The equity market has been buffeted of late by headwinds that, given the present state of inflation and overall slowing general conditions, should come as no surprise to anybody. That is, companies are having to state it like it is, with regard to their go forward prospects.
“In the US this morning, another retailer reported surprisingly strong results with Dick’s
Sporting Goods (DKS) as adjusted EPS beat by 15% on comp sales down 8.4% YoY versus –10.8% YoY
expected; top line was 3% higher than estimated. The bad news was guidance: full year adjusted EPS
guide was cut 16% at the midpoint. Given the fiscal Q1 beat, that implies 26% lower adjusted EPS than
previously forecast. Full year comp sales guidance was also slashed from down 4%-flat to a range between down 8% and down 2% (analysts had expected a 2.2% drop).”
This — slowing general conditions in particular — keeps up and the Fed’s resolve in fighting inflation will indeed be put to the test.
Mortgage purchase apps (flat) and durable goods (rising but at a slowing pace) released this morning were on-balance uninspiring, and, therefore, noninflationary per se…
One of this year’s main themes has been the positive correlation between bonds and stocks (both down!). Well, that’s been changing of late, suggesting a potential sentiment shift that focuses on weakening general conditions as opposed to rising inflation.
S&P 500 white, TLT (long treasury bond ETF) yellow:
Asian equities were mixed overnight, with 8 of the 16 markets we track closing lower.
Europe’s mostly green so far this morning, with 15 of the 19 bourses we follow trading up as I type.
US stocks are generally higher to start the day: Dow up 44 points (0.14%), SP500 up 0.22%, SP500 Equal Weight up 0.36%, Nasdaq 100 up 0.35%, Nasdaq Comp up 0.38%, Russell 2000 up 0.88%.
The VIX sits at 29.47, up 0.07%.
Oil futures are up 0.84%, gold’s down 0.91%, silver’s down 0.64%, copper futures are down 0.76% and the ag complex (DBA) is down 0.88%.
The 10-year treasury is up (yield down) and the dollar is up 0.41%.
Among our 38 core positions (excluding cash and short-term bond ETF), 19 — led by energy stocks, Dutch Bros, Disney, emerging market bonds and carbon credits — are in the green so far this morning. The losers are being led lower by Albemarle, Sweden equities, gold, miners stocks and ag futures.
Jesse Livermore (July 26, 1877 – November 28, 1940) , in his prime, may have been the best of them all, certainly my favorite:
“Without faith in his own judgment no man can go very far in this game. That is about all I have learned—to study general conditions, to take a position and stick to it. I can wait without a twinge of impatience. I can see a setback without being shaken, knowing that it is only temporary.
I have been short one hundred thousand shares and I have seen a big rally coming. I have figured—and figured correctly—that such a rally as I felt was inevitable, and even wholesome, would make a difference of one million dollars in my paper profits. And I nevertheless have stood pat and seen half my paper profit wiped out, without once considering the advisability of covering my shorts to put them out again on the rally. I knew that if I did I might lose my position and with it the certainty of a big killing. It is the big swing that makes the big money for you.”
Have a great day!