Morning Commentary
The market eked out a gain on Friday. The operative word is ‘gain’ as bias has shifted back to the upside. Part of what’s propelling the market is a kind of animal spirit. In the wild, dominant animals like lions and tigers are more likely to fail to accrue the energy needed to breed than herbivores like zebra.
That same high-risk spirit is dominating the stock market right now, and many investors are bailing out of stocks with great value to play the lion and cheetah game. It's not the right fit for 99% of investors, particularly those who consider themselves buy-and-hold investors.
Money Staying in the Game
I like it when the rally broadens out, and money rotates into different sectors rather than sitting on the sidelines.
Friday was all about value, as the three top sectors have compelling value propositions.
The rally in commodities is mainly driven by the AI story (and longer-term EV and grid upgrades), but some are extrapolating the move to an uptick in the global economy.
I’m not necessarily buying that, but if there is any truth to it, then Energy is significantly undervalued. Hence, the dominance of these names in Friday’s session.
Going Their ‘Own Way’
You can go your own way
Go your own way
You can call it
Another lonely day
You can go your own way
Go your own way
Fleetwood Mac
The Mag Seven has gone its own way, but it could reunite with a solid financial release and guidance from Nvidia (NVDA) on Wednesday after the close.
The New Normal
I think the market is also in the process of accepting a new normal of higher interest rates. Comments from Atlanta Fed President Bostic provide great opportunities for investors to begin ingesting the new reality into their psyches and investing models.
Comments |
The "Nag Seven"? Was that a typo or a dig that they are not all horses pulling the cart? Chuck Lucente on 5/20/2024 10:03:12 AM |
Ha, could be both. But we fixed it to Mag. Daliah on 5/20/2024 10:06:08 AM |
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