The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Resume climb.
Quiet headlines kept things uninteresting overnight and S&P futures were down small until 2 AM. In the run-up to European trading, which was bullish, our futures got back to flat. Once some healthy US economic data printed and some more companies reported, bullish narratives commenced. The index opened flat but rallied within 10 minutes. The index was up nicely before lunch and lifted gently further in the afternoon, printing new all-time highs. Yields weren’t a catalyst today even though the rose small in the belly. Rate cuts for the rest of the year priced at 43 bips, 3 fewer than yesterday.
Today’s a boring return to the usual market behaviors. Stocks go up. Investors are complacent. Look at the chart if you are wondering what to do. The bears are the only ones complaining and their arguments are all what-ifs and yeah-buts. After all the gains the longs have made, the what-about-what-might-happen concerns just won’t keep them off the buy buttons.
Right now, the market is very calm and very confident. This might be a variant of summertime trading but there’s also a lot of history at work. The market’s climb has instilled an invulnerable attitude to stock market investors. Without a scary news story or economic event, why would they change their attitudes and behaviors?
They won’t.
So up and up we go, where we’ll stop, nobody knows.
The drumbeat of earnings beats may be influencing the broader market too. We’re not seeing 1-3% up days but we may see a lot of 0.3-0.7% up days in sequence.
The bull market psychology is as strong as I’ve ever seen. It’s not a casino-mania like in the late 90s. It’s a stalwart assurance in inevitable upside.
Is it dangerous?
Of course.
Is it wrong?
Not right now. And not anytime soon.
See you tomorrow.
-Mike
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