Can't Stop This Market

Equities start the day higher as you CANT STOP THIS MARKET, YOU CAN ONLY HOPE TO CONTAIN IT. Actually, come to think of it, the market seems contained on almost a daily basis. We made new highs yesterday on a .09 move. Yep, you heard me, .09 points.  2399.38 vs a close on Friday of 2399.29. Wow, can you feel the thunder? Can you imagine what the market is going to look like in 10 years when half the world is sitting in Index Funds? “Today the S&P500 moved 0.1% in its largest daily move in months. Traders were heard to be shocked it actually opened for trading and didn’t know what to do when three buy orders came in. In other news President Dwayne Johnson dedicated the USS Jabroni in a ceremony held at Newport News Shipyard in Virginia”. Volatility is low, yes, we get it. Does that mean anything? Barry says no and I kinda agree with him. There just aren’t a lot of catalysts right now so the market is going sideways. Boo hoo, it happens, even roller coasters have boring parts. But while the overall market seems stuck in the mud there are COUNTLESS stocks having incredible years. Apple is up 33%. Apple. The world’s largest stock is up 33%, the kind of return you see when a Mid cap industrial name that barely anyone knows about happens to have a great year.  An $800B mkt cap stock that literally everyone knows everything about is up 33%. In fact, 40% of $SPX returns this year have come from just 8 stocks. Have you heard of any of these? AAPL, FB, AMZN, MSFT, GOOG(L), PM, HD, and V. Blows my mind. I mean aren’t we supposed to bet against consensus? Do you know what the best performing style is YTD? “High Analyst Rating”. i.e. the stocks that have the most buy ratings on them. I mean when does that ever happen? Now I guess. 

After the open the S&P spent a whole 99 minutes above unchanged but apparently the siren song was too great and by 11:18am ET we were right back home with momma, unch, flat, nowhere. The Nasdaq don’t fall for this nonsense though, it was up nicely on the back of MAR, AAL, TSLA, and AAPL. Wayfair…what do we know about Wayfair? (Baird rates neutral) I ordered two $220 Adirondack chairs made out of that “manufactured wood” stuff last month so I guess I’m responsible for its 20% gain today. Actually they reported earnings, upped guidance and 38% of the float is short so yea, it’s probably that and not me. How do we feel about “manufactured wood”? I’m torn, obviously it’s cheaper than real wood but there’s something off about it. I guess you get what you pay for. Losers were SEE, TGNA, IFF, TDG, and XRAY. Hey you know what else is a huge winner that people said was going to zero? Bitcoin. Bitcoin is clocking in at $1,700 per byte or block or coin whatever people call them. I actually own one….can you believe that? I bought it on a whim back in 2013 so if you need to find me in 20 years I’ll be on my boat titled “Who Knew” docked at a harbor in Naples. By lunch we were going nowhere fast with all the normal trends of my life persisting: sideways SPX, grinding higher NDX, plummeting VIX, and little to no…actually forget it.

The last half of the day saw a gigantic 30bps selloff in which people questioned the very nature of stocks and why we hold them. 30bps…it was like that Armageddon movie without Bruce Willis. Unfortunately the market rallied in the last 15 minutes so I can’t make this molehill any bigger.   So yea, sitting just shy of new all time highs with the VIX stubbornly low. Take a look at this chart from Gluskin and remember that when the VIX is this low, returns are usually muted going forward.  Do we need some kind of selloff to break out of this sideways funk? Absolutely. Will we get it? Sure, but not a human on the planet knows when. Until then we keep on keeping on because there’s more to life than staring at sideways stock indices.  

Final Score:  Dow -17bps, S&P500 -10bps, Nasdaq +29bps, Rus2k +2bps. 

News Highlights:

Well I found us a fail link tonight because when you google “worst wall flip ever” this video comes up.  Seriously that guy was bad.

Have a good night