Morning Commentary
The fastest dive by a bird is that of a peregrine falcon (Falco peregrinus), which has been estimated as reaching a terminal velocity of approximately 300 km/h (186 mph) when in a diving-stoop. At this point, the peregrine falcon is the fastest animal in the world. In 2005, "Frightful," a peregrine falcon owned by Ken Franklin of Friday Harbor, Washington, USA, was clocked at 242 mph (389.46 km/h) while stooping (diving after prey) from nearly three miles in the air.
To clock Frightful’s mid-dive speed, Ken Franklin and a few mathematicians and engineers fastened a 113.4-gram (4-oz) computer chip taken from a skydiver’s Pro-Track recording altimeter/computer to Frightful’s tail feathers and measured how far she fell in a certain time interval.
Guinness World Records Limited 2022. All rights reserved.
The peregrine falcon was the first thing that popped into my mind when I saw yet another massive dive into the close yesterday. These majestic birds of prey are a wonder of the animal kingdom.
Stocks Diving-Stoop
No sector was safe, although cyclical sectors tried to feed off spiking bond yields, but still had to succumb to the overall market pressure. Defensive names probably lost out to cash, giving up the equity ghost and heading for the sidelines.
There were a few green specks here and there but mostly a red sea mess.
Flight to Safety
Market Breadth
New lows are mounting, although I was surprised at the up volume on the NASDAQ Composite, there might be some accumulation happening. A lot of stocks are down double digits – weakness will be punished this earnings season.
Market Breadth |
NYSE |
NASDAQ |
Advancers |
1,011 |
1,535 |
Decliners |
2,299 |
3,193 |
New Highs |
66 |
70 |
New Lows |
311 |
408 |
Up Volume |
1.66 billion |
2.16 billion |
Down Volume |
2.56 billion |
2.67 billion |
Stock Picker’s Market
I had a great conversation yesterday with Jim Bianco of Bianco Research on my show: Making Money. He does great work, including handsome charts that illustrate what’s happening better than words. Looking at the first quarter total return, there was no place to hide.
No place!
Jim says he thinks investing has to be idiosyncratic, which means picking individual names to beat the market. Of course, I believe this under any circumstance, save for rare windows when markets or segments are going parabolic.
Right now, it feels like the exact opposite is happening. There are a lot of negative assumptions going on, and those assumptions are being baked into stock prices. It’s ugly, but it will work in our favor.
For now, we will stick with one of the highest cash positions ever for the model portfolio because I want a lot of dry powder to pounce.
Consumer Price Index (CPI) Report Today
This inflation read has become more important than the jobs report. However, I think this number will be the peak, but with China shutting down Shanghai and even Philadelphia bringing back indoor masks, Covid-19 continues to be a wildcard.
U.S. March CPI Estimates
Credit Suisse 8.6% Morgan Stanley 8.6% Citi 8.6% Goldman 8.6% ING 8.6% Barclays 8.5% Stan Chart 8.5% |
Nomura 8.5% UniCredit 8.5% TD 8.5% Jefferies 8.5% Natixis 8.5% Society Générale 8.4% |
Bank of America 8.4% Wells 8.4% Pantheon 8.4% BNP 8.3% Intesa 8.3% Berenberg 8.2% |
History in Making
Reversing a 40-year trend for bond yields could be monumental, perhaps ushering in a multi-decade decline in the ten-year bond.
Here's the conundrum & the opportunity
YOLO For Real
According to the NY Fed consumer survey, we see record inflation with record spending and less income.
The result of this odd brew of expectations is a record low number of people see their financial situation to be better off, while a record high sees the situation getting somewhat worse or much worse off.
Portfolio Approach
We are adding to a new position in Consumer Discretionary in our Hotline Model Portfolio this morning. If you are not a current subscriber to our Hotline premium service, email Info@wstreet.com to enroll today.
Inflation Roars
Inflation numbers came in slightly above consensus year over year, but there was a bright spot with core climbing at a much slower pace than anticipated
Real Hourly Wages -2.7% underscore frustration on Main Street.
The market is breathing a sigh of relief on the notion that maybe inflation is peaking or has actually peaked. Bond yields are easing a bit and that’s giving relief to growth stocks.
Tech names also getting a boost from speculation that Apple (AAPL) will announce $90.0 billion buyback program and hike its dividend by 10%.
Comments |
Good news is just around the corner! We have to have patience! We have had a good run, now we have to let everything settle and be ready. Lorin on 4/12/2022 12:11:57 PM |
I think the reason consumer spending is so high is due to pent up demand. Investors underestimate the huge impact that the pandemic and lockdowns had on consumers. Discretionary spending virtually came to a halt for months on end. Consumers are now spending like crazy! Allen Fine on 4/12/2022 3:22:17 PM |
Tweet |
4/26/2024 1:46 PM | Full Steam |
4/26/2024 9:39 AM | BIG TECH STEPS UP |
4/25/2024 1:16 PM | Don't' Bury me, Yet! |
4/25/2024 9:27 AM | THERE CAN ONLY BE ONE |
4/24/2024 1:30 PM | Earnings Flood In |
4/24/2024 9:26 AM | BUYING THE DIP |
4/23/2024 1:25 PM | Bloom Off Rose |
4/23/2024 9:32 AM | WHAT HAPPENED TO THE BRAVADO? |
4/22/2024 1:22 PM | Pins and Needles |
4/22/2024 9:30 AM | LIVE BY THE SWORD … |
4/19/2024 1:20 PM | Fair Chunk of Rotation |
4/19/2024 9:35 AM | DON’T OVERREACT |
4/18/2024 1:37 PM | Didn’t Break Down |
4/18/2024 9:40 AM | MARKET OFF SCRIPT |
4/17/2024 1:59 PM | Facing Pressure |
4/17/2024 9:37 AM | POWELL STILL WANTS TO HELP |
4/16/2024 1:35 PM | Muted |
4/16/2024 9:42 AM | FEAR ARRIVES |
4/15/2024 1:17 PM | Making a Statement |
4/15/2024 9:45 AM | Equal Opportunity Drubbing |
4/12/2024 1:37 PM | Pressure Overall |
4/12/2024 9:42 AM | WHO YA GONNA CALL? |
4/11/2024 1:38 PM | No Urgency |
4/11/2024 9:27 AM | Tough Sledding |
4/10/2024 1:22 PM | Hang In There |
More commentary archives |
Home |
Products & Services |
Education |
In The Media |
Help |
About Us |
Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.
|