S&P 500 notches fifth straight record closing high, fifth straight quarterly gain

For the last day of Q2 there was another flight from tech and into value as the Nasdaq suffered a modest setback but the Dow zoomed 210 points and the S&P, with four straight closing highs, edged up another 5 points for a fifth straight record. The S&P is up 14% for the first half of the year and has also clocked its fifth consecutive month of gains. It is the second best first-half performance since 1998.  The payroll report showed more than 90,000 more new jobs than had been forecasted for a total of 692,000 adding more assurances that the Fed is right about inflation, that it’s only transitory. The market continues to be on a tear with volume very close to the 4-week average at 10.8 billion.  

S&P, Nasdaq rise to record closes

All the indexes rallied this morning, the Dow up nearly 200 points, before drifting into a steady decline with each closing with only very modest gains. In other words, based solely on closing numbers, the market didn’t move at all today. But since the S&P and Nasdaq had already reached new records in prior sessions, it was another new record for both today. They called today a “digestion period” as everyone awaits Friday’s payroll report but an upbeat consumer confidence report (the highest in over a year) triggered the big wave this morning and especially sent investors more than ever back to tech, as inflation worries continue to wane.  Q2 reporting begins in a couple of weeks and is expected to be a fifth straight quarter of gains. As the market waits for more data, volume remains below average at 9.6 billion. 

Tech stock rally sends S&P 500 and Nasdaq to record highs

As has been the trend for some time now, one day sees investors flooding out of tech and into value, another day the reverse.  Today was the reverse with the markets rotating out of cyclicals and into tech as Q2 looks to be robust and while interest rates are low and the environment is risk-on. The S&P is up 14% for the first half of 2021 and Q2 S&P earnings growth is expected to top 60 percent. Later this week will be the critical monthly reports on consumer confidence and employment. Volume was below the 4-week average at 9.5 billion. 

The Folly of Global Housing?

For the third weekend, there is no weekly summary on The Big Picture blog. Is it safe to say Barry Ritholtz has discontinued it? I emailed him about it, told him that it was the one post every week that everyone in my group valued the most, but he has not responded. So what do you need to know except that on Thursday and Friday the market fully recovered all the losses from the previous Thursday and Friday.  

Seeing Price and Volume

For your weekend reading this time around I submit the PowerPoint presentation on Price and Volume at the June AAII meeting. It's a brief set of slides but there is some useful resource info in there.  

S&P 500 closes at record high, lifted by Nike and banks

For a second day the markets processed the better than expected inflation data and infrastructure deal and pulled profits out of tech and back into the more conventional sectors of materials, banking and industrials.  The S&P reached a new record and PCE data lent further assurances that inflation was under control. As today’s expert put it, “The positive news from the infrastructure package favors the S&P more than Nasdaq. The Nasdaq does not pour cement into roads and put steel in bridges. That’s the S&P.”  The Russell reconstituting its indexes today artificially inflated volume figures to an enormous 15 billion vs the 11.2 billion average so we’ll have to wait until Monday for more reliable data. 

Nasdaq and S&P 500 end at record highs; Dow rallies

As of today, I have officially recouped the $4,000 I lost last week during the big dip and both the S&P and Nasdaq have reached new highs for the third consecutive day.  Once again there was a rush to tech with the growth index spurting 4% vs a decline of 2% in the value index. But overall, value is still beating tech with the S&P up 14% for the year vs 11% for the Nasdaq.  Unemployment fell but not by nearly as much as the forecast – 7,000 vs the expected 31,000. The economy grew by 6.4% in Q1 which was right on forecast.  We’ll see how the week ends. Volume was considerably below average at 9.2 billion. 

Tesla lifts Nasdaq to record-high close, S&P 500 dips

From reading the Reuters comments below you’d conclude that a lot happened today. But the chart tells a very different story, one of almost no activity at all.  Yes, there was a modest dip in the Dow and a modest hike in the Nasdaq which, since the Nasdaq closed at a new record yesterday, there was another new record today. But all three indexes were relatively flat compared to recent sessions, this despite the good news on manufacturing even with supply chain problems and the labor shortage. There was at least finally an explanation for why inflation fears are this time helping the tech sector instead of hurting it.  As today’s expert says, “People are ploughing money into what has worked, momentum-chasing using the last three years to figure out what to chase.”  And, of course, tech is what to chase.  At least the meme stocks finally had a bad day. Their strategy of deliberately chasing bad stocks to make huge profits shorting backfired big time today. Just as there was little movement, there was also light volume coming in under average at 9.3 billion. 

Nasdaq ends at record high as Big Tech companies roar back

It was a second day of climbing for all three indexes with the Nasdaq taking off just as strongly as yesterday (and reaching a new record) as more and more investors get back to tech, presumably  because of the interest rate scare even though usually the threat of rate hikes and the subsequent inflation would send people flying from tech. So I am unclear as to why everyone’s buying tech right now because of rate hike fears. Whatever, value has still benefited, continuing to mostly outperform growth all year. Volume was weaker than usual at just 9.5 billion. 

Wall Street ends sharply higher, led by surging Dow

Today the market decided that the recovery was more important than inflation concerns and thus ploughed all kinds of money back into the traditional stocks expected to do well in the rebound – banks, energy and other economically sensitive sectors. The Dow thus soared 596 points, recovering more than half of last week’s losses, and the value index more than double outperformed the growth index. This is exactly the opposite of what happened last week when everyone got spooked by the Fed’s hints of hawkishness. The S&P is being schizophrenic engaged in a tug of war, not sure if it wants easy money or tight money, an overheating economy or a bountiful recovery. On Friday, the Russell rebalances all of its indexes, which could have big repercussions on trillions of dollars of capital. Volume remains quite vigorous but, at 10.1 billion, still below the recent average of 11 billion. 

Best Stocks to Buy in 11 Different Sectors

For the second week in a row, Mr. Ritholtz has not published his usual weekly summation which has been a regular feature every Friday (which I post on Sunday) for all the years I've been following his blog.  Needless to say, the biggest news is that with the Fed announcing that new rate hikes MIGHT be coming sooner than expected (first they said maybe 2023; on Friday Bullard said maybe even 2022!), the Dow dropped a thousand points between Thursday and Friday.  The good news: the only reason they're even considering it is because the recovery is going better than expected.  

Inside Convertible Bonds

For your reading this weekend, I submit the latest posting from the AAII, this one on the ins and outs of convertible bonds.  I never really understood convertibles until I took a seminar a few years back at the Financial Planning Association (FPA) of Michigan. It was very impressive and made you wonder why anyone would want to invest in anything else.  After all, convertibles gave you the best of both worlds -- the growth of equities when the market was up and the yield of bonds when down. And the investor gets to decide which to take when it's time to cash in. This is a win-win.  (As always, you do need to be an AAII member to read the entire article.)  Have a great weekend.  

Wall Street ends sharply lower after hawkish Bullard spooks investors

Day #3 of investors reacting badly to the slightest hint from the Fed that interest rate hikes may be in the future sooner than expected. Today the trigger was Commissioner Bullard substantially upping the stakes with his suggestion that, rather than the 2023 date that spooked the markets Wednesday, that it might instead be as early as next year. The markets went tumbling, particularly the Dow diving 533 points. The Dow is now down about 1,000 points in three days.  Of course today’s expert said that it might just be old fashioned profit taking and that not all Fed officials are as hawkish as Bullard. There’s bound to be more volality in the coming week as more Fed governors give more speeches, some hawkish, some dovish. Volume was huge at nearly 15 billion, but this must be dismissed as today was “quadruple witching day,” the day each quarter when all options and futures contracts expire thereby artificially greatly exaggerating activity. Today in fact saw the largest volume of options expirations in history. 

Nasdaq closes up on tech stocks strength, as hawkish Fed limits S&P

Investors continue to digest Wednesday’s surprise Fed announcement that interest rate hikes MIGHT be planned for as early as 2023, but on Thursday it seemed to have the opposite impact. It should have lifted industrials and taken tech down a notch, but instead the focus shifted to the strength of the recovery which triggered another exodus out of the Dow and back to tech, which is also odd since a strengthening economy should have done the reverse. The Dow sank 210, the Nasdaq lifted 121 and now within 13 points of its record. Jobless claims rose even though layoffs have eased due to the labor shortage.  Volume was above the 4-week average at 11.7 billion. 

Wall Street closes lower as Fed officials project rate hikes for 2023

Investors have been waiting for today’s Fed meeting for cues on whether the dovish policies would continue and basically the answer was yes.  The big difference was the announcement of possibly beginning new rate hikes in 2023 instead of 2024, all of course contingent on the recovery continuing to go well.  Still it came as a shock that the timetable had been moved up an entire year. It shouldn’t have. After all, the only reason rates have been kept so low is to aid a faltering economy and keep credit flowing. So any move to raise rates just signals that the economy is doing well and anyone should take that as good news, especially since we’re looking at a minimum of 1-1/2 years before anything happens. But since low rates have also been a major driving force behind this very long bull market, investors don’t want to see them go up, even if it isn’t for a long while. Volume was just a little above average at 10.9 billion. 

Wall Street ends down as jittery investors await Fed report

The monthly Fed meeting begins Wednesday so everyone went into defensive mode today especially in light of new reports showing increasing inflation and decreasing retail sales. All three indices sank and the market will anxiously await more Fed cues on inflation. But the weakness is very small and the expectation is that the the Fed will announce near summer’s end a plan to reduce the bond buying but that said plan won’t be executed until next year. All the indices are so far up for the year and volume remains a little below average at just under 10 billion. 

S&P 500, Nasdaq hit record closing peaks on eve of Fed meeting

With inflation fears being momentarily cooled, the Nasdaq and S&P rose modestly to new records as investors continued the exodus from industrials and financials and back to tech. The Fed meeting is mid-week and all eyes will be on whether there’s any shift in the dovish position on the economy … and more cues on inflation. But as today’s expert says, “To think it’s a good idea to make substantive changes [to inflation policy] right now is silly.”  Volume is a little below the 4-week average at 9.8 billion. 

An illustrated explainer of the factors driving up the market.

You're all well aware that I customarily provide Barry Ritholz's Weekly Summation from his Big Picture blog each Sunday night. And for as long as I've been doing this Marias blog, he has published this summation each weekend.  But not this weekend. Go figure. I hope he has not discontinued it. However, the bonus this Sunday may be just as valuable as he posted today this comic book style text book on all the forces moving the market right now. It's not just instructional, it's very entertaining. Enjoy and hope you all had a great weekend.  

8 Short Squeeze Stocks That Could Take Off

I have expressed skepticism about the short squeeze strategy of these so-called "meme" stocks. But just to show that I can be open-minded, I thought I would share this week's edition of U.S. News Invested whereas the editors picks of the  best of these meme stocks are layed out. Hope everyone is enjoying the weekend, or at least Sunday when supposedly this wretched humidity will finally begin to fade.  

Wall Street ekes out gains to close languid week

After yesterday’s good news regarding inflation which raised all three indexes after an otherwise tepid week, today everyone took a breather with the market hardly moving at all in the absence of either good or bad news. Much of the trading was again in the meme stocks with retailers swarming to the Big Short on social media driven stocks. Volume was below average at 9.1 billion. 

S&P 500 closes at record high as long-term inflation fears abate

The long awaited CPI report that would show us the longterm inflation picture (which everyone assumed was going to be bad, thus the big sell off yesterday) instead came in with flying colors.  All three indexes rose, the S&P to a new record, and especially the tech-heavy Nasdaq as inflation has been considered the biggest threat to tech. But as the Fed has been saying all along, the recent spike in inflation is temporary and due to the reopening and the subsequent huge spike in demand for which the supply chain was wholly ill prepared. A half billion dollar infrastructure bill was passed by the House and the short squeeze retail meme rally continues in earnest. Volume was right in line with the 4-week average at 10.6 billion. 

U.S. stocks end lower ahead of inflation report

In anticipation of a bad inflation report on Thursday when the CPI numbers come out, the markets all dropped except for the surge in the Nasdaq that went on most of the day but then dropped to close almost even. The meme stocks continue to go crazy with heavy shorting. I remain suspicious that this must be illegal and I await the results of the investigation. Volume was again above the 4-week average at a very vigorous 11.5 billion. 

S&P 500 closes little changed as "meme stocks" extend rally

With most investors waiting on more data, particularly in regards to inflation, and with the so-called “fear” index at its lowest in a year, there was really nothing much out there to move the needle except for the so-called “meme” movement of retail investors boosting certain stocks based on advice received via social media platforms. For strange it was that for about half an hour this morning right around 11 a.m., all the indexes sank dramatically, the Dow almost 200 points, then came right back the rest of the day for modest gains and losses by close.  And no explanation to be found as to what happened at that hour. All eyes right now are waiting for Thursday’s CPI report to see how inflation is going. Volume was above the 4-week average at 11.8 billion. 

S&P closes nominally lower as investors wait for a catalyst

With today’s proposal of a global minimum corporate tax rate, inflation fears sprung up again and the Dow and S&P dropped a bit while the Nasdaq rose a bit.  (As has been the case for a long time, any hint of bad news drives investors back to tech.) As today’s expert put it, there continues this “flip-flop between inflation being transitory or persistent.” The next cue in this regard will be Thursday’s CPI report.  Volume was pretty much in line with recent averages at 10.5 billion. 

Succinct Summation of Week’s Events for 6.4.21 (plus a 10-second history of COVID in U.S.)

Below is the weekly summary, the main positives being 300 million vaccine doses and unemployment falling, the main negative that payrolls rose less than expected. The bonus this Sunday night is a very intriguing 10-second animation that illustrates the entire progression of COVID from Day One until June 1.  Hope everyone enjoyed this very pleasant weekend. More heat and humidity coming tomorrow. 

The FIRE Strategy and Rule of 4

There was an article posted today on the Big Picture website that I found irresistible. Reprinted from "The Hustle" magazine, it's all about a financial movement amongst millenials using a strategy they call FIRE (Financial Independence, Retire Early) and following the 4% Rule (the ideal annual percentage to withdraw from a retirement account - while earning an annual 8% return - to maintain your lifestyle without touching savings), all with the goal of reaching your financial objectives and retiring at the age of 30.  This approach may seem a bit severe to some, but it makes fascinating reading.  There are some terrific graphics in the article that I could not include below but click on the link and you'll see them.  Enjoy the weekend.  

Tech drives Wall Street higher as jobs report calms inflation fears

There have been a couple times this week that good news was taken as bad and the market declined. Today was the reverse, bad news taken as good with a tepid employment report that the markets took as reassurance that the Fed would keep interest rates low for the foreseeable future. And the buyers went crazy, the all three indexes up considerably, the Dow up 179.  In just the one day, the S&P went from being up 11.6% for the year to being up 12.6 percent and now just a whisper from its record. Volume was a little below average at 9.9 billion. 

S&P 500, Nasdaq dragged by tech as upbeat data fans inflation fears

It was still another day that the markets were up at first, then came down. Once again, good news is taken as bad. With payroll coming in better than expected and Biden modifying his approach to the corporate tax hike, investors saw the glass half-empty with continued worries about the good news contributing to inflation, coupled with the Fed’s statement of maybe unwinding last year’s emergency bond holdings. So the indexes all fell modestly into the red, the Nasdaq moreso as inflation is seen as hitting the tech stocks hardest. But still the S&P is up nearly 12% for the year and also just shy of its record. Volume was again above average at 12.5 billion. 

Wall St edges up ahead of key economic data, AMC soars

Once again the indexes were up in the morning, then down in the afternoon but at least all three closed with some very modest gains. There may be some caution ahead of the private payrolls report on Thursday and Friday’s employment report and hoping both are better than last month. Inflation worries continue to consume the markets but optimism remains that these will be short term. Volume was above the 4-week average at 12.2 billion. 

S&P 500 dips, as healthcare weighs; Dow ends higher

The day following the long weekend started with the Dow up – way up! – about 300 points – then steadily declined immediately before losing all but 45 points by close. The Nasdaq and S&P had slight losses. Inflation remains a concern but is seen as temporary as the economy continues to recover nicely. Supply chain issues coupled with manufacturing backlogs and a labor shortage are the chief contributors to the malaise, all of which are seen as short-term. Volume is right in line with the 4-week average at 10.7 billion.