Don't you hate it when someone answers their own questions? I do.
Apparently, that joke will be lost on a couple of people, much like the reasons why the SPX (Standard & Poor's 500 index) is only down 0.7% on the year, and the NASDQ hit 10,000 for the first time.
Two months ago when the world was shutting down over the coronavirus, I got a lot of mail from people who wanted to disagree with me that the coronavirus was not that big of a deal, that China was going to be a bigger deal, and that despite being down 37% for the year we would close higher on the year.
That is fine. I could have made snow cones with the “snowflake” rants I got before the election when I said mathematically Trump will beat Hillary who is ahead in the polls. No one bothered to read that her 14 point lead was conducted by sampling of 82% registered democrat voters. A simple ratio formula would have shown Trump would win by a landslide.
Surprisingly, I didn't think most Americans could even find the Britain on a map, but I got a lot of push back when I said the Brexit would happen, and the market would run up anyway. Looking at our FACEBOOK back in 2016, you will even see I wasted time making a “Don't fear the Brexit” video.
I have a strong desire to win. My ex-wife use to laugh about how competitive we were—but I LAUGHED MORE!
Monday, the SPX went positive for the year, even sooner than I anticipated. Newton's 3rd law of motion states “For every action, there is an equal and opposite reaction”. Yesterday, the NASDAQ breached 10,000, led by a huge run higher in Apple Computers (AAPL). I guess this is my insecure way of saying “I told you so!”.
The main reasons we jumped higher is that the Fed is pumping money into the system faster than before, the virus is proving to be benign compared to fears (0.2% mortality – not 4%) and $5 trillion in money market funds with no where to go and having missed most of the bounce. We have a lot more to go as well (with a caveat below in the TODAY SECTION).
After the market opened lower yesterday, it was apparent that people were taking profits, and confused. For the last two to three weeks, we saw a sector rotation out of past groups that led the market higher (FAANG stocks – FB, AAPL, AMZN NFLX, GOOGLE) and into sectors of the economy beaten up by coronavirus fears (travel, banking).
Yesterday, this unwound with travel stocks (BA, AAPL, CCL) falling hard, and FAANG stocks being bought again. It looks like we are back to the old routine again.