Slowest Week of the Year Drags On
Equities start the day lower as the slowest week of the year drags on. So I showed up today in my #BananaRepublic shirt and #Dockers khakis and #KennethCole loafers to entertain you fine people with market related tidbits and pop culture references but I’ll admit, it’s a struggle right now. We had a nice day yesterday but that felt more like an oversold bounce than anything meaningful. The market remains in an uptrend so let’s not treat every 2% selloff like it’s some kind of game changer (MS put out a report yesterday saying “the correction may be over”. Since when is a 2% move a correction?). Volumes have been, shall we say, anemic this week. Both Monday and Tuesday produced 5.3B share days in a year where the avg session chunks out 6.6B so yes, everyone is still at the beach. Last night Trump threatened a government shutdown unless we build that wall he’s been talking so much about but I have news for you (and it isn’t fake): cooler heads always prevail. Remember that whole “debt ceiling” fiasco from a few years ago? Yea, that one was a fantastic buying opportunity. Look….politics is a whole lotta bluster that ends with normal decisions being made. I’m fairly certain a government shutdown over a fence isn’t the end of the Bull Market, just like nuclear war wasn’t and Ebola wasn’t and the election last year wasn’t. It’s noisy right now, like when your kid decides to play Despacito for the 856th time, tune it out or ban them from Spotify like I did. Anyway, let’s move on to the next section so I can make fun of retail stocks.
After the open we all looked around for a concrete reason why the mkt was trading lower but couldn’t find anything that made sense. New home sales weak? Sure, but that’s not enough. Political jawboning? Sure, but that changes by the minute. Industrials weak? Sure, but they have been for a while now. Random market movement based on historical trends and near term projections about earnings and economic data mixed with ever changing sentiment? Sure, but how boring is that? A’int nobody got time for that nonsense. Ok, why was the market lower then? Because we bounced so hard yesterday. There, that’s it. Up 1% on low volume invites people to sell and hit SBUX for a sweet cream cold brew (my God they are so good). Consumer Discretionary was the weakest sector but water is wet and the sky is blue. LOW fell 4% after earnings while AAP and AZO continued to break down (see what I did there?). CMG joined the misery falling 2.5% to $297. Boy…when burrito stocks fall they fall hard huh? There was one bright spot in retail land, AEO rose 7% after reporting earnings so I guess teens are still shopping somewhere right? So yea, we spent most of the first half trading lower with most people blaming the usual suspects. By the way, this is likely my last recap ever because I’ll be cashing a $700mm check tomorrow morning. What’s the first thing I’d buy with the money? This.
The rest of the day was aimless price action and a close at 2,444, down 34bps. Let’s see what all the central bankers of the world have to say tomorrow because they very well may put a definitive end to the “easy money” era. I can actually see them standing there in front of those gorgeous mountains, bathed in a crimson pink sunset reading off a press release that says: “nah nah nah nah…nah nah nah nah…hey hey hey…good bye”
Final Score: Dow -40bps, S&P500 -35bps, Nasdaq -30bps, Rus2k -13bps
- Succinct summation of the day’s events: Still treading water before the Jackson Hole pow wow on Thursday
- Guess what…it is different this time: “The average CAPE since 1871 is 16.7, but if we take the average from 1960 it jumps to 20, and from 1980 the average is 21.7. The current reading of 30 is elevated when looking at each of these averages, but the question for investors becomes: Which long-term average is the most representative of today’s markets? Fifty years ago, retail investors accounted for more than 90 percent of all New York Stock Exchange trading volume. Today, 95 percent of trading is performed by professional investors. In 1957, the S&P 500 consisted of 425 industrial stocks, 60 utilities and 15 railroads. Financial stocks were not added to the index until the 1970s. Until 1988, the composition of the S&P 500 was 400 industrial stocks, 40 utilities, 40 financials and 20 transportation stocks.”
- Dr Ed’s “simple model” just works: “Is the Yardeni ‘fundamental stock indicator’ confirming the bears’ thesis that it is time to exit stocks? Well, let’s have a look at the indicator over a long time frame to get a feel for how it has performed in the past.”
- JC says “be selfish when it comes to markets” Are there more important things than money? Yes! Of course. But in the market, NO, there are NOT more important things. In fact, there are NO other things. The only reason to be invested in any market is for the sole purpose of profiting. Period. If there is any other reason at all why you’re in the market, I think you’re very very confused.
- Game of Thrones Fantasy Football team names. I love “Maesters of the Midways”
- There are so many people I wish had this app: after getting annoyed with his son ignoring his texts. The app finds an interesting way to solve the problem. Basically, the app locks the phone by taking over the screen and sounding an alarm.
- Can we get this across the Thames?
- I just wanna see the video of how they got there
- Listen….listen….the weather app you use sucks. Go get this one, it’s awesome and it insults you while it tells you the weather. I fell in love instantly.
- Things Michael should’ve invented #457. Seriously why aren’t they all like this?
- You know its windy when an entire apartment complex blows away
- Do you know even ONE PERSON who owns a Google Home? I don’t
Hey who wants a Fail video? I do, you do, we all do!
Have a good night