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All 3 Indexes Lower - Weekly Market Notes September 21, 2020
The Dow Jones Industrial Average lost 0.3%. The S&P 500 fell 0.64% while the NASDAQ Composite fell 1.16%.Central banks have taken extraordinary measures to provide liquidity to the markets over the past six months.The technology sector will continue to benefit from the growing trends in internet retail, education, entertainment, medicine and work.
Seekingalpha · 40m ago
Greater Inflation Risks Ahead
Three new forces are set to lift inflation beyond what markets are currently expecting in the years ahead, reversing a decade of subdued price rises.Market volatility has returned after months of steady advances in risk assets, and could stay elevated as the U.S. election draws near.Markets will focus on a slew of purchasing managers’ index data this week to gauge the latest business sentiment.
Seekingalpha · 2h ago
It Takes Two Hands To Build A Recovery
This is a weekly series focused on analyzing the previous week’s economic data releases.The objective is to concentrate on leading indicators of economic activity to determine whether the economy is strengthening or weakening, and the rate of inflation is increasing or decreasing.This week I’ll examine industrial production, retail sales, initial jobless claims, and consumer sentiment.
Seekingalpha · 8h ago
EPS Revisions Flashing An Amber Warning
The decisive rebound in the EPS revision cycle from the pandemic lows in June has provided much of the firepower behind this summer's risk rally.The downtrend in 2020 EPS forecasts appears to have bottomed, while 2021 numbers have swung higher.With hopes for a robust EPS recovery next year still riding high, any further deterioration or a negative turn in the revision cycle could create headwinds for markets.
Seekingalpha · 9h ago
So Far, This Feels Like A Disciplined Move Lower (Technically Speaking For 9/21)
There was a huge inflow into the SPY last week while money left the QQQ.The Chicago Fed's National Activity Index shows an expansion in August.The bears come out of the woods to start the week.
Seekingalpha · 9h ago
If You Want To Retire In 10 Years, Spend 2020 Buying Stocks
Expect more down days and volatility in the stock market.We have no control over downside, however, we have complete control over how we react.If the long-term stories of the stocks you own remain intact, we're at the beginning of what might one of the biggest buying opportunities we've seen in a while.Many investors panicked in mid-March. Be patient, but be ready to buy. Don't make the same mistake twice.
Seekingalpha · 11h ago
The Tides Have Turned As Stocks Continue To Sink
The S&P 500 is breaking key level of technical support.Typically, when the market's technicals break, we turn to fundamentals.The problem - stocks need to fall as much as 15% more to find fair value.
Seekingalpha · 13h ago
The Fed's New, Looser Policy On Inflation: It Will Steepen The Yield Curves, With The Back End Rising The Most
The Fed recently revised its monetary policy strategy, replacing 2% price inflation targeting, adopted in 2012, with a new approach in which the Fed targets an average inflation rate instead.The reaction to the new policy was mixed. We see adverse comments as misguided and not attuned to recent economic developments in the US and around the world.It's been decades since we saw inflation stay above 2% for long. To assume that the “punch bowl” would be taken away soon on an overheating (economic) party is laughable.The fear of traditionalists is that if inflation trends upward, delaying palliative measure for so long would risk inflation expectations unmoored and sets off an uncontrollable inflationary spiral. This argument appeals to what happened in the 1970s.The Fed, to put it mildly, is desperate to see some sustained inflation, doing whatever it does in an economic system. We therefore expect steepening yield curves, higher interest rates and bond yields in the intermediate future as consequence of this new Fed policy.
Seekingalpha · 16h ago
No S&P 500 Sector Has A Rising ROIC Through First Half 2020
ROIC for the S&P 500 began to decline in 2019 before falling significantly this year.The Consumer Non-Cyclicals sector is the least impacted by the COVID-19 pandemic, as measured by change in ROIC, since the end of 2019.All S&P 500 sectors saw a drop in ROIC, though some more than others, as we’ll show below.
Seekingalpha · 16h ago
Risk Off
The Fed has fueled this rally, and looks to not have a handle on what they are doing.Conditions have changed, significantly – lumber is extremely important.Several warning signs are flashing red right now. We may be on the edge of a risk-off period.
Seekingalpha · 17h ago
The Pre-Election Correction Continues, Is It Over?
On Friday, due to the "quad-witching options expiration" (when all options contracts for the current strike month expire and rollover), the market gave up support at the 50-dma.The markets are very oversold short term, so a tradeable "bounce" remains very likely in the next few days.While you may feel strongly about one party or the other when it comes to politics, it doesn't matter much when it comes to your money.Holding a little extra cash, increasing positioning in Treasury bonds, and adding some "value" to your portfolio will help reduce the risk of a sharp decline in the months ahead.
Seekingalpha · 17h ago
Election Year Seasonal Effects And Low Interest Rates Support Stocks
In early-September, the S&P 500 Index began what now appears to be an abrupt risk-shedding event, centered on the high-flying growth and technology stocks.We don't pretend to know for certain whether the selloff is over, it'll continue or how much additional downside is in store. However, we developed a new breadth indicator for gauging technical extremes in stocks.What was the catalyst for the recent turbulence? More importantly, should investors sell everything and wait to re-invest until after the US presidential election?
Seekingalpha · 18h ago
Weekly Commentary: Revisiting 'Coin In The Fuse Box'
Powell is struggling to reinforce flagging Federal Reserve credibility.In the 1960s, Alan Greenspan was said to have commented the Great Depression was a consequence of the Fed having repeatedly placed "Coins in the Fuse Box".Is all the hullabaloo really about consumer inflation fractionally below target? And will this be viewed as reasonable by the average American?
Seekingalpha · 19h ago
Inflation Is Coming: How It Plays Out
The Federal Reserve has made an explicit commitment to a set inflation goal, and that will raise your cost of living.We analyze the big picture and provide our readers some food for thought.Inflation will knock on our doors sooner than most think.We also suggest the best hedge for our members.
Seekingalpha · 19h ago
Dull Economic Conditions With Infections Climbing Position The Market For An Overdue Correction
Coronavirus cases are climbing at a renewed rate around the world.Unemployment remains more than twice the prior year's level, and the increases in employment are slowing.Consumer confidence remains abysmal and continues to drop.Trade tensions with China have reignited between many countries.In spite of all this economic bad news, market indexes are near all-time highs, a level unsustainable given the reality.
Seekingalpha · 19h ago
Rational Exuberance? Explaining Global Equity Market Gains
Aggressive central bank purchases of government bonds in the US, Europe, Japan and the UK allow governments to issue more debt and suppress the cost of that debt, which has a very powerful effect.Perhaps the new adage should be, "Don't fight the Fed and the Treasury."China is shifting towards a slower but more sustainable growth model, which should reduce global demand for commodities.
Seekingalpha · 20h ago
A Few Charts And Thoughts On The Election
A few days ago the Census Bureau released its calculation of Median Household Income for 2019. This measure of prosperity increased at a historically significant rate.Biden's agenda is anti-growth and anti-business, in the belief that addressing income inequality, social justice, and global warming are paramount.When interest rates are super-low, it pays to borrow, and it pays to buy almost anything that will eventually benefit from renewed growth and-possibly-higher inflation.From my supply-side perspective, the most important things to watch are confidence, employment, investment, and incentives to work and invest, all of which drive supply.
Seekingalpha · 21h ago
Weekly S&P 500 ChartStorm - Tactics And Themes
The S&P 500 is on notice as the 50-day moving average has been breached and sentiment rolls over from bullish extremes.Given where some of the tactical indicators usually end up (down) during a correction, it looks like we could have further to go on this one.Meanwhile, there is a clear air of froth with a hot IPO market.Yet, promisingly, forward earnings have been turning up on both a near-term and longer-term basis.Cautious short term, optimistic medium/longer term.
Seekingalpha · 23h ago
November 3 - The Gunfight At The O.K. Corral
America is being presented with two very stark choices for the country's future and the markets, the closer we get to the election, may become very volatile and quite unruly.In normal times, there would be a push out of equities and into bonds as the "safe haven" play.However, we are not in normal times.
Seekingalpha · 1d ago
Market Risks Remain High As Investors Pile Into Technology
Indices have started faltering after a one-directional rally.Fear gauges are incredibly muted.Investors are piling into technology even as the indices pull back.Value might be ready to have its moment.
Seekingalpha · 1d ago