The Monday Market Potpourri: The Fed, Stocks, and Social Mood
A smattering of random thoughts as we consider where we are and how we got here.
A new week has arrived and to understand where we are, we must appreciate how we got here. In an effort to set that stage, let’s revisit some of our discussions from last week.
We've spoken about our Surgical Approach to the Stock Market.
We looked back at 1987 for a historical context.
We explored The Most-Hated Rally of All-Time, and fingered a plethora of forward catalysts.
We chewed through social mood, and discussed why Kim Kardashian "matters" to the market.
We dissected Big Ben -- perhaps too much.
We even brought Hoofy & Boo back to life on behalf of BlackBerry (NASDAQ:BBRY)!
And we noodled the notion of The Gold Scold, Part Deux, given the growing chasm in the chart below.
With respect to the past, mindfulness in the moment, and an eye to the future, we offer the following Random Thoughts:
The Wall Street Journal released the now-famous "Fed tapering" article on an 80-degree summer-esque Friday night at 7 p.m. EDT; man, these guys play to the human condition. If a company released earnings at 7 p.m. on a Friday night, some might view it as slim-shady; when the Federal Reserve (indirectly) does it, it's considered savvy, insofar as it allowed for a weekend of digestion.
Apple (NASDAQ:AAPL), LinkedIn (NYSE:LNKD), Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) don't seem to care about the Wall Street Journal article, or the Bloomberg Big Brother mess, for that matter.
It seems to me that one of the reason social mood is as it is (despite all-time highs) is because past generations—those retired—are getting hammered on their fixed-income lifeline while future generations (our children, and recent graduates who cannot get jobs) are feeling the "other side" of policy. Nestled between them is a middle class that has been exported, with only some of them invested in the stock market, thus benefitting from the all-time highs.
Yes, we must trade the tape we have, not the tape we want; that’s a different discussion.
N’s over S’s today (Nasdaq (INDEXNASDAQ:NDX) outperformance of S&P (INDEXSP:.INX)).
I'm seeing the expansion of implied volatility—it's stealthy, yes, but it’s out there—which makes me wonder if we're gonna see a meaningful volatility uptick in the weeks ahead. For more on volatility, theta, and other Greeks, click here for a terrific six-part primer.
- If you haven't seen the ESPN 30 for 30 Bo Jackson segment, I highly recommend it. Bo knows class (and he also knows hip replacements).
I’ve steered clear of small cap cannabis plays (too thin for my blood), but I still think opportunities exist in terms of a investing thesis.
Ten, 12 years ago, I went against the grain and posited that the legacy of Alan Greenspan -- who at the time was hailed as a Golden God -- wouldn't persist....that, before the dust settled, his policies would be called out for what they were (pushing comeuppance out on the curve). I would offer that Big Ben will see much of the same, current equity levels notwithstanding.
- Chin up, my friends, and remember, it could be worse -- it could be raining!
Disclosure: Minyanville Studios, a division of Minyanville Media, has a business relationship with BlackBerry.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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