It is really happening this time.
The reopening is real.
I saw it in Amsterdam. The Dutch had been locked up a long time. They are not going back inside for anyone or anything.
Here in Phoenix I am not sure we were ever locked down, but I did hit the mall this weekend to grab a few things and it was packed.
The airports have been busy for a while now.
The money is being printed and now it is being spent on more than just e-commerce.
The shallow S&P five percent dip was bought last week.
Even though rates surged last week, software and growth stocks held their own. I will be watching this relationship closely.
As always, Ivanhoff and I tour the markets looking for and at the momentum. You can watch this weeks episode right here on YouTube. I have also embedded it on the blog below:
The reopening stocks are perking like hotels, AirBnb, Live Nation, Booking.com ($BKNG) and even the airlines. Even $UBER is cranking.
It is not just the reopening stocks working but some of the lockdown big winners like Peloton and Zoom are in nasty bear markets
Doordash is back at all-time highs while Fedex is crashing. The last mile is worth the most to investors right now.
Here are Ivanhoff’s market notes:
This time the bounce was led by small caps and “back-to-normal” stocks – not only financials and energy but also travel and leisure. Airlines were the best performing industry for the week followed by oil & gas, and entertainment. The market is acting as if Covid will be gone in a few months or at least its impact will be reduced. Either that, or we just witnessed just another quick sector rotation and short covering that won’t last long.
We saw a big spike in interest rates after the FOMC briefing last week. The Fed is acknowledging that inflation might be a bit higher and linger longer than previously expected. One small change in the Fed’s message can lead to a big move in financial markets which like to extrapolate and discount what could happen 6 months in the future. Long-term US Treasuries sold off and financials took off. With banks so strong, it’s hard to imagine SPY having any significant pullback any time soon.
Tech is not looking too shabby either. Software (IGV) and Semiconductors (SMH) never closed below their 50-day moving average and had a powerful bounce after the gap down last Monday. One would think that rising interest rates will hit richly-valued tech names, but so far we are not seeing any evidence of it. Stocks like U, SNOW, ZS, CRWD, BILL, ESTC, DDOG, ZI, TTD, AVLR, TEAM, CRM, DOCN, NET, NTNX, PLAN, SPLK, WDAY, PLTR, OKTA, DLO, etc. are either pushing higher or consolidating sideways. This is not a price action of a market worried about inflation too much.
Another thing that stood out late last week is the carbon emissions ETF – KRBN, making new all-time highs. This explains the strength in many electric vehicles stocks – TSLA, GOEV, LCID, FSR, etc.
Here is the Stocktwits momentum 25 lists which is where I start my investing week.
Here is Charlie’s ‘7 Chart Sunday‘.
In the SPAC world, I am really seeing the effect of too much money as 3/5 of the over 500 SPAC’s in market have not found a target. Here is Nikita’s weekly SPAC market update.
It is good to be home. I have an insane work schedule through the end of the year so I am glad I got my crazy suffering vacation behind me.
Have a great week.