Should Have Bought The Dip
You should have bought the dip.
US equities turned positive for the week on Thursday, erasing Monday's dramatic selloff, and snapping the longest streak without a 1% daily advance since early last year in the process (figure below).
Thursday's gain for the S&P was the largest since July 20. The narrative was retrofitted for the price action. Earlier this week, stocks were "rattled by the prospect of a systemic meltdown in the world's second-largest economy." Fast forward a few days and Eve
I don’t know about the rest of you, but this market is doing its best to turn me into a buy-and-hold kind of guy. And I’m not exactly young.
this is the first year in at least 20 that I have not sold one stock…
H-Man, maybe the roosters are coming home to roost. It seems like equities can digest higher rates. If so, how much before indigestion or, in the words of many, when does the puking start?
Delta surge is rolling over. Fed taper is well telegraphed. Evergrande is a China story. Inflation is somewhere in the peaking process, at least as far as investor attention goes.
The risks now, I think, are debt ceiling, infrastructure bill(s), and 3Q earnings/guidance.
So what’s more likely? In the next month, the government will figure out how to not default – we’ve seen that movie before. The Democrats will figure out how to pass something that is watered-down, both in spending increases and tax increases, and the latter should bring some relief to the beleaguered 1%. We’ve discussed the relationship between 3Q earnings and Sep/Oct market weakness. After FDX and NKE, and however many GDP downgrades, what investor doesn’t expect near-term softness?
Feels like a setup for a positive 4Q, though just how positive is up for debate.
Sure, 1H22 is not looking super inspiring, but when do we start worrying about that? Ok, start worrying now but it probably doesn’t dominate most investors’ actions just yet.
Bigger picture, we’re in the transition from early cycle to mid cycle, and that means certain changes to portfolio risk levels and exposures, but not diving for the bomb shelter.