities.
So, until we see wholesale investor capitulation, the path of least resistance continues to be higher.
That QE taper may end up being a QE expansion as FRBNY President Bill Dudley tells a gathering in Japan the uncertain economic outlook has him unsure if the next move will be up or down. He worries about investor over-reaction to a "normalization" of policy and suggests the FOMC may need to update what it needs to see to move in that direction. Stocks like the "up" talk, the S&P 500 (SPY +0.4%) at a fresh session high. [View news story]
"High Beta" is hot with the PowerShares S&P 500 High Beta Portfolio (SPHB) pulling ahead of the Low Volatility Portfolio (SPLV) YTD after notably underperforming in Q1 and early Q2. Markets make opinions, and Sam Stovall thinks the momentum in high beta is set to continue as yield-starved investors look to capital gains instead of dividends. [View news story]
Unsupportable Fervor Requires An ETF Wish List [View article]
a 5% to 7% pullback"
Which means no 5-7% pullback at this time. The market isn't in the habit of backing up to let all the laggards climb aboard. You've got to pay up to ride this train.
What Equity Bubble? This Bull Run Has Only Just Begun [View article]
In the words of the late, great Sonny Bono...."The beat goes on...the beat goes on."
Tepper rally redux - stocks are near session-highs in the noon hour, the DJIA +0.6%, the S&P 500 +0.9%, the Nasdaq +0.8%. Up 2.5% to a new 52-week high, Bank of America is the Dow's biggest gainer. The 10-year Treasury yield is flat at 1.92%. [View news story]
Escape Strategies For When The Stock Market Starts To Burn [View article]
I don't think we are at the optimistic/euphoric stage yet. At this point, my guess is any attempts at starting a fire in the Cocoanut Grove will be quickly doused by waves of liquidity.
Stay long, my friends.
The Good News, The Bad News And What's Very Ugly [View article]
If Sir John's statement is correct, this market has a lot of upside ahead. Judging from the mood of the Seeking Alpha patrons, I would say we're only at the stage of "Skepticism". There is a long, long way to go to get to the point of euphoria.
Personally, I'm at the Complacency stage, secure in the knowledge that Uncle Ben has my back. Not that we couldn't have a little downturn at some point this summer, but anything more than a 5% pullback would be an absolute gift to those skeptical, bitter bystanders desperately looking for an entry point.
Stocks recover from early losses, returning to about unchanged in the noon hour. Notably lower today is the utility sector (XLU -1.2%) which is used to outperforming, but not this month. Ahead of the S&P 500 by about 700 basis points at the start of May, the XLU is now even with the broader market for the year. [View news story]
Market recap: Stocks finished near session highs, and the S&P tallied a fifth straight record close, as profit outlooks from companies including Electronic Arts helped boost sentiment. Industrial metals moved higher after China's better-than-expected trade surplus, which saw strong improvement in imports and exports. Treasurys rose despite a tepid auction; gold climbed 1.7%. [View news story]
This probably will end badly, but from much higher levels.
In 1999, the Fed started trying to slow the economy. They raised interest rates 6 times before the market finally cracked in 2000.
We're nowhere near the valuations or the investor euphoria of 1999. And the Fed is nowhere near trying to let some air out of
the bubble.
It's way to early to leave this party.
Sell In May? Maybe A Little, But Rotate [View article]
Amen brother!!
"The Road Goes On Forever and The Party Never Ends"- Robert Earl Keen
Monday Market Movement: Time To Sell In May [View article]
Very, very true.
No meaningful market correction is on the horizon. We still haven't seen the wholesale investor capitulation necessary to put in a market top. I take comfort in the fact that the prevailing investor sentiments on Seeking Alpha and other financial media outlets are skepticism, bitterness, and disbelief....not euphoria and exuberance.
Sure, the market is being assisted by a few central banks, but this is nothing new. It doesn't change the fact that for now, the Bernanke Put is alive and well.
The path of least resistance continues to be up.
April Nonfarm Payrolls: +165K vs. consensus +145K, 138K previous (revised from +88K). Unemployment rate 7.5% vs. consensus 7.6%, 7.6% previous. [View news story]
It's a win-win situation.
Sell In May? [View article]
Where is the money to go? This could be a repeat of 1995, where the S&P 500 went up 33% in a virtual straight line, with no worse than a 3.5% correction the entire year.