Memorial Day Holiday Weekend is upon us and I would like to acknowledge and give a shout out to all those former and active American Military personnel…as we honor and mourn all those military personnel who had died while serving in the United States Military we are going into this weekend seeing all 50 States now opening back up, some more than others. We will see how this plays out no doubt on various media broadcasts…I hope all of you will enjoy the weekend and with the summer weather descending upon, go enjoy the outdoors.
Weekly Market Sound Bites:
• With the death toll passing 95,000 on 1.5 million cases this past week, the markets showed remarkable strength on the back of positive news on Moderna’s (MRNA) initial reports of their Vaccine drug in Phase I trials…this coupled with Fed Chair Jerome “Power Ranger Boom-Boom” Powell’s comments the Federal Reserve still has more tools to use as necessary to help fight the economic crisis…we also saw car factories reopen and the PGA and Nascar staging events without spectators as Major League Baseball laid out rules for upcoming pandemic play…we also saw another 2.4 million applying for unemployment while millions fell behind on their mortgages but airline traffic ticked up a bit…currently we see the S&P stuck between two competing forces; -there’s the $6 Trillion of central bank asset purchases globally which have created a bid for the markets while on the other hand, the offer, which is keyed to what could be a larger 50% drop in global earnings in 2020…so far the Bid is winning…however, if history is our guide, then the next move favors the downside…
• The great outdoors is now open for business as the nation begins to see a break in winter weather and warmer summer like temperatures cover most of the country over this Memorial Day Holiday weekend….additionally, now all 50 States are now opening businesses, some further along than others, but the great reopening has started…Call it stir crazy, or just plain bat shit crazy Politicians, we’re seeing bike sales up over 400% in May, while hammock sales up over 150% and boat sales up 96%…so yeah, folks are getting into the outdoor spirit! Companies like Winnebago (WGO) and Pool Corp (POOL) up over 30% since the last month…yet a wave of Retail Sales earnings this past week showed most of their e-commerce activity was up almost 100% which was helping save earnings from forced shutdowns…
• In this large bullish run off the lows made this past March 23rd many brokerage firms are also seeing more day traders entering the markets…perhaps powered by commission free stock transactions and a sense of FOMO (Fear of Missing Out) or TINA (There is No Alternative) money has been chasing returns for the past 7 weeks…Some analysts are interpreting this as more of a speculative near term bull trap where prices will roll back over again while fewer are saying the lows have been made and any dip going forward will be worth buying…thus far, the Pandemic stars seems to be Netflix (up 40% YTD) and Clorox (up 36% YTD) but many analysts believe they have run too far and too fast so the future annual returns will be subdued…
• China’s move to a tighter grip on Hong Kong will also heighten the tensions between the US and China across a number of different areas…this latest step to erode Hong Kong’s autonomy under the originally agreed to “one-country, two systems” framework could cause more pain for investors and the markets…
Enjoy our Weekly Round-Up
Don’t Be A Rat Brain Trade – Be the Red Stripe Zebra !!
Trade Smart !
hpb
