Closing In On The Highs
Equities start the day higher as a mouseload of news hits the tape! I don’t normally do a Friday recap because 1) I feel like no one wants to read market content on Fridays and 2) after people drink one of the 4 Ms they just delete my email before opening it. BUT I’m inspired to write because one of my favorite companies, Disney, announced their streaming service last night! For $6.99 a month, less than the cost of a light beer in NYC, you are gonna get every Disney movie, plus the Simpsons, plus original content, plus much much more. Wait…Mr BullandBaird..coveter of all things fleece….did you say $6.99 a month because Netflix charges me $9 a month for one screen? Yep…begun the streaming price wars have (Disney will lose a projected $3.9 billion on streaming this year, and nearly $5 billion next year. A huge investment). I mean if you have kids is there any way on God’s green Earth you aren’t waiving this thing in? Please. It might be the final nail in the coffin for cable bundles, why would anyone still be using those? JPM reported last night and beat expectations. I’ve said it before but we need Financials to pull their weight here and the house of Dimon beating is a good start. Finally, Chevron acquired Anadarko Petroleum boosting sentiment in the Energy space. This is a $33B deal and it’s refreshing to see because it makes me think animal spirits are still alive and well. Media, Financials, Energy, a slew of positive market catalysts this morning put futures just shy of their all-time highs. Let’s see if they close there.
After the open the S&P500 Total Return Index hit a new all-time high. That might be a hipster index (most people just default to the plain vanilla S&P500) but it’s real and it did break its old high. Disney soared 11.5%, JPM gained 4.6%, and APC rose 32% so all those events I mentioned earlier helped push the tape higher. Now look, I want you to remember something as we approach the old highs. All of this doesn’t mean things can’t go wrong, that we’re “in the clear” and the World is peachy. Things can always go wrong and when they do they shock everyone in the process. In fact, if we wanted to be honest with ourselves, long term returns in the stock market aren’t great when unemployment is this low. But news has been getting better at the margin in China and in Europe, the US economy continues to chug along, the Fed is friendly, and if earnings aren’t as bad as people think then we continue to climb the proverbial wall of worry. We want that wall…you NEED ME ON THAT WALL. By lunch were drifting around, but of the highs, 2,904 up 0.5%
The rest of the day didn’t bring much new other than that trailer so let’s wrap up because no one wants to read 800 words on a Friday. We closed at 2,907, less than 1% away from a new record high. Earnings season is just getting started, we have a long way to go, so I won’t make any broad statements with only 29 S&P companies having reported (rare for me). I say this all the time but in the short term markets trade on better or worse and things have indeed been getting better. If that continues then maybe we rip thru these old highs and never look back. But optimism is rising, if you start to see fund flows turn sharply positive that could also be troubling. We don’t want to see euphoria break out that’s the worst case scenario right now.
Hey…I’d be remiss if I didn’t mention Game of Thrones this Sunday! Can’t wait!! One of our unbelievably talented Client Specialists Kristin S shot me this link (shout out to your boy Tom too) that you NEED to catch up on. Hey Kristin and Tom…send me more links...you rock.
I only have one video tonight because it needs to stand alone. I hate when people get caught up in the nonsense that “things are hard right now, everything seems so bad, I’m worried about where things are going”. Look, there’s always a reason to worry, ALWAYS, but I think optimism needs to be your default setting. Humanity is an incredible thing; we’ve come so far in such a short period of time. Look at what we are doing right now. Look at this video and the one from last year. You live in extraordinary times and I want you to cherish it. The future is incredibly bright and I’m so happy to be alive at this moment in history talking with you. I can’t wait to see what happens next!