One of the greatest weeks of the year….Thanksgiving!
Equities start the day lower on one of the greatest weeks of the year….Thanksgiving! Yep, that’s right everyone, I’m back. I mean if you’re gonna start writing again why not write during a week when no one opens email and all they care about is whether the gravy is homemade. Where did I go? Well, I decided to take a job working PR for celebrities in L.A. because I wanted to be in the bigtime. How did that work out? Yea…ummmmm….looks like writing market blogs and giving speeches is the better career choice. I come back to you now at the turn of the tide, we have all of 27 settlement days left in the year for so much to happen. 27. Talk about the shot clock winding down. You know how many legislative days are left in the year? 15. 15 days for the most dysfunctional body since the UN to reform a tax code that’s something stupid like 18,000 pages long. Good luck everyone, I hope your bull thesis doesn’t revolve around a bunch of people who literally don’t care about you. Anyway, last week featured a 1.1% selloff driven by high yield jitters and curve flattening that, if you read Fintwit or blogs or the media, felt like the crash of ’87. We’ve gone up for so long that literally anything that MIGHT be a reason to sell is given Titanic coverage. Curve flattening? Sure, I get it, it’s a very reliable recession indicator, but we have a long way to go until this thing hits zero. I’ll get worried when 1) the curve flattens to zero 2) weekly claims starts rising 3) auto sales keel over 4) new home sales decline and 5) Let’s enjoy our holiday week, make real stuffing and real mashed potatoes, then come back and reassess whether Santa get us to +20% on the year. Ho Ho Ho, who wouldn’t want that?
After the open we got a nice, slow, grinding higher market that threatened to make mincemeat out of recently turned Bears. Volumes a whopping 19% below a 30 day average and if you think it’s going to get any busier later this week you’re nuts. Get your trading in now because Wednesday and Friday are going to be dire. Only one data point in Leading Index (check my news highlights for more there) and no Fed speak so I guess we have to talk movers and shakers? SQ ripped 2.5% after saying they may allow Bitcoin trading in their app. I really should write a Bitcoin speech, especially now that it’s trading around $8200. Is there a single reliable expert on Bitcoin in the world? Probably not, so there’s room for me to jump in and make waves! CAVM rose 10% as rival Marvell said they’d buy them for $6B. How many chipmakers are going to be left by the end of the decade, 3? Other winners DLPH, WYNN, AMAT, and MU. Losers were INCY, CAH, PDCO, MCK, and GE because it was open for trading. Has there been a bigger fall from grace than GE over the past year? This one will put to test my theory about “Great American Companies” not going quietly into that good night (WMT, MCD other examples). Lotta things for them to fix but I’m sure super smart people are looking at it daily. Anyway, by lunch we were trading on the highs, 2,582, up a rocking 16bps. Hey, dear reader, I need you to weigh in here: when it is appropriate to cook just a turkey breast and not the whole turkey? Is that “mailing it in” or a proper use of capital market efficiency? (dark meat sucks)
The rest of the day was quiet except for the last 30 mins when it was announced ATT may face an anti-trust lawsuit over its TWX acquisition. Hmmm….super “business friendly” right? (honestly, is this all over CNN? Please tell me it’s not). The tape got hit for a little but most of that was just a knee jerk reaction to a giant M&A deal being threatened. We closed at 2,582 up 13bps, which isn’t bad for a slow Monday. Look, there’s always going to be reasons to sell the market, whether they be indicators or something having a “4 standard deviation move” or someone yelling “SELL” but in the end all you can do is have a plan and stick to it. High Yield got you down? Hindenburg Omens making you nervous? Please,…. turn off the media and spend more time with the family. Final Score: Dow +31bps, S&P500 +13bps, Nasdaq +12bps, Rus2k +71bps.
Volume was low. Our desk was better to buy. News Highlights:
- Succinct Summation of the Day’s Events: Holiday week kicked off with a “I shouldn’t have sold because I worried about High Yield and Curve flatteners” rally. They do sound like fancy reasons to sell though right?
- So many chart crimes in here, I think I’ve actually done the first one way too many times. “I’m expecting this to resolve in an explosive fashion, one way or the other.” Technical analysis on economic charts. Just don’t.
- Don’t let politics hurt your investments please: “The bottom line is that corporate America is going to innovate and maximize profits regardless of whether there’s a Republican or a Democrat leading our government. While politicians are important we shouldn’t build portfolios based on our political biases. All that does is cloud our judgement and lead us to make irrational decisions driven by short-term political biases.”
- Leading indicators TLDR: Still ok
- Wait….wait….preppers are starting to buy Bitcoin instead of Gold? “Across the North American countryside, preppers like McElroy are storing more and more of their wealth in invisible wallets in cyberspace instead of stockpiling gold bars and coins in their bunkers and basement safes” So let me get this straight, after Mad Max Beyond Thunderdome happens these guys are going to log in to their crypto accounts and cash out their millions? With what internet / power / app exactly?
- Rule #1 in college, never trust your drunk buddies
- Good luck on resale pal
- This bird listens to Rage Against the Machine
- You want a new Thanksgiving side? How about truffled potato gratin? Oh my…
Tonight we’ll end with a look at why America is such a great country. We have people willing to test their limits in death defying dives to show the world how brave we are!
Have a great night