Morning Comment: Basic Materials: Are they signaling a slow-down?

Trading in the overall marketplace yesterday was quite strange. It looked like we were going to get a repeat of what took place two Mondays ago. Back then, concerns over the delta variant of the coronavirus raised concerns about second half growth. That caused bond yields, oil prices, and stock prices to plummet.

Yesterday, there were more concerns about second half demand…and it once again led bond yields and oil prices to fall significantly. However, these concerns were not enough to impact the stock market. Sure, the moves in those other markets pulled-down the equity market from morning highs, but the broad stock market indices still closed the day pretty much unchanged. Given that crude oil fell by almost 4% and the yield on the U.S. 10yr note closed at just 1.17%, the fact that the stock market was able to hold up so well was surprising.

Then again, every little, tiny decline in the stock market has been bought with both hands this year, so maybe it shouldn’t be surprising that investors ignored the moves in the other markets yesterday. (Why let the market fall even 2%-3% before you buy with both hands…if it is going bounce-back within a day or two anyway?)

Having said this, the complacency in the market was not complete. Although investors were not selling stocks, it did look like they were buying at least some protection in the options market…as the VIX rallied almost 7%. Don’t get us wrong, that rise still left the VIX below 20, so it’s not like there was a major rush to put-on hedges in the stock market yesterday, but it still showed that SOME people were a little bit worried about the lack of movement in the stock market in reaction to the big moves in those other ...

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Morning Comment.....Chairman Powell: The Pinball Wizard.



Federal Reserve Chairman Powell did a masterful job yesterday of moving very slightly to a more hawkish stance about their bond buying (QE) program yesterday. Actually, we should use the term, “less dovish” rather than “more hawkish”…because his comments were ...

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Morning Comment: China fallout.....Big tech earnings



China’s stock market saw another sharp decline last night and that took the Shanghai Index below the 200-DMA for the first time in over a year. (Remember, that 200-DMA had provided excellent support for the stock market in March, April, ...

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Morning Comment: Yesterday did NOT provide a



It was a very rough day in the stock market yesterday, but the S&P was still able to hold its key support level (its 50 DMA), so it was not a disaster by any means. Besides, the S&P still ...

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Morning Comment: What are the NY Yankees telling us?


When we left the office yesterday, we thought we’d be starting this morning’s piece with a joke about NY Yankees. We were going to say that the story about several Yankees testing positive was completely made up…because they didn’t want ...

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Morning Comment: Highflyers stumbling.



After a very mild dip in mid-June, the stock market has rallied about 4%-5% over the last month. (+4% on the Nasdaq and +5% on the S&P 500.) However, it has not been a great couple of weeks for a ...

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THE WEEKLY TOP 10



THE WEEKLY TOP 10


Table of Contents:

1) Tech is too overbought to rally much further for a while.

2) However, AMZN could/should still outperform.

3) Chip stocks at key juncture with Taiwan Semi reporting this week.

4) Treasury yields ...

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Morning Comment: Tech looks particularly vulnerable


In our weekend piece, we said that the fact that the stock market was extremely expensive (and that leverage was extremely high) meant that the risk/reward equation was heavily skewed to the risk side of that equation. In other words, ...

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Morning Comment: AMZN poised to (finally) breakout?


Since we are coming off a long weekend and given the fact that earning season won’t really start for another week, it’s a good bet that the market will remain pretty quiet today. This does not mean that there won’t ...

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Morning Comment: Can Tesla (TSLA) makes headlines again???



The employment number was stronger that the consensus was looking for, but it was not far enough from those expectations to have an impact on the markets. In fact, the yield on the 10yr note is slightly lower than it ...

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Morning Comment: Mircon's earnings report (Wed) could shake up an otherwise quiet week.


We’re heading into what should be a quiet week for the stock market ahead of the long July 4th weekend. However, the next three trading days are the last three of the quarter (and the last three of the fiscal ...

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Morning Comment: Is Bitcoin's weakness due to the Fed's


The stock market came roaring back from Friday’s big decline and it allowed the S&P 500 take back everything it lost on that day. The rally came on mediocre volume of just 3bn shares, so that’s a bit disappointing. However, ...

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