Hey Folks, I will repeat some of my thoughts from last week as they are still relevant in this week’s action. Enjoy our market updates
Weekly Sound Bites:
• The group of big tech players known as FAANG – Facebook, Apple, Amazon, Netflix and Google – have outperformed the broad market indices during this crisis. In fact, the FAANG stocks have been among the largest contributors to the market’s rebound off March lows. With Facebook, Amazon and Alphabet trading near all-time highs, the five stocks have a combined market cap of $4.4 trillion and, therefore, have a larger influence on the market cap-weighted S&P 500. Let’s also include MSFT in this group as well as they are also up over 15% this year as well…
• 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 is 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 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…so 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 Hing Kong’s autonomy under the originally agreed to “one-country, two systems” framework could cause more pain for investors and the markets…
Weekly Round-Up;
Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
