Morning Comment: Liquidity stresses in China growing


Last year, at about this time, we turned bullish on the bank stocks. We said that after 2.5 years of underperformance, the group would finally start to outperform the market. There were not very many people who agreed with us. Most, who had been bullish on the group for almost 2 years (while we continued to call for underperformance in the group), they had thrown in the towel earlier in the year that year……A few weeks later (in early October), we turned bullish on the energy sector. We pounded the table on our bullish call…even though just about everybody else on the Street was incredibly bearish on the sector.

Both of these calls have worked out very well over the past year. Yes, both sectors have seen pull-backs, but we’ve been able to recognize those move in advance as well. However, we’ve remained bullish on them on a longer-term basis, and this has worked out incredibly well. Since we turned bullish on the bank stocks, the KBE bank ETF is up over 80%...while the S&P 500 has rallied “only” 38%. Since we turned bullish on the energy sector, the XLE energy ETF had advanced 77% and the XOP oil and gas E&P ETF has gained almost 120%...while the S&P had rallied 36%. Therefore, these calls have been homeruns!

Today, our emphasis is on the broad market…and we are quite cautious. Our one concern with this stance is that the situation is very different from the one we experienced last year. Last year, pretty much NOBODY agreed with our stances on the bank and energy names! Today, many strategists seem to be cautious about the near-term prospects for the stock market. Don’t get us wrong, there are still plenty of bulls out there. It’s just that we have more company with ...

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Morning Comment: Oil & gas stock poised to breakout again?



After falling for five straight days, the S&P 500 looks higher by about a half a percentage point this morning. There does not seem to be a key reason why the market is bouncing back this morning…other than the fact ...

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THE WEEKLY TOP 10

We just want to make a quick comment because we have some new readers. Each point begins with a very quick summery (in bold letters) of what we’ll say in the “body” of that bullet point. We still like to ...

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Morning Comment.......Never forget.

Tomorrow will be the 20th anniversary of 9/11, so it’s tough to talk about the markets on a day like this. With this in mind, we’ll just highlight a few bullet points…and leave the rest of the market analysis to ...

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Morning Comment: Imminent change in trend for the bond market?



Well, here we are, it’s September. Sure, it technically began last Wednesday, but now that Labor Day weekend is behind us, the seasonally September/October timeframe has officially begun. Of course, the fact that everybody is talking about this seasonally tough ...

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Morning Comment: ECB warning....China warning....Mega-cap tech extended.



The stock market rallied for the seventh time in eight days yesterday, but Monday’s move was a very narrow one, and it came on very low volume. Despite the 20-point rally in the S&P 500, the breadth for that index ...

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Morning Comment: Long-term yields creeping higher.....GOOGL getting very overbought


As we move closer to this week’s KC Fed Symposium in Jackson Hole, the yield on the U.S 10-year note has crept a bit higher…and it is now back above 1.3%. This is not a major development. In fact, the ...

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THE WEEKLY TOP 10


THE WEEKLY TOP 10


Table of Contents:

1) Don’t blame the Fed if that stock market corrects at some point this year.

2) “Supply constraint” inflation is much different (and much worse) than “demand led” inflation.

3) Economic data could ...

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Morning Comment: Stagflation is the real concern, so stop blaming the Fed.



We got a relative sharp decline in the stock market yesterday on very poor breadth (8 to 1 negative on the S&P 500), but volume was not very strong (just 2.4bn shares on the composite volume). However, the market closed ...

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THE WEEKLY TOP 10



THE WEEKLY TOP 10


Table of Contents:

1) The argument that ultra-low rates justify higher stock prices is quite flawed in today’s world.

2) The stock market IS expensive. Don’t let anybody tell you otherwise.

2a) The odds that the ...

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Morning Comment: LT Rates Are Headed Higher, So Value Should Outperform Growth Going Forward.



It is interesting to see/hear the big divergence that has developed recently between the bullish and bearish opinions on the variants of the coronavirus. On the bullish side of things, we’re hear some health experts say that this the current ...

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Morning Comment: The Fed Has Done a GREAT Job....High Yield Market Showing Some Cracks.


Seventeen months ago, the global economy was in free-fall. In fact, it was all but shutting down. This, in turn, caused the fixed income markets to freeze-up. Customers were even having a tough time getting Wall Street firms to make ...

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