Stocks & Equities

The stock market is ‘insanely disconnected’

Posted by Shawn Langlois

on Friday, 19 June 2020 5:38

Those betting against this “absurdly overvalued” stock market are about to get paid, if Kevin Smith, Crescat Capital’s chief investment officer, has it right in his gloomy assessment.

“Markets driven by euphoria never end well,” he explained in a note to clients this week. “The U.S. stock market today is in la-la land. It is discounting a new expansion phase of the economy at the same time as a major recession has only just begun.”

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Can Tesla’s Stock Maintain The Magic $1,000 Level?

Posted by Tyree Gorges

on Thursday, 18 June 2020 12:17

Despite the skeptics, Tesla Inc broke above the significant $1,000 price level for the first time in its history this month. The new high further accelerated the bullish optimism surrounding the company.

Can Tesla stick the landing?

“There continues to be a lot of enthusiasm and upward momentum for the stock that is driven by expectations for increasing EV demand,” Ivan Feinseth of Tigress Financial said when asked about Tesla’s recent price action.

Increasing electric vehicle demand is a global trend, and not just in the U.S. Many countries are committing to cut out fossil fuels.

“There is going to be significant expansion into China. China has mandated 100% EV vehicle sales by 2030,” Feinseth said. “France also has a 100% EV mandate by 2030 as well.”

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Don’t Think. Just Buy

Posted by JAMES RICKARDS

on Wednesday, 17 June 2020 10:06

“Central Banks Are Now de facto Guarantors of the Corporate Bond Market”

Fears about the rising number of reopening coronavirus hotspots and economic threats were superseded by unbounded joy as the Fed announced it will buy secondary market corporate bonds direct[ly] rather than through ETFs, without any need for companies to certify their eligibility. That pressed the risk-on button — and markets recovered.

And so the free market sinks deeper into oblivion:

Central banks are now de facto guarantors of the corporate bond market.

What has all this QE Infinity and ZIRP interest rates created?… Where market prices have become meaningless as a result of financial asset inflation? Where junk bonds are priced like AAA securities, allowing private equity funds to thrive?

I am beginning to wonder if there is any point in thinking about markets any more… Just follow the central banks… don’t think. Just buy.

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2020 S&P 500 Recovery Rally ‘Closely Tracking’ 2009 Rebound

Posted by Wayne Duggan

on Tuesday, 16 June 2020 11:32

The historic stock market rally off the 2020 March lows continued on Tuesday, with the SPDR S&P 500 ETF Trust trading higher by 2.3%.

It may seem like the recent market trading action is unprecedented, but DataTrek Research co-founder Nicholas Colas said it’s actually “closely tracking” the market’s 2009 bounce off of the March 9 lows.

In fact, 58 days after the March 23 lows, the S&P 500 is up about 37%, almost perfectly in-line with the 39% index gain 58 days after the March 9, 2009 low. Unfortunately, if the S&P 500 continues to track its 2009 rebound, Colas said investors can anticipate about seven weeks of high volatility and very little overall gains.

Key Differences: Colas warned investors that the S&P 500 index is a lot different than it was back in 2009, and the current economic situation is different as well. First, the S&P 500 is currently trading at around 19.6 times recent peak earnings compared to 10.4 times trailing peak earnings at the same point in 2009…CLICK for complete article

The “Holy Grail” Of Investing Fails Its Benchmark

Posted by Lance Roberts

on Monday, 15 June 2020 6:50

 

“Robo-advisors faced their first big challenge with the bear market in the first quarter of 2020. They lost, and that is an ominous sign for the future of automated advice. 

All robos employ a degree of active management. They deviate from the cap-weighted market portfolio through fund selection or sector allocation. As active managers, robo-performance can be fairly viewed only through a full market cycle. Nobody needs an active manager in a bull market; index returns are adequate. Active management shows its value in its ability to protect against adverse market conditions. The market downturn in the first quarter gave us that opportunity.” – Robert Huebscher, Advisor Perspectives

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