Ben Bernanke Jumps Into The Blogging Game
Equities start the day higher as Big Ben Bernanke jumps into the blogging game! Man, this financial blog space is getting pretty crowded right? If Justin Biebs starts talking PE multiples and DCF modelling I might have to find a new gig. What did Big Ben lead off with? A little treatise on why he didn’t crush older savers (I mean that’s not exactly its main point but it’s what I found the most interesting). Here’s the money quote: “the best way to improve the returns attainable by savers was to do what the Fed actually did: keep rates low (closer to the low equilibrium rate), so that the economy could recover and more quickly reach the point of producing healthier investment returns.” Healthier investment returns! Have to admit…he definitely hit that target right? I don’t know, I guess Bernanke blogging is a good thing. I don’t mind insanely intelligent people walking us thru complex issues but it can’t read like a textbook. Anyway, we walked in to futures up 10 because Europe was having a good day and there were a slew of Biotech deals (was or were there? I need an editor). Look, it’s month end/quarter end, we’re gonna need some happy price action out of this puppy or else negativity is gonna spew forth like so much whipped peas out of a 6 month old. Let’s see if we got it shall we?
After the open not only did our little baby eat his peas, he was buying energy and financials like he had just raised $100mm. Futures were up 10 points at the open, by lunch they were up 26 points! Why all the lovey dovey price action? I’ll tell you why….because markets love to punish people over their skis! Everyone was leaning a bit too bearish last week so a quick reversal makes people scramble to cover. Toss in month end / quarter end and you have the potential for a nice session. That being said, we are still in the “churn” I spoke about on Friday. For any of this to mean anything we need new highs and then AT LEAST one or two days confirming them. Wanna know why volume is so low right now? (Friday was 2nd slowest day of the year) Because this 2050-2120 range has been with us for months. No real reason to act unless there is some kind of trend change. So Dear Market Gods, strike someone with thunder or lighting or some kind of giant wave because the boring is too darn high! Winners: ADI, HCP, ESRX, KMX, CNX, and NRG. Losers ALTR, LO, MYL, INTC, RAI, and CMG. However, dear readers, there were only 10 names in the S&P down more than 1% so that’s pretty tasty action.
The final few hours brought more upside and by the time the bell rang all 10 SPX sectors were green and we had racked up a 1.2% win. Should we care though? I guess a bit, because obviously green is better than red. But the market is still range bound, and even with a big win today it’s only back to where it was last week. Volume wasn’t spectacular so let’s save the big parties and back slapping for another time. Good day though, I won’t minimize it too much. Further gains are needed to ramp up interest!
Final Score: Dow +149bps, S&P500 +122bps, Nasdaq +115bps, Rus2k +140bps.
- Succinct Summation of the Day’s Events: Oversold bounce into month end / quarter end. Still stuck in a range though so hard to get overly excited. That being said, nice day, nice price action.
- Look what happened to the arguably the biggest, most liquid instrument in the world last year. So yea, I’m sure algos will handle tons of equity orders just fine in the next market dislocation. Shouldn’t be any issues at all….
- Buffett Indicator: still high..
- All kinds of new computer driven financial planning services are cropping up using historical models as asset allocating guides. But you know what? They can never understand human psychology and market sentiment. The author of this article does a great job speaking on the topic: “Anyone who has been investing for more than 20yrs understands that forecasting market prices and target dates based on historical precedent has never worked in the past. Market prices are based on market psychology and circumstances at the time. Market psychology and circumstance never repeat! This is why we continue to have unpredictable investment bubbles as investors always seem to lurch into believing that some situation is somehow without precedent.” This is why I talk about sentiment so much. I’m always looking for clues on it because I believe subtle shifts act as the best tells. That’s why I ask “do new highs bring euphoria or skepticism?” If more people say euphoria, its worry time.
- Speak of worry time…should we be concerned about this dramatic drop in Earnings growth for Q1 2015? Hard to say…but allow me this one thought: would you rather the market jump over a broomstick or a 8 foot fence? Do we really want soaring earnings expectations?
- I have unlimited respect for this woman. Incredible.
- So I love Cadbury chocolate bars. In fact once I get thru security at Heathrow I make a beeline for that Boots or whatever it’s called so I can buy some for the ride home. Anyone know where I can source this?
- Things Michael should’ve invented #49. These are so cool.
- So I’m not big into running, in fact I can’t remember the last time I ran. Anyway, they should have a marathon on this island. Or a car race. Or anything that goes in a circle. Followed by drinks on every part of the beach.
- Dear Apple: this is a drop test I want my iPhone to pass.
- Easter Stock market returns from Bespoke! Historically, the week ending on Good Friday has been a good time to hold stocks, with average returns of 83 bps since 1945 and 58 bps in the last thirty years.
- Target should’ve used this video as an ad during the Tourney. I’m doing this next time.
- Teaser trailer for the next Walking Dead series. I’m in.
We’ll end tonight with a human rubber band. I swear, can you imagine what would happen if that thing breaks? It’s like a carrier aircraft launch. Would you ever do this?
Have a good night.