Great Long Boring Streak Ends
Equities start the day lower as our great long boring streak ends. Wait…the long sideways grind in the market ended? No, don’t be silly, that one is gonna be with us for awhile, I mean our long boring streak of no Triple Crown Winners! Way to go American Pharaoh! Your epic success will be remembered by the American public for at least another 24 hours then horse racing will once again disappear into the background like so many faceless men. How about that jobs report on Friday? Wage growth plus employment growth? Best of both worlds if you ask me, unless you were rooting for bad news so the Fed won’t hike anytime soon. Unfortunately jobs reports seem to have lost their impact on the market, other than the first 30 minutes of the day Friday was a complete snooze fest. Then again Mondays have been snoozefests too, I can’t even tell you the last Monday that mattered. Did the investing world decide that Fridays and Mondays are for catching up on bill paying and screen staring? Oh well, here we sit smack dab in the middle of the range waiting for the Fed to do or say something. I miss the days when earnings and, you know, company specific stuff actually mattered. I might lodge a protest about this new “the only thing that matters is central banks” world. Who can I email? Lagarde? Draghi? Does the ECB have some kind of message board I can post on?
After the open it was another summer session filled with low volumes and lower prices. Let’s circle back to the market in a second because I want to point you to this awesome story that reminds me of 1999. Check out this quote: “Consumers like Tom Zhang are deferring big-ticket purchases to chase the rally. The Beijing resident was deciding between a Buick and a Volkswagen Passat before concluding his 300,000 yuan ($48,000) would be better off in equities. He was right, as his holdings soared to 800,000 yuan in value in little more than a year. “I feel like I am good at this, that I can make more,” Zhang, 26, said as he left a branch of Qilu Securities Co. in Beijing. “Why would I kill the hen when there are more eggs on the way? I can always buy my car later.” The dude skipped buying a car so he could invest in stocks! Can you believe that? Roll out the Stewart commercial in China stat! Yea it must be a bubble in the US because the CAPE Q Stark Crestmont Ratio is at 4.285 on a rolling twelve month basis. Sigh. Anyway, it might’ve been slow today but the market sure dumped on itself. Down all morning long for no reason at all to land on 2,081 (-0.55%). Seriously, there was NO NEWS, none. No economic data, no speeches, nothing out of Europe, zip, zero. I guess the market really wanted to get back in the middle of this year’s range because heaven forbid we sustain a breakout. Winners were few and far between (SEE, FTR,TWX, BLL) while losers were everywhere (WYNN, AAL, DAL, EBAY, AVGO). Pretty ugly first half, let’s see if our back 9 was as bad as Tigers on Saturday.
It wasn’t quite that bad, but it was still bad. A random Greek headline came across but come on, we get those hourly so who cares. A brief uptick was summarily smacked and by the time we closed we were back near the lows, 2,079, down 0.6%. Only 6 names in the S&P were up more than 1%, and NONE were up more than 2%. I wish I could make more of price action but it was deadski and volume was low so let’s just chalk it up to Monday blues. Hopefully tomorrow brings greener pastures because today was godawful.
Final Score: Dow -46bps, S&P500 -65, Nasdaq -92bps, Rus2k -58bps
- Succinct Summation of the Day’s Events: Beyond quiet with no catalysts. Sell off just a continuation of the weakness we’ve seen the past few sessions.
- This article was all the talk today: Why I defaulted on my student loans. What’s the main takeaway here? Borrow a bunch of money then just tell people to pound sand? Does this guy really want people to just walk away from something the Gov’t can collect from you all the way to your grave?
- Vox explores the myths around Happiness. I definitely suffer from #3 but I’m trying to work on it. “Many of my patients get wide eyes when they see people with bigger cars, bigger houses, more expensive wardrobes, and the latest gadgets. They think, "If I had that, I'd be happy!" This fantasy is partly due to canny advertising presenting us with the equation that expensive things = lasting happiness”.
- Ever seen a $14 bloody mary?
- You know, there have been bull markets that didn’t end in a crash. “There is also an assumption being made by investors that this bull market must “end badly” because they always do. The two prior crashes from 2000-2002 and 2007-2009 are fresh in everyone’s memory so it’s easy to draw parallels to those scenarios after the latest run-up. Good luck going a week without hearing about how eerily similar things are to the tops in 2000 and 2007. Seeing the market get cut in half seems like a natural conclusion to this bull market.”
- I wouldn’t mind if Heaven looked like this
We’ll end tonight with one CRRRAAZY mountain biker. Why do I feel like that slope is steeper than we think.
Have a good night.