Most valuation metrics in US equities are stretched. This at a time when the Fed is tightening. Depending on how inflation behaves in the months and quarters ahead and how monetary policy evolves, unwinding of overbought conditions can cause pain. … Continued
This market wants to rally. Plain and simple. In a seasonally favorable period, Friday’s red-hot CPI report was embraced by equity bulls. The S&P 500 is itching to break out. If Powell on Wednesday sounds more hawkish that currently priced … Continued
The S&P 500 is probably headed for a test of the 50-day, which is merely 1.5 percent away. Should the average be breached, it will have come at a seasonally tough period and at a time when earnings look very … Continued
Last week, the FOMC slightly tilted hawkish. Repercussions were felt across assets. Then early this week, dovish members were out in full force, pacifying investors that monetary morphine is here to stay; major equity indices are back at/near their highs. … Continued
The S&P 500 closed 2020 with a new high. Momentum was very strong in November and December. In the past, more gains followed in the following year. For that, several things have to fall into place, including how flows, margin … Continued
Small-caps and tech continue to diverge. Post-vaccine news, longs are gravitating toward the former and leaving the latter. Amidst this, signs of fatigue are also showing up on the S&P 500, while VIX acts like it wants to rally. The … Continued
Last Thursday’s sizable drop in major US equity indices was sudden. Several metrics were so deep into overbought territory the decline probably did not come as a surprise to many. The magnitude of it was. Indices have rallied in the … Continued
Elevated multiples have not bothered equity bulls. In recent months, the Fed too has come to their aid. Investor optimism is dangerously elevated going into the 4Q19 earnings season. The 4Q19 earnings season kicks off this week. Banks and brokers … Continued
Eight years old! The bull market in U.S. equities, that is. After a harrowing 57-percent collapse that began in October 2007, the S&P 500 large cap index bottomed at an intraday low of 666.79 on March 6, 2009. Tuesday, it … Continued
Stocks keep making new highs, and earnings keep getting downwardly revised. That about sums up the current state of affairs in U.S. equities. With momentum as strong as it is, markets have turned a blind eye to multiples. Consequently, the … Continued