The Glory Of Fall Descends Upon Us

Equities start the day lower as the glory of Fall descends upon us. Is there a better season? I’d argue no. Football plus quasi warm weather plus the finish line in sight? Awesome. Plus these are now in stores. Even more awesome. Futures were down overnight for absolutely no reason so let’s talk about two reasons to be bullish. Now I swear I’m not a perma bull.  If you’ve followed my recap for the past few years you would think I was but hey, I’m also trying to be right! Ok here we go. Reason #1 to be bullish is the following article I found on the WSJ’s blog. In it Kostin of Goldman tells us that “Only 23% of large-cap mutual fund managers have outperformed the S&P 500 this year, rivaling the worst performance in the past decade. By comparison, about 37% of fund managers have outperformed the benchmark since 2003. Only performances in 2006, 2010 and 2011 have been as bad or worse than the current year’s pace.” Before I tell you why that’s bullish let me remind you that managing money is hard. Stupidly hard. I don’t envy my clients trials and tribulations at all, they have a mountain to climb that is constantly changing. As for why that’s bullish well it creates an air of chasing into year end. You may think that’s unhealthy for the overall market, and you might be right, but it tends to protect dips and gets PMs to aggressively act as the clock runs out. That should be supportive going forward.  Reason #2 is a bit more esoteric but might actually be more important. CNBCs ratings are at a 21 year low. Let that sink in. The retail day-trading wannabe pro doesn’t care about the market anymore.  Not only is that apparent in TV ratings you can also see it in the godawful equity fund flows. The bubble making / cocktail party stock picker has given up and that’s FANTASTIC for the rest of us. We want investing to be boring, we want people to not care about stocks or stock market TV. Anyway, those are your two “feel good” data points of the day, let’s see if anything happened in the market.

After the open we spent most of the day watching stocks trade lower. No real reason other than a few random Fed / Russian headlines and some general malaise. That’s the thing people, stocks can flat out move for dumb reasons. A tweet about a random artillery piece firing in the Ukraine can cause a 4 point selloff in $SPX. You basically have to ignore nearly all of these intra-day moves because they are fairly whimsical. Any great winners? YHOO +5%, MSI +3.5%, BA +2.5%. So not really. Losers?  NFX -4.5%, GM -4%, EOG -3.5%. Honestly it was a pretty dull session. Twitter was primarily fixated on this awful Ray Rice situation so I tried to use my time wisely by reading this fascinating article in the WSJ on, well, people spending way too much money acting like idiots. $300k in credit card debt? Personal Chefs? Come on MAN!

The afternoon brought nothing spectacular and we closed at 2,001, down about 30bps. Here let me sum up Monday’s price action: totally forgettable, dreary, no real themes, aimless with a hint of body odor. Actually that was the description I found under my name in Baird’s online directory so I need to find some HR people stat. I’m outraged!  

Final Score:  Dow -15bps, S&P500 -31bps, Nasdaq +14bps, Rus2k +19bps.

News Highlights:

We’ll end tonight with some awesome dunks.  I mean who doesn’t love dunks?  Or even saying the word dunk?  I mean I love Dunkin Donuts and that has dunk in it.

Have a good night.