Wednesday, March 10, 2021

Morning Note: Beneath the Numbers

Well, thank heavens that scare's over. I mean, recent action -- not to mention the chart I featured yesterday morning -- was beginning to spell trouble. But now Tesla's back above $700 (from the $500's two days ago), GameStop's back to nearly $300/share, the S&P 500 roared 1.4% yesterday and the Nasdaq 100 staged a rip-your-face-off 4%+ rally.  Whew!!!

And, to top it off, CPI came in as tame as a kitten this morning -- smack in the face of folks, like yours truly, who believe inflation poses clear and present danger.

Beginning with the latter, I'll just throw out an unsubstantiated (at least in this brief post) don't hold your breath. Well, unsubstantiated other than to point out that declining used car prices pushed down on the CPI's goods component, while those in the business who compile the Manheim Used Vehicle Index tell us that used car prices actually spiked 3.8% month-on-month, and are up 18% year-on-year... That's interesting. While another drag on goods prices was apparel.... Well, going forward, let's think about the economy continuing to open up, and the fact that the average American gained some 12 pounds while holed up at home this past year... hmm...

As for the market action yesterday, while we won't make too much of a single day's action, it is worth noting that, under the surface of the impressive move, things weren't nearly as rosy as the upward thrust suggested. 

Believe it or not, among the S&P 500's members, declining stocks actually edged out gainers 256 to 248, and volume was 10%, 8% and 6% below the respective 1, 5 and 10 average volume numbers. As for the Dow, yesterday saw a 300+ point gain evaporate to barely even on the day. Monday gave up a 300+ point gain as well... So, for 2 days anyway, that smacks of distribution ("smart" money taking every opportunity to cut exposure)… That said, 2 days does not a trend make...

BTW, the Dow's up 311 as I type... But don't quote me when I get to the numbers section, as it'll be at least another 30 seconds before I get there...

Asian equities did okay overnight, with 12 of the 16 markets we track closing moderately higher.

Europe's nearly all green this morning, with all but 1 of the 19 bourses we follow higher at the moment.

U.S. major averages are looking up (although barely for the Nasdaq 100) as well: Dow up 245 (0.77%), SP500 up 0.36%, SP500 Equal Weight up 0.38%, Nasdaq 100 up 0.02%, Russell 2000 up 1.52%.

The VIX (SP500 implied volatility) is down 5.12%. VXN (Nasdaq 100 i.v.) is down 0.72%.

Oil futures are up 0.80%, gold's down 0.06%, silver's up 0.29%, copper futures are up 0.49% and the ag complex is down 0.70%.

The 10-year treasury is down (yield up) and the dollar is up 0.10%.

Led by oil services, MP (rare earth miner), banks, metals miners and financials -- but dragged by ag commodities, emerging market equities, base metals and the yen -- our core portfolio is up 0.12% to start the day.

As you've noticed, I'm fond of pointing to the irony that the very institution most responsible for the debt bubble we find ourselves living in is the very one society relies on to "manage" the economy through it.  

Well I fear/suspect that 

“No problem can be solved from the same level of consciousness that created it.”


Next up, this week's main message.

Have a nice day!

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