The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
And away we go.
Like so many previous days, the news was a snooze. Futures were essentially flat overnight and in the early hours but they caught a small bid in the 90 minutes before the open. The S&P 500 began about +12 points and faded to unch’d just before lunch. The dip-buyers liked that opportunity and stocks rallied to +18 for the bulk of the afternoon. The index rallied a bit further in the final hour, printing fresh new all-time highs. The yield curve steepened a bit but that didn’t concern equities. Fed Funds futures continue to expect 25-bip cuts in each of the next two meetings.
The headlines don’t give us much to talk about so all we got is the price action. It is bullish. The magnitude of today’s rally was small, as were many previous ones. The consistency of the trend is what’s noteworthy. The S&P is up more than 3% for the month and 13% for the year. Those numbers will do two things for investors between now and year-end.
Without a major event to change the investing landscape, these things will be ever-present forces in the minds of investors. And the more we climb, the more powerful the thoughts will influence the players.
The market has become a big trend-following collective. This is dangerous *when it ends.* But until that happens, groupthink controls the tape.
When in doubt, look at this and ask yourself, should I hop on this thing or fight it?
They say don’t fight the Fed. True. Don’t fight the most obvious and powerful trend in stocks either.
See you Monday, have a great weekend.
-Mike
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