Market Performance For The Week
Disclaimer: Past performance is no guarantee of future performance
The Good News
Earnings expectations continue to rise.
If the positive EPS surprise trend of the last few quarters continues in Q2, actual (Y/Y) earnings growth for the $SPX for Q2 could be as high as 81%. https://t.co/0hICawJDD2 pic.twitter.com/1SulA7N9t8
— FactSet (@FactSet) July 9, 2021
Small businesses are optimistic and are wanting to hire.
Record 39% of business owners planned to raise compensation in June; record 28% planned to increase hiring; 47% (highest since March 1981) saw higher prices pic.twitter.com/nGqdDpP4pW
— Liz Ann Sonders (@LizAnnSonders) July 13, 2021
The Bad News
Are we experiencing peak growth?
Peak reopening: After a huge recovery, the year-over-year growth in expected earnings has roundtripped from -30% to +50%. I expect earnings to continue to grow, but at a slower pace from here. pic.twitter.com/mTkteOrauH
— Jurrien Timmer (@TimmerFidelity) July 7, 2021
The #Citi #Economic surprise index is back below zero as #peak #economic growth is in. Annual data comparisons are going to get much more difficult next quarter. @RealInvAdvice @SoberLook pic.twitter.com/bv5LYlYi1N
— Lance Roberts (@LanceRoberts) July 13, 2021
Companies want to hire, but people are staying on the sidelines.
ECONOMY WATCH: U.S. job openings were a record 9.21 million in May (April revised down to 9.19 million from 9.3M). There's plenty of jobs available more than a year after the pandemic, but not enough people willing to take them yet despite high unemployment …
— MarketWatch Economy (@MKTWeconomics) July 7, 2021
— Sam Ro ???? (@SamRo) July 7, 2021
Inflation just keeps rising.
The CPI jumped 0.9% in June and 5.4% from the same month last year, most since 2008 per @USDOL
— Danielle DiMartino Booth (@DiMartinoBooth) July 13, 2021
A significant portion of the rise continues to be from used cars.
— Joe Weisenthal (@TheStalwart) July 13, 2021
The State Of The Market
The market is kind of boring right now – in a good way, though.
Last time there were more record closing highs in a 12 day period was in 1964.
— Bespoke (@bespokeinvest) July 12, 2021
Historically, its been a long time since we had a 5% correction. pic.twitter.com/yUW9J4cwg6
— Lance Roberts (@LanceRoberts) July 7, 2021
Inflation is hard. Expectations Peaked in March/April, yet we continue to see inflation reports beat estimates.
Shorter B of A: Peak everything. pic.twitter.com/Sj2jgoDlKy
— Carl Quintanilla (@carlquintanilla) July 13, 2021
Treasury yields peaked before inflation expectations, and they have fallen by double than "inflation break-evens." Bond market saw early on that inflation was going to be transitory and any action the Fed will take can bring down inflation pic.twitter.com/hLH6fsH4KX
— Global_Macro (@Marcomadness2) July 8, 2021
And the market doesn’t seem to care. The reflation trade everywhere is reversing.
— jeroen blokland (@jsblokland) July 13, 2021
10 yr bond yields: 1.4%
Bitcoin: 50% off its highs
Gold: flat over the last year
Inflation hedging: not as easy as it sounds
— Ben Carlson (@awealthofcs) July 13, 2021
Changing of the guard — large now beating small, and growth now beating value in 2021
S&P 500 +16.3% YTD
Russell 2000 +15.5%
S&P growth +16.9%
S&P value +16%
— Sarah Ponczek (@SarahPonczek) July 12, 2021
— Michael Kantrowitz, CFA (@MichaelKantro) July 7, 2021
Charts Of The Week
Source: Financial Times
An average of 41% of stocks in the Nasdaq Composite closed above their 10-, 50-, and 200-day averages today.
That's the lowest percentage for any day when the Composite closed at a 52-week high. pic.twitter.com/t7E0hoTnMd
— SentimenTrader (@sentimentrader) July 6, 2021
Story Of The Week
Unfortunately, the pandemic reversed 15 years of world hunger progress: https://www.bloomberg.com/news/articles/2021-07-12/world-hunger-surged-to-15-year-high-as-virus-stifled-food-access
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