Wall Street Has Almost Never Been This Pessimistic
We're now seven weeks into the fourth quarter and US equities have gained in six of them.
Cautious soundbites, ostensibly plausible near-term bear cases and dour prognostications of various sorts have all come to naught.
Robust earnings, a resilient US consumer, policy accommodation and a lack of alternatives for trillions in sidelined cash, have all helped bolster stocks, despite elevated valuations and narratives about "peak" this and "peak that." Equity allocations have rarely been higher.
I’m expecting a swift down move through next week followed by a swift move back up through to Dec OPEx. Basically, Friday was a great day to sell a call with plans to close it out next week.
So we’re doing the Santa Claus rally after all?
…just as long as Fox “News” doesn’t announce the dems war on Santa Claus rally…
‘“Asset prices are always driven by two simple things: Rates and profits.”’ One of the strongest myths that seems to circulate in the stock market is that rising rates hurt stocks. Not true. Since 1950, there have been fourteen instances of rising rates. Only two of those periods were coupled with falling stock prices, and in both cases the downdraft was less than 2%. In 2012 the stock market rose 127% while rates were rising.
Since Hartnett is so pessimistic about 2022, when does the Bull/Bear indicator start to change and will rates/earnings alone drive it? It’s been sitting at midpoint for quite awhile.
Well, it’s not based on any of that. The Bull & Bear indicator components are hedge fund positioning , market breadth, credit technicals and flows. So it’s not going to move based on any forecast, rates or earnings, unless they manifest in one of those components.
No worries about Dec 15 debt ceiling day?