May 15, 2021 We are pleased to be back this week with a new edition of 5 Things. From the start, 5 Things has been a collaborative effort between Michael Cannivet and Ed Flores. Ed is a former colleague from Fisher Investments who now runs his own company, Hyde & Union Content. Ed has had a lot going on lately...
Buy low, sell high. It sounds so simple, right? Selling “high” (whatever that means exactly) is tricky to execute, though. Recently, the stock market has been on a tear. The S&P 500 index rose 5% in April with record-setting breadth. Over the course of 18 trading sessions this month, 95% or more of the S&P 500’s members traded above their...
When he passed away last week, Bernie Madoff still had 139 years left on his prison sentence. Anyone over the age of 30 remembers the story—Madoff swindled thousands of investors for billions of dollars, running one of the most elaborate Ponzi schemes in history. In an ideal world, Madoff’s conviction would have been the ultimate deterrent for fraudsters, purging the...
One of the greatest quarterbacks of all time, Drew Brees, recently announced his retirement from the NFL. Brees is retiring with one Superbowl win, nearly a dozen passing records and a red carpet to the Hall of Fame. But 20 years ago, forecasts for his success were mixed at best. A pre-draft scouting report said Brees “would not come anywhere...
This week, $400 billion in direct stimulus payments began flowing into the bank accounts of US households, courtesy of the American Rescue Plan. The Treasury says $262 billion has already been dispersed with the remainder scheduled to go out in the coming weeks. Any investor must wonder: where will this money go next? “Stimulus checks could accelerate the large inflows...
March 13, 2021 The S&P 500 rose 2.7% this week while bonds continued to selloff. The 10-year treasury yield climbed past 1.6%, breaking above a key technical resistance level. The biggest news this week was President Biden signing the $1.9 trillion American Rescue Plan, which was passed along party lines. All told, the government has spent nearly $5 trillion in...
March 6, 2021 The S&P 500 rose +0.8% this week while the bond market selloff continued. The yield on the 10-year U.S. Treasury bond rose to 1.56% from 1.45%. As in previous weeks, rising treasury yields triggered selling pressure in pockets of the equity market, particularly weighing on the highest valuation names. It’s not that the market is worried about...
“Take nothing on its looks, take everything on evidence. There is no better rule.” - Charles Dickens, Great Expectations In March 2018, I wrote an article for RCM about why I thought the Trump Administration’s steel tariffs would eventually backfire. My argument struck some readers as odd, but it was based on empiricism. Trade wars, tariffs, or any other policy...
February 20, 2021 February's equity rally cooled off a bit with the S&P 500 shedding 0.7% this week. The index remains up 5.3% month-to-date though, and energy and bank shares extended their best monthly gains since November. Interest rates jumped as bonds sold off, which we discuss more below. The breakneck rally in copper shows no sign of abating. The...
If energy stocks are heavily shorted, does that spell opportunity? So far in 2021, WTI crude oil is up 22% and the Energy Sector SPDR ETF (XLE) has gained 18%—both outpacing the S&P 500’s 4.9% return. However, investor positioning shows most investors are not capitalizing on energy’s recent outperformance. Short Bias Toward Energy Stocks According to JPMorgan quant guru, Marko...
February 13, 2021 The S&P 500 rose 1.3% this week as treasury yields dipped slightly. It was a relatively quiet week on Wall Street. A closer look, however, reveals a trading frenzy showing few signs of abating. An average of 15.8 billion shares have traded daily over the past three weeks, which is just shy of the 16.1 billion daily...
February 7, 2021 The S&P 500 index rose over 4% this week, gaining the most since November. U.S. employers opened the new year by adding 49,000 jobs in January, a welcomed improvement following sharp declines in December. The U.S. economy is still 9.9 million jobs shy of where it was in February 2020. Many jobs will return with mass immunization...