Morning Comment: Talking Tough on China Just Became a lot Harder To Do


The stock market rallied nicely yesterday...with the tech laden Nasdaq leading the way once again. The 1.1% rally in the Nasdaq Composite took it back above 10,000 and slightly above its early June highs. We have to point out, however, that the internals from yesterday were not very good. Volume was very low...at just 3.6bn shares on the composite volume...and breadth that was quite disappointing for a day with such large gains. For instance, the breadth on the S&P 500 was BARELY positive (just 1.1 to 1 positive to be exact)...which is worse than mediocre for a day where that index rises 20 points. It was only just 1.2 to 1 positive for the Nasdaq...which stinks for an index that rallies more than 1%.

The Citi Economic surprise index rose again yesterday...even though the existing home sales data was a bit lighter than expected...as the better-than-expected Chicago Fed National Activity Index rose nicely...and offset the disappointing home sales number. Of course, this data was month-over-month data, so it really doesn’t tell us much about how we’re doing on an absolute basis. Therefore, we still don’t put very much weight around these numbers...as solid evidence that the economy is doing as well as the stock market is pricing-in right now (or will do as well any time soon).

Of course, the economy did not bounce-back immediately after the financial crisis of 2007-2009 either. It was a tough slog. In fact, two years after the bottom of that recession, the economy had not regained its formal levels or reached a level of normalcy. This might give some people a lot of confidence that we don’t need a return to the pre-pandemic levels for the stock market to rally further from current levels. If it took more than two years to get back ...

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Morning Comment: U.S. Open Tennis--Yes; Wimbledon--No. Actually, It Makes Perfect Sense.


Chairman Powell’s comment yesterday that the Fed will “slow their bond buying program as the markets improve” knocked the stock market down mid-morning. On Monday, the Fed’s announcement that they are going to buy individual corporate bonds as part of ...

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THE WEEKLY TOP 10....The Next Few Weeks Are Critical


THE WEEKLY TOP 10: The Next Few Weeks Are Critical.


Table of Contents:

1) We’re going to have to rely solely on stimulus for a further rally in stocks after the big run-up.

2) The problem is that nobody ...

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Morning Comment: The Action of the Next Few Weeks Will be Critical


With the stock market becoming quite overbought on a near-term basis, we have been saying this week that we expected the stock market to begin a pull-back after the Fed meeting/press conference, but we didn’t expect to quite as immediately ...

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Morning Comment: Watching the Aussi Dollar


The rally we saw in the stock market after Friday morning’s employment report was a very good one on several levels. It came on a big jump in volume (over 7bn shares on the composite volume) and very good breadth ...

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Morning Comment: Critical levels...Stay nimble my friends.


About a week ago, we said that the best thing that could happen to the stock market would be it to take a “breather” before it continued much higher. That, we said, would give it a better chance of rallying ...

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Morning Comment: Can European Stocks Be The Big Surprise of This Summer?


We’ve all starting to hear a lot of comparisons between this year and 1968 now that racial tensions and riots have been added to the list of other wild developments for 2020. It sure seems like President Trump is taking ...

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Morning Comment: BAC breaks out....Complacency surrounding China


We’d like to start this morning’s piece with a scenario that would provide the best chance of a strong (further) rally after yesterday’s advance in the S&P 500 above its two key resistance levels (its 3,000 level and its 200 ...

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Morning Comment: A look at the chip stocks....and gold.


A big bounce in the bank stocks created a very strong reversal in the broad stock market yesterday…and helped the S&P 500 rally 3% off of its early morning lows and close more than 1% higher on the day. The ...

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Morning Comment: Very Simply, Follow the (Smart) Money


Well, we can add another billionaire investor to the list of those who believe the stock market is going to see another decline. Stan Druckenmiller says the risk/reward for equities is the worst he’s seen in his career. To repeat, ...

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Morning Comment: Can the Fed Solve the Economic Problems With Liquidity This Time?


The golf courses here in the People’s Republic of Massachusetts finally re-opened this past weekend. It was funny. For the first time in history, husbands played golf with their friends on Mother’s Day. Previously, in order to preserve domestic tranquility, ...

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Morning Comment.....BABA: A leading indicator for future global growth?


The markets seem to come to a stand still yesterday…as the volume was even lower than Friday’s and the average volume of the past two days has been more than 25% below it two month average. The fact that the ...

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