Morning Comment: We're following the same script as this time last year.


We had a very mixed day in the stock market. The S&P 500 and Nasdaq declined, while the DJIA and the Russell 2000 rallied. We had a similar divergence among the groups, with the energy and financial sectors rallying strongly, while the tech & healthcare sectors took it on the chin.

This is very reminiscent of what began playing-out about a year ago. Back in early August of 2020, the yield on the 10yr note re-tested its March lows of 0.5% and started to rise. Once it became evident that this signaled a change in trend for long-term rates, the tech stocks began to roll-over and the small cap value stocks started to bounce. This was followed by a broad correction in the S&P 500 and Nasdaq composite, AND a multi-month period where the tech stocks underperformed and the value names outperformed (value over growth).

This year, a multi-month decline in rates bottomed in early August once again. It was not a “double-bottom” like it was last year, so it took a bit longer to confirm that a bottom of some importance was put-in. Once that took place (when the 10yr yield broke above the key 1.4% resistance level in a meaningful way), we have started to see the same kind of “rotation” out of growth and into value that took place last year. Of course, it’s too early to say that this change in trend will be as strong (or last as long) as it did last year, but given that the yield on the 10yr note have moved WELL above their key resistance levels (as has the spread between the yield on the 2yr & 10yr notes), it is our opinion that it is VERY likely that this new “rotation” move will last for a lot more than ...

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THE WEEKLY TOP 10

I am told that there was a problem with posting my “Weekly Top 10” last evening. Therefore, I thought I’d re-send it myself this morning. My apologies if this is a dupe. (BTW, this was written before the news that ...

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Morning Comment: The spill-over of a key de-risking policy.


Much like the coronavirus in January and February of 2020, the situation facing Evergrande has been staring investors in the face for a while now…and yet they have ignored the growing negative situation (mostly due to the fact that the ...

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THE WEEKLY TOP 10

I’ll be away next weekend, so I will send-out an abbreviated edition of “The Weekly Top 10” on Thursday evening. Thank you very much.


THE WEEKLY TOP 10


Table of Contents:

1) When inflation is induced by a lack of ...

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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. ...

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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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