Equities start the day lower as the hilarious symmetry of markets rears its clown face. Honestly, you have to laugh at this thing from time to time or you’ll go insane from the bouncing around. On the lows the following things happen: people get worried about a recession, people say the Fed is done cutting rates, everyone gets bearish in the sentiment polls, and people lower their SPX price targets. So what happens as you approach the highs? People say the economy is doing ok, people say the Fed might hike sooner rather than later, everyone stops being bearish in sentiment polls, and people start talking about new highs in SPX. I mean come on, are we really going to do this every 100 points? What if this is all just the middle? What if we are just seeing a period where the market swings around because there’s no clear trend? What if I told you that the S&P500 has underperformed 1 month Tbills in 12 of the last 20 months (h/t @michaelbatnick). Why? Because it just keeps going nowhere. Big rise. Big fall. This is all noise, all of it. There is no trend, stop trying to make one up (a lesson I learned painfully over the past month) I’m going to point you to the following link and give you this quote because it’s all you need to know right now: “A flat-ish market is out of the ordinary. Investors don’t like to see things that are out of their comfort zone. When nothing is happening in the markets people tend to try to make something happen on their own. The problem most don’t realize is that trying harder in the markets tends to leave you worse off, not better. Patience is always a virtue in the markets, but maybe more so during a bunny market. You can’t force things.”
After the open it was WHAT WE THOUGHT IT WAS, a holiday tape where all the action was in the first 30 minutes and then everyone left for Texas or Missouri or Alabama or wherever their family trips took them. It’s been a really slow week and today was no different my friends. Hey, let’s talk economic data because there’s really nothing else for me to write about. Weekly Claims is still as good as it gets, Durable Goods are chopping along, and people still aren’t eating enough BBQ in Kansas City to get the regional index into positive numbers. All of these are same old same old, absolutely nothing stands out as a game changer. The big winner today was PVH, who is seeing explosive growth for Tommy Hilfiger in China. Man I remember wearing those blocky symbol shirts and rocking their sweet sweet cologne. Ahhh, college. Hey you know what else in is PVH’s pile of luxurious brands? Tommy Bahama! Is it bad that this is literally my favorite clothing store? Does something happen at age 40 when Hawaiian shirts and chinos suddenly become your defacto “lemme lounge around wardrobe? Though maybe it’s just me...oh God please say it’s not just me. Where were we, oh yea markets. A whopping 6 point range for the first half of the day led to all sorts of talk about Wisconsin vs Notre Dame and whether or not this is the most disgusting food on the planet (I voted yes).
The back half saw us rally up to unchanged where we finished an absolutely uneventful week. Now the bullish side of this would say “we ripped off the Feb lows so a week of sideways is good for us to digest” and I guess you could say that’s true. The bearish side would say “we’ve stalled out, oil has turned over again and there’s no upside catalyst left” and I guess you could also say that’s true. Or, like I said in my opening paragraph, we could all settle on the notion that nothing much is going on, that we are stuck in a super long sideways range with random volatility exacerbated by machines and the proliferation of ETFs. And you know what? That would also be true. So let’s keep chatting about markets because it fun and engaging but remember that a grain of salt is often needed when you look at day to day movement. This is the long run. This is the long run. This…is just the middle. Anyway, have a good holiday, chase down some chocolate eggs, hug your family, or just enjoy a quiet weekend. Thanks for spending 5 minutes reading my ramblings, I always appreciate it.
Final Score: Dow +8bps, S&P500 -4bps, Nasdaq +10bps, Rus2k +36bps.
I have two links tonight because everyone already checked out so let’s end this puppy.
The first is an optimistic look at where we might go in the short term!
The second is an early favorite for Dad of the Year. Kudos dude…kudos.
Have a good night