Monday, March 1, 2021

Morning Note: Carts Before Horses -- And -- Chimps Before Traders

If this morning's bounce is any indication, there's yet more oomph to be had in the equity markets on news that simply confirms what we already know -- that fresh new money's to be delivered to the economy, by the proverbial truckload.

Being that we're essentially talking carts before horses; i.e., the spending that results from government transfers to folks' checking accounts, as opposed to the result of rising incomes due to increased productivity, well, all manner of imbalances, misallocations, bubbles (dare I say) will of course have to be dealt with by the markets in the months/years to come.

Looking at retails sales, for example, for the past 6 months, the question of sustainability looms large:

October, November and December saw the result of earlier stimulus wearing off, then January's $600 checks arrived. 

Stay tuned...

2 of the 16 Asian markets we track were closed overnight, 13 of the remaining 14 finished the session notably higher.

Europe's screaming higher this morning as well, with all 19 of the bourses we follow up well over 1% as I type.

U.S. major averages are bouncing big after last week's drubbing: Dow up 624 points (2.02%), SP500 up 1.95%, SP500 Equal Weight up 2.26%, Nasdaq 100 up 1.65%, Russell 2000 up 2.34%

The VIX (SP00) implied volatility is 14.88%. VXN (Nasdaq 100 i.v.) is down 12.45%.

Oil futures are up 0.68%, gold's up 0.74%, silver's up 1.22%, copper futures are up 1.22% and the ag complex is up 0.29%.

The 10-year treasury is up (yield down) and the dollar is up 0.18%.

Led by energy, miners, banks, materials and industrials, our core mix is up 1.45% to start the day. All of our positions are in the green thus far.

You know how I keep drawing comparisons between present-day market action ("everybody's" making a killing trading stocks) to 1999's? 

Well, just sayin:

"In 1999, a 6-year-old chimpanzee named Raven became the 22nd most successful money manager on Wall Street. She delivered a 213% gain and outperformed more than 6,000 professional brokers Raven chose her stocks by throwing darts at a list of 133 internet companies."  --@UberFacts

Have a nice day!

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