Mile Marker 3,000

Equities start the day higher as we continue to flirt with S&P 3,000.   Man, I remember S&P 2,000 like it was yesterday, I was a budding young trader for Baird travelling to London saying things like “I’ll meet you in Lei chester square” and “geez there’s a lot of warm beer here”.   Is the fact that we’ve reached 3,000 important?  Is it some kind of major milestone?  Nope, not at all.  In fact there’s really nothing special about it, it’s just another road sign on your highway to retirement.  As we know, life is a highway, I wanna ride it allll night looooooong (is that song good?  I feel like it is).   Let’s stick with the highway metaphor for a second:  there’s nothing to say S&P 3,000 is about to be put in our rear view mirror.  We might be here for awhile, in fact when the S&P hit 1,000 in 1998 it revisited it multiple times and only put it into the rear view mirror in 2009.   2009!!!    The highways twists and turns but over the long run it goes from the SW to the NE.  You have no control over the other drivers, most of the time we’re all going 55 in the same direction but there will be days and weeks where it looks like a Mad Max movie.  You can always get off the road, there’s nothing stopping you from taking the next exit, but it can be really hard to get back on.  You should constantly be filling up your car because increasing the amount of gas in the tank is a key to success.  So wave to the 3,000 sign, tell the kids in the backseat to quit fighting, eat another bite of that beef jerky you bought at the gas station (always buy beef jerky when you fill up), and enjoy this moment because none of us knows what lies over the horizon.

After the open we flirted with 3,000 for most of the morning as we listened to day 2 of JPow’s testimony in front of Congress.  Here’s what you need to have an opinion on right now:  Is this upcoming rate cut in July just an “insurance” cut to ward of a cyclical slowdown or is it the start of a rate cut cycle because those are two different things.  That being said, my man @ryandetrick posted this nugget: “can the Fed really cut rates with stocks at new highs?  Going back to 1980, they've done it 17 times (SPX within 2% of new highs).  A year later? The S&P 500 was higher all 17 times”  Look at that chart…my God.   Hey, you know who reported earnings last night and traded lower?  Bed Bath and Beyond.  A company that sells 48 kinds of trash cans and competes with basically everybody is down 86% since 2015.  Yikes.   Other losers were IRM, guess the iron got melted, down 7% and FAST, which you hate to see because its an industrial distributor, down 3.5%.   Winners were CI, UNH, NVDA, and CVS.   

We finished the day at 2,999.91…I mean….to quote John McEnroe….YOU CANNOT BE SERIOUS.    Let’s try and make this super simple shall we:   We finally broke a year and a half of sideways action, the Fed is dovish, and the trend is higher (200 day is upward sloping).  So it’s a breakout, for now, and we like to let breakouts run.  Now this assume the upcoming earnings season doesn’t derail it, which it might, so stay tuned because I’m guessing the highway has a few potholes ahead.

News Highlights:

So you may have already seen this video on Twitter or on the internet but I love it.  This little ping pongin’ master is my spirit animal.  Makes me smile every time I watch it.  This is me fighting back against people who are pessimistic in life.

Have a good night