Morning Note: “No new eras”, when we’re talking bubbles…

You’re probably growing tired of my harping on how market internals (breadth in particular) remain anything but inspiring to start the year. 

Yeah, I wish it wasn’t so, but we’re here to see things as they are and invest accordingly.

More of that same this morning; as I type the S&P 500 Index is flat, while nearly two-thirds of its members are actually in the red. 

Same thing for the Dow, it’s up a point, while 23 of its 30 stocks are trading lower.

Nasdaq’s up .21%, while 60% of its members are down.

The S&P 500 Equal Weight Index (gives each member equal weighting), however, makes sense, it’s down 0.47% to start the day.

And the Russell 2000 is reflecting market internals this morning as well, it’s down 0.53%.

Bottom line, the calendar’s turned, but the stock market (in terms of its internals) continues to party like it’s 2020…. well, in truth (per this week’s main message), like it’s 1999.

Dave Rosenberg echoes our messaging in his note this morning:   emphasis mine…

“The bubble that Jeremy Grantham described is in full swing and this may well go down as the most momentum and speculation-driven asset mania in recorded history. Who knows when it will pop, but it’s out there. There are no new eras and mean reversion means achieving two extremes, in the final analysis. One can’t time the peak but one can have a sense of history. Invest wisely and have hedges on just as you have property and casualty insurance on your real estate.”

Asian equities did well overnight, with 11 of the 16 markets we track closing higher.

Europe’s mixed so far this morning, with 9 of the 19 bourses we track trading lower.

See above for the U.S.

The VIX (SP500 implied volatility) is up 0.05%, VXN (Nasdaq i.v.) is up 0.49%.

Oil futures are down 0.36%, gold’s down 0.24%, silver’s down 0.11%, copper futures are up 0.12% and the ag complex is up 0.30%.

The 10-year treasury is down (yield up) and the dollar is down a big 0.42%.

Dragged by energy, banks, healthcare, AT&T and financials — yet buoyed a bit by tech, Eurozone equities, ag commodities and metals — our core portfolio is off 0.28% to start the day.

As we’ve been reporting, optimism for equities is at a historic extreme, however, there is one group of individuals who stand out like a bearish sore thumb. 

It’s, of all people, corporate insiders (we assume they know their own companies) — they’ve been selling their personal holdings of their own company’s stock en masse, even, per the below, as many of them are back to spending their own company’s cash on (and/or, alas, borrowing to fund) share buybacks… How convenient!


Have a nice day!
Marty

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