Morning Comment: LT Rates Are Headed Higher, So Value Should Outperform Growth Going Forward.



It is interesting to see/hear the big divergence that has developed recently between the bullish and bearish opinions on the variants of the coronavirus. On the bullish side of things, we’re hear some health experts say that this the current “wave” of Covid will be the “last wave”…and comments like these are leading some market pundits to say that risk assets in general are going to rally significantly into the end of the year.

On the bearish side of the ledger, we have reports of big increases in cases in several parts of the U.S. We are also reading stories about Tokyo leaders saying that the “virus situation is out of control.” More importantly, China just partially shut down the third busiest container port in the world. This will further strain a global supply chain that has already been under considerable stress for a lot longer than most people had been thinking just six months ago. In fact, this newest development has taken things to the point where it could have a serious impact on the holiday selling season this year.

So, what’s it going to be? Is the Covid issue going to die down and enable the economy to continue to expand at a stronger rate…or are the variants going to cause enough restrictions around the globe to slow the rate of growth we’ve seen for the past several months?

Well, we’re not doctors or scientists (something a lot fewer people on Wall Street have been willing to admit in recent weeks), so it’s impossible for us to know for sure. However, we also have to consider one other possibility. We could see a situation where the variants do become a problem for an extended period of time, but the problems it causes in the supply chains creates higher ...

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Morning Comment: The Fed Has Done a GREAT Job....High Yield Market Showing Some Cracks.


Seventeen months ago, the global economy was in free-fall. In fact, it was all but shutting down. This, in turn, caused the fixed income markets to freeze-up. Customers were even having a tough time getting Wall Street firms to make ...

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Basic Material stocks are sending up a yellow warning flag on the economy

Key S&P sector may be signaling a second-half growth slowdown, strategist warns


Above, you can find the clip of the interview I did for CNBC.com yesterday (which was posted on their site today).

We've seen a drop in bond yields ...

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Morning Comment: Basic Materials: Are they signaling a slow-down?

Trading in the overall marketplace yesterday was quite strange. It looked like we were going to get a repeat of what took place two Mondays ago. Back then, concerns over the delta variant of the coronavirus raised concerns about second ...

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Morning Comment.....Chairman Powell: The Pinball Wizard.



Federal Reserve Chairman Powell did a masterful job yesterday of moving very slightly to a more hawkish stance about their bond buying (QE) program yesterday. Actually, we should use the term, “less dovish” rather than “more hawkish”…because his comments were ...

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Morning Comment: China fallout.....Big tech earnings



China’s stock market saw another sharp decline last night and that took the Shanghai Index below the 200-DMA for the first time in over a year. (Remember, that 200-DMA had provided excellent support for the stock market in March, April, ...

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Morning Comment: Yesterday did NOT provide a



It was a very rough day in the stock market yesterday, but the S&P was still able to hold its key support level (its 50 DMA), so it was not a disaster by any means. Besides, the S&P still ...

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Morning Comment: What are the NY Yankees telling us?


When we left the office yesterday, we thought we’d be starting this morning’s piece with a joke about NY Yankees. We were going to say that the story about several Yankees testing positive was completely made up…because they didn’t want ...

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Morning Comment: Highflyers stumbling.



After a very mild dip in mid-June, the stock market has rallied about 4%-5% over the last month. (+4% on the Nasdaq and +5% on the S&P 500.) However, it has not been a great couple of weeks for a ...

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THE WEEKLY TOP 10



THE WEEKLY TOP 10


Table of Contents:

1) Tech is too overbought to rally much further for a while.

2) However, AMZN could/should still outperform.

3) Chip stocks at key juncture with Taiwan Semi reporting this week.

4) Treasury yields ...

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Morning Comment: Tech looks particularly vulnerable


In our weekend piece, we said that the fact that the stock market was extremely expensive (and that leverage was extremely high) meant that the risk/reward equation was heavily skewed to the risk side of that equation. In other words, ...

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Morning Comment: AMZN poised to (finally) breakout?


Since we are coming off a long weekend and given the fact that earning season won’t really start for another week, it’s a good bet that the market will remain pretty quiet today. This does not mean that there won’t ...

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