After 3 days of mild “rest” – and the first down day of the year (!!) for the S&P 500, bulls came back with bells on Thursday and Friday, driving indexes to record highs yet again. This is starting to get “parabolic”… some shades of the type of things we saw in 1999. (See the S&P 500 and NASDAQ charts below) The S&P 500 gained 1.6% and the NASDAQ 1.7% for the week.
“This reminds me of January 2000,” said Kent Engelke, chief economic strategist, at Capitol Securities Management, which manages $4 billion in assets, referring to the nearly unceasing climb to records for stocks and the unease it can inspire. “It’s scary, the unrelenting advance,” he added.
“The move isn’t about fundamentals anymore, but the overall euphoria,” said Jason Browne, chief investment officer of FundX Investment Group. “When we do get negative moves we don’t hold them; the environment pushes people to buy dips. Will that last forever? Of course not. You have to hope people are being realistic.”
Economic news was sparse and not market moving. But we’ll highlight retail sales:
Sales at U.S. retailers rose 0.4% in December, a fourth straight monthly gain. Excluding automobiles and gasoline, retail sales also rose 0.4% last month.
Earnings season kicked off late in the week with some of the mega financials providing solid #s.
We’ll skip the crypto currency pricing this week as the money seems to have moved from the currencies themselves to any equity announcing “blockchain”.
Here is the 5 day weekly “intraday” chart of the S&P 500 …via Jill Mislinski.
If you are a relative strength index person, this is an interesting thing to note…
The week ahead…
The next 3 weeks will bring the hot and heavy S&P 500 type earnings. We’ll see how long this parabolic market can sustain.
There is a “looming government shutdown” that happens now every few months, until they kick the can down the road and every politician agrees to spend more money than the country takes in.
Short term: What can you say at this point???
The Russell 2000 was oddly not participating – until Thursday and Friday.
The NYSE McClellan Oscillator readings improved obviously.
Long term: Unicorns and rainbows continue – again, now in extreme fashion. Look at that NASDAQ chart as this long term channel is busted away from.
Charts of interest / Big Movers:
Monday, GoPro (GPRO) initially plunged as much as 30% after it gave a fourth-quarter revenue forecast that was sharply below analyst expectations. But the stock pared losses to shed 13% after the camera company said it is exploring a sale.
Dave & Buster’s (PLAY) tumbled 22% after the company cut its 2017 profit and sales outlook.
Another week, another “blockchain” play – this time an old school one. Eastman Kodak (KODK) soared by about 120% Tuesday after the company said it was teaming up with a company to create a blockchain and cryptocurrency to pay photographers. And then another moonshot Wednesday, up another 57%. So to review – the stock went from low $3s to $13 in just over 24 hrs because… blockchain. I want Tim Cook to release a press release saying Apple is going to blockchain – just that one sentence, and nothing else – just to see if the market cap can go to 2 trillion instantly.
DST Systems (DST) – an information processing and software services provider – agreed to be bought by SS&C Technologies for $84 a share, or $5.1 billion.
We’ll highlight those transports yet again – this is very strange behavior for such a stodgy group.
Have a great week and we’ll see you back here Sunday!