Morning Commentary
Tuesday was an ugly session. There wasn’t any sense of panic, but there wasn’t any sense of life. Look at the red on the Heat Map. Ouch.
And yet, growth sectors also pulled the overall S&P 500 into the plus column. Are we sure we want to move on to other sectors? When the mega-cap rally is finally over, we may miss it dearly.
Between that faithful moment, large-cap tech shouldn’t be underestimated. In the most recent week, $12.7 billion poured into the category. On the other end, $4.0 billion came out of government bonds.
Perhaps the rotation that will be most impactful won’t be large-caps into small-caps, but bonds and money market funds.
No other sector has gotten any of the fresh cash that’s flowed into the market this year.
The NASDAQ Composite continued its 2023 dominance and talk of its demise.
Although the NASDAQ enjoyed a nice gain, the internals are tough. Decliners swamped advancers, and the down volume doubled the up volume. But there were more 52 highs than lows.
Market Breadth |
NYSE |
NASDAQ |
Advancers |
853 |
1,443 |
Decliners |
1994 |
2,807 |
New Highs |
76 |
88 |
New Lows |
13 |
70 |
Up Volume |
837.82 million |
2.09 billion |
Down Volume |
3.05 billion |
4.08 billion |
Portfolio Approach
We added a new Technology position in the Hotline model portfolio.
Today’s Session
The focus on the economy intensifies as we get closer to the jobs report on Friday.
Yesterday, Car-Mart (CRMT) posted its financial results that saw revenue up slightly, 2.8%, but retail units down 4.6%. There were serious red flags:
Shares Skid
The stock got creamed, finishing the session down 18%, and during the session shares were off 26%.
The company has 154 locations in Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee, and Texas.
Could this just be a poorly run company or just another harbinger for the direction of the entire economy?
Total auto inventories are above the 5-year average for the first time since august 2019.
3Q2023 Productivity
Revised labor productivity now stands at 5.2% from 2.4% a year ago.
Productivity is the secret sauce for an economy that provides healthy wages but can also keep the Fed at bay.
The question is how much of today’s number comes at the expense of unit labor costs.
ADP
Goods
Services
Reactions
Major equity indices edged higher on this morning’s release and the ten-year yield moved lower. I still think the true buy signal happens with a yield below 4.0%.
Comments |
But how much of the nationwide car inventory is due to the failed changeover to EVs? Last I heard they had inventory times twice what gas powered had. Ergo, Car Mart poor management by bringing wrong vehicles into inventory? Alan Woodruff on 12/6/2023 11:35:47 AM |
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