It’s probably fair to suggest the unofficial “consensus” on Wall Street is year-end stock rally.
SPX 6000 feels very much like a foregone conclusion. We’re not especially far away as it is, which is to say 6000 isn’t even a proper “bull case” anymore. You can pretty easily make a seasonal, flow of funds argument for a melt-up that takes the S&P through and well beyond the next thousand-point milestone.
Of course, there’ll be bumps in the road. Maybe even a pothole. Or a civil war in the US. Who knows! That’s what makes life worth livin’. The anxious anticipation of adverse events, like bloody fratricide.
Sorry. That’s pretty grim. If you’re looking for a bear case (or just confirmation bias for a pullback call) you could cite fund manager cash levels, from BofA’s monthly poll of professionals.
As the figure shows, 3.9% is the lowest since the 2021 stimmy go-go days.
The red lines are thresholds for BofA’s indicator. It’s not complicated: When fund managers are hoarding cash because they’re terrified, it’s time to buy. When they’re deploying cash into risk assets because they’re chasing a rally, it’s time to sell. Again, this is a contrarian indicator.
If you’re curious as to the backtest, the bank’s Michael Hartnett reminded investors this week that in nearly a dozen prior cash-level “sell” signals since 2011, the MSCI All-Country World gauge (i.e., global stocks) generally fell -2.5% over the ensuing month.
So… what? I don’t know. Buckle up for a harrowing crash to SPX 5677 I guess. To survive, you’ll need 47 gallons of drinking water, 17 pounds of freeze-dried astronaut food, five boxes of bullets, three tubes of Neosporin and a two-year supply of toothpaste.
I always chuckle when I hear the toothpaste thing–ever since I first hit a click-bait “Mark Cuban’s secret to blah blah blah” article. I chuckle because I actually did that once, albeit without intending to.
I was at Target, and Crest was on my list. (I don’t remember the exact prices, these are just made up for illustrative purposes). One tube was $4.99, but they had two-packs for $4.49/tube or three-packs for $4.15/tube. So of course I’m going to get the three-pack. Only they also had a buy-2-get-1 special. So I’m going to buy 3 of course. They must’ve really needed to clear out shelf space in the toothpaste section of their warehouse, because they also had a deal where if you spend more than $25 on Crest, you got a $5 gift card. I was a dime short, so obviously I’m going to buy one more, but that means buying 3 more to take advantage of the BTGO deal…
And that’s how I wound up buying 18 tubes of toothpaste for $2.49/tube. I used up the last one right as the expiration date was hitting, couldn’t have planned it better.
Yeah, Mark and the toothpaste is great.