I Go On A Couple August Vacations And This Is What Happens?
Equites start the day higher as more and more people climb out of their bunker. Look, I may not be level headed all the time, I’m prone to making dumb decisions like eating Taco Bell at 11pm and choosing trading as my career instead of coding, but anyone who sold stocks because they were worried about Nuclear War has gone off the deep end. There isn’t going to be Nuclear War, there will never be Nuclear War, the principle of M.A.D will always be a thing. Nuclear weapons exist as a deterrent against being attacked that is their main use in our world. Right now I’m putting “War with North Korea because Trump said some mean words” right next to “Ebola” as the dumbest bricks in the Wall of Worry. Now I’m angry. I go on a couple August vacations and this is what happens? Come on now, we’ve seen lots of dumb reasons to sell, don’t get caught up in them. Here, you want a reason to sell something how about these? 1) weekly jobless claims put in a wide bottom and start rising 2) auto sales fall off a cliff 3) the yield curve inverts 4) Batman opens a hedge fund, plays super loud heavy metal music at his desk while buying protection on garbage level loans with a AAA rating on them and 5) the stocks you currently own sell consumer related things in a mall with a Sbarro’s and a bunch of angsty teens. Any of those is a reason to sell. Man I’m angry. You know what’s making me even angrier? The fact that Big Ben won’t BONG for the next 4 years. Hold on a second…hold on…..the Luftwaffe and Buzz bombs couldn’t stop the best clock in the world from reminding everyone that England will NEVER back down in the face of evil however a bunch of dudes cleaning it with Windex are silencing her song? Now I’m super angry. Oh and it takes 4 years to fix a CLOCK? Are you joking me? And you wanna be my Brexit salesman? Come on man, London is the best city in the world bar none. Get it together people (and open more Taco Bell’s there please).
After the open most of the action was centered on retail names and since I love poking fun at retail names this should be a fun section. All of the following happened on a day where Retail Sales rose at the fastest pace this year. DKS fell 23% because I guess you can buy golf balls and basketballs online? They blamed weak “hunting sales” but I don’t know….that dog won’t hunt. HD fell 2.5% because literally everyone owns it. I’m not sure how “sky high” expectations were but Chuck Yeager probably couldn’t meet them. AAP dumped 20% because, I don’t know, let’s be lazy and assume people are buying bumpers and oil filters on AMZN now. COH fell 15%, UAA fell 3%, FL fell 4%, ULTA fell 4%, BURL fell 3%, and AMZN was flat. Thursday Aug 15, 2017, brought you to by “Amazon continues to destroy all retail stocks” incorporated. Am I going to be buying landscape materials on AMZN one day? Like say I need 2 tons of rocks and 5 cu yards of mulch, will that be free shipping or what? Winners were SYF, RRC, RCL, CMG, and WYNN. I wish there was a good story to tell among those names but there wasn’t, WYNN was higher because “china worries are overdone” I mean how boring is that? By lunch the market was sitting on unchanged and I was wondering how much money I could make on Craigslist selling Eclipse glasses. You know every single one of your friends will forget them and have unlimited demand on Aug 21 so little Madison and Grayson can see the show. Don’t steal my idea.
The rest of the day was a whole lotta sideways as August continues to limp along (today was the 3rd lowest volume day of the year). Look, earnings were good and economic data is improving, you can put me in the camp of “grind higher till year end” because you know that’s the likely path here. Whether it is Nuclear War or Ebola or Trump or any of these reasons to sell the market ignores them in favor of punishing dis-believers. We see it time and again, a random event or random headline is believed to be the straw that broke the camel’s back when in fact it gets summarily ignored about 24 hrs later. There will be a time to sell, there will be a top in the Bull market, it just won’t be announced and we won’t know what it was until months later. Stay the course, stay in the game, root for the Bears to beat the Packers. Final score: Dow +3bps, S&P500 -5bps, Nasdaq -11bps, Rus2k -80bps
Volume was really low. Our desk was evenly matched. Buying in Tech and Energy. Selling in Financials and Power Equipment. Shorting in Consumer.
- Succinct Summation of the Day’s Events: Overnight rally due to Europe strength, bit of a US selloff because Retail and Oil stocks puked.
- Hey did I mention AMZN yet? No? Well U.S. companies sure did: “Amazon was mentioned in over 100 company quarterly earnings calls in the past 90 days, from McDonald’s and Ralph Lauren to CVS and Disney, according to Seeking Alpha which analyzed Bloomberg data”.
- Love this GMO white paper sarcastically saying to buy U.S indices no matter what: “Every dollar invested in the S&P has compounded into $2.72 versus MSCI EAFE’s $1.70 and MSCI Emerging’s $1.30. Diversification theoretically sounds good, but as Yogi Berra said, “In theory there is no difference between theory and practice, in practice there is.” “Diversification in this particular instance seems good in theory but not so much in practice.”
- Buybacks are plunging. Remember when it was The Fed propping up stocks and then it was buybacks? Good times. “Share repurchases by American companies this year are down 20 percent from this time a year ago, according to Societe Generale global head of quantitative strategy Andrew Lapthorne” So what’s propping it up now all ye conspiracy theorists?
- Does anyone have these shoes? Apparently there isn’t even a store in Manahttan yet. I think I’ll pioneer them in WI! Now comes the Allbird, a knit wool loafer. In uncomfortable times, Silicon Valley has turned to a comfortable shoe. If there’s a venture capitalist nearby, there’s probably a pair of Allbirds, too.
- This new ATL stadium is CRAZY From revolutionary idea to painstaking build-out, the story behind the most expensive structure in Atlanta history. That eagle statue might be the coolest statue I’ve seen since that green one in NY harbor.
- Who wants to meet at that spot for a drink?
- Things Michael should’ve invented #36
- Things Michael should’ve invented #94
- It’s not that hard to push chairs in. Do we need an internet of everything? Is internet toilet paper next?
- I feel like watching the Jon Benet one would make me upset.
We’ll end tonight with people being awesome because let’s face it, with the news cycle the way it is we already have enough Fail to go around.
Have a good night.