The Dog Days Descend Upon Us
Equities start the day lower as the dog days descend upon us. Late August…what’s there to say about markets in late August? What’s there to say about markets in Late August that are going sideways? What’s there to say about markets in Late August that are going sideways and have been so since last November? Well, let’s try to say something otherwise this is just a glorified Youtube blog. Led Zeppelin wrote a wonderful diddy called “The Song Remains the Same” and that’s what we’re going thru right now. Macro data is junk, oil is a trainwreck, China is so slow that they can’t even hide it anymore, and valuations are thick so we can’t rally. That being said, pessimism remains high (check out this article in Bloomberg today), the US is still the only place with growth, and 2,050 refuses to be broken so we can’t sell off. All that remains is the Fed and we FINALLY have a meeting in play. Sep 17, the first time in forever where interest rates might actually move, has become our only catalyst on the horizon. But it has been thus for weeks, even months. The song has been the same since we turned the calendar and it will remain the same until something happens with Janet’s crew. Buckle up….because it’s gonna be a….wait…. actually you don’t need to buckle up, the next few weeks are going to be a death march.
After the open we saw the kind of price action you’d expect from late summer markets. A sharp selloff (on nothing) immediately followed by a sharp rally (on nothing). Thin markets? Check. Easy to push around? Check. Everyone dreaming of the last few weeks on the beach? Check. No macro data? Check. Ok, I guess there were two small data points in Empire Manufacturing and the NAHB housing index but those are B levels releases, on a busy day they typically get lost in the background. We saw all kinds of short covering moves, names like CMCSA, DISCA, CHK, YUM, and even AAPL were up big. AAPL short covering? Probably, the stock has spent quite a few weeks in the shed. ZU rose 50% after agreeing to be acquired for $18.75 a share. I love that company name so much. EL was the biggest dog falling 6.5% after earnings. You know what they blamed right? Yep, currency, the new catch all for “our sales were weak”. Other losers were CVX, HAL, NBL, and NFX (energy still can’t catch a break). I wanted to save this link for my news highlight but it’s just so juicy that I have to put it in here. The NYT wrote some kind of massive AMZN hit job today (click here to read it) and it makes the place sound like a giant career MMA match: At Amazon, workers are encouraged to tear apart one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by text messages asking why they were not answered), and held to standards that the company boasts are “unreasonably high.” The internal phone directory instructs colleagues on how to send secret feedback to one another’s bosses. Employees say it is frequently used to sabotage others. (The tool offers sample texts, including this: “I felt concerned about his inflexibility and openly complaining about minor tasks.”). I wonder what the point of this article was? Why now? It’s a brutal attack on the culture of an American Titan.
The rest of the day was sideways (get used to it) and we closed at 2,102, up 50bps. Stop me if you’ve heard this before but we are right….back…in….the….middle….of….the….range. But hey, at least we’re back above the 50 and the 200day. So did you enjoy your Monday? I hope you did, just because it’s Monday doesn’t mean you can’t have a great day. It’s sunny, we’re alive, summer winds are blowing, your family loves you, and the market closed higher. Go for a walk, hug a kid, kiss your dog, all is well in the world.
Final Score: Dow +39bps, S&P500 +52bps, Nasdaq +86bps, Rus2k +102bps
- Succinct Summation of the Day’s Events: Some B level macro data and aimless trading. Ended up higher because that’s what the Market God’s felt like today.
- Here are this season’s biggest earnings winners. What were the top 10? SFG / TREE / EGL / FTK / USNA / YDLE / W / ASPS / STMP / STRA
- Are the best returns behind us? I hate the phrase “the easy money has been made,” because investing is never easy. Just go back and look at some of the headlines and fear-mongering that’s been going on during this recovery. It was never easy no matter what the data says. But if you have a U.S.-centric portfolio that’s heavily allocated to stocks and bonds it’s likely you just lived through one of the lowest risk periods ever to invest in — from a textbook perspective.
- Goldman brings us 4 reasons why the stock market is going nowhere: "Flat is the new up," Goldman Sachs says. The team of analysts led by David Kostin are telling clients that they still don't think the stock market will do much through the end of 2015.
- Cool article on the Verge today looking at the future of Disney / Marvel / Star Wars. I love this fake headline from 2040: Disney acquires Warner Bros. and DC Comics, announces plans to reboot Marvel and DC as singular universe. Yes please!! Make that happen in real life!
- I guarantee you make these after seeing the picture
- I didn’t know this little factoid on the Rus2k and I wish I could forget it: Francis Gannon, co-chief investment officer at Royce Funds, which specializes in small-cap stocks, also thinks we are at an inflection point. The upside-down market — where untested companies’ shares vastly outperform those of more solid companies — may be in the process of righting itself, he said. Mr. Gannon noted that fully one-third of the companies in the Russell 2000 stock index do not earn any profits, the highest percentage in a non-recessionary period.
- I figured we needed a golf link after that awesome PGA at Whistling Straits. I would absolutely do this if I played in a tournament. I have no doubt at all.
- What’s it like to travel first class on one of the best airlines in the world? Ridiculously nice.
- People actually win at this?
- I will actually be here this week! Can you believe it! A picture of a place I’m going (I’ve actually hiked to the top of it once already)
So here’s a quick rule to live by in life. Never go down a water slide in some rundown, beatup, 3rd rate water park. Ever. This guy must be in the hospital…still….even though this video is from 2012.
Have a good night.