Morning Note: “Abnormal Is Normal”

To get a feel for how confused markets are these days, consider this morning:

Retail sales, two important regional manufacturing surveys, and jobless claims were released and, suffice to say, retail sales and manufacturing knocked it out of the park. Initial jobless claims even, while still an ominous 576k, were a net positive — as expectations were for 700k. The financial space (BofA, Citi, Wells and Blackrock) saw a slew of earnings releases that all destroyed expectations…

On that kind of news you’d expect bonds to be reeling (interest rates to be rising) and bank stocks to be screaming higher. 

Well, here’s the 10-year treasury yield this morning:

And here’s the bank index ETF (this morning circled in red):


As for bank stocks (while there’s lots of smart-sounding nuance we can come up with), for this morning we’ll simply acknowledge that, like trees, share prices simply don’t grow to the sky. Counterintuitive selloffs, corrections, even bear markets, are inevitable — with or without the promise of government stimulus as far as the eye can see…

As for bonds/interest rates, we can certainly talk bargain hunting (buying the recent dip in treasury prices) this morning, but, clearly, despite the positive data of late there’s some skepticism (showing up in the most recent action in bonds) over the economic state of affairs beyond this big reopening rush…


Asian stocks leaned green overnight, with 11 of the 16 markets we track closing higher.

Europe’s looking good this morning as well, with 15 of the 19 bourses we follow presently in the green.

U.S. major averages are trading nicely higher (save for the Russell 2k [flat]) as well: Dow up 255 points (0.76%), SP500 up 0.89%, SP500 Equal Weight up 0.57%, Nasdaq 100 up 1.34%, Nasdaq Comp up 1.10%, Russell 2000 up 0.04%.

The VIX (SP500 implied volatility) is down 2.94%. VXN (Nasdaq 100 i.v.) is down 1.15%.

Oil futures are up 0.17%, gold’s up 1.66%, silver’s up 1.84%, copper futures are up 1.87% and the ag complex is up 0.11%.

The 10-year treasury is up (yield down) and the dollar is down 0.03%.

Led by gold miners, silver, healthcare, gold and tech — but dragged by MP (rare earth miner), banks, oil services, financials and solar — our core portfolio is up 0.48% to start the day.


Keep the following in mind as (if) you pay attention to market gyrations over the coming months:

“An abnormal reaction to an abnormal situation is normal behavior.”

–Victor Frankl 

Have a great day!
Marty



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