Jared Lechner

The View from 5th Avenue

The View at Two – 8 September 2020

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No S&P For You! – The cult-like following (see below) of Tesla and its fearless leader had the car-maker mimicking a rocket shop with the unrelenting ascent of the company’s stock price. Out of the money calls (we’ll get to that), stock splits, a possible inclusion in the US benchmark index; all contributed to a stock gone wild. Fret not however, a 20% retreat this month alone still has it +317% YTD. With summer over, investors are skimming some of the market froth and again it’s mega-cap tech leading the way lower. Technically speaking there hasn’t’ been any significant damage to the FAAMG crew and if you’re using 2009 as a proxy, these last few days are a mere flesh wound. In fact, we’ve had numerous funds come into us expressing a sentiment of when, not if they’ll get back in. Not the case for value stocks as they give growth a run for their money, energy nearing a new all-time relative LOW vs SPX while banks are 2nd worst on the day.  

The View from 5th Avenue

The View at Two – 1 September 2020

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To the Moon Alice! – Who knew Ralph Kramden could be so prescient! Clearly he’s referring to the skyrocketing move made by equities, namely large-cap tech as it once again breaks new ground, the Nasdaq 100 reaching an all-time intraday high in the process. A strong ISM manufacturing figure has helped propel some of the cyclical spaces higher while pharma lags in a big way; the House subpoena of Abbvie on broad industry pricing the culprit there. Wal-Mart continues to remake itself and details of its Wal-Mart+ launch. September has traditionally been a difficult month for stocks but during a year when up is down, and left is right, you going to bank on that?

The View from 5th Avenue

The View at Two – 17 August 2020

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Et tu Warren? – After a middling week for the techies, they’re back doing what they do best, namely residing in the green. The watch for Apple two trillion persists ($467.70) and the Nasdaq 100 leads the way as it nears a new all-time high (see graph below) and the S&P sits just off a new ATH for the first time since February. We seem to have witnessed our most recent value/cyclical head fake again, banks and travel/leisure names lagging significantly. The money institutions can “thank” Mr. Buffett for their selloff today, news of cutting back his position in a host of names behind the move. Meanwhile, the Oracle seems to have decided, if you can’t beat ‘em, join ‘em. He gave the gold bugs a boost after capitulating and announcing a stake in Barrick Gold. Semis piggybacking Nvidia’s move (+6.9%) after some analysts up their PT ahead of Wed earnings and General Motors (+7.8%) after a broker suggested they could spin off their EV unit.

The View from 5th Avenue

The View at Two – 12 August 2020

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To Be or Not to Be – A genuine rotation that is, seems to be the question on everyone’s mind. A 3-day losing streak for big tech accompanied by a curious slide late yesterday furthered the thought but the 2020 darlings responded with a resounding NOT SO FAST today. Yesterday’s move did highlight the crowded nature of a # of trades and what we can expect if/when investors become inclined to unwind. Continued talk of a stalemate in Congress and postponing of college football (a clearer sign the pandemic is far from over) will test this rotation as it remains in its nascent stages. The key level to watch here is the S&P Value ETF June relative high. It remains a bit away from current levels and its only a short term level really; net-net, we’ll need much more confirmation before the rotation becomes a reality.

The View from 5th Avenue

The View at Two – 4 August 2020

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WOOF WOOF: US indices greeted the dog days of summer with a new 5-month high yday, but today’s less enthusiastic open makes it clear this isn’t going to be a cakewalk for stocks No doubt the recovery’s come a long way, but the stubborn growth of virus cases is stalling further progress (just ask airlines, restaurants, etc…) and more co’s every day seem to flag coming job cuts (BKNG the latest this morn). COVID cases seem to have come off their peak however (for now), factory orders followed up yesterday’s good PMI # with a solid figure itself and June home prices had its largest monthly gain in 7 years. Cyclicals are having a day (banks notwithstanding because, why would ya) with travel names better on talk of improving trends. REITs are taking the Facebook-Vornado news well and Ford is going better on a CEO change. Despite some singular moves, the overall indices are in a holding pattern, albeit slightly in positive territory.

The View from 5th Avenue

The View at Two – 30 July 2020

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LOUD NOISES! Couldn’t we spread things out a bit? FOMC and Tech CEOs on the BBQ yesterday (oh they sure got grilled! Think they slept ok) that led into a potpourri of earnings last night and this morning, with a delectable dessert awaiting post the bell today with Apple, Alphabet, Facebook and Amazon set to report. (A group that testifies together, reports together?) Net-net, there’s a lot going on and while futures and action in Europe suggested today would be an ugly one, that’s not the case as things currently stand. Powell held the line while the earnings narrative has stayed consistent. That being an average EPS beat rate of around 15% with reports of improvement, although some talk of plateauing in July could be cause for concern. Semis specifically strong (making ATHs), Lam Research and Qualcomm posting reports last night that read well, especially the latter’s unexpected licensing deal with Huawei. People haven’t been going to stores that much and so they need stuff delivered – UPS followed FedEx’s lead last month with blowout figures.

The View from 5th Avenue

The View at Two – 28 July 2020

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Are You Loving It? – We had some heavy hitters that make up the Industrials index reporting this morning, some familiar names that could provide some insight into the health of some international conglomerates. Pfizer gained after raising its earnings forecast while everyone’s favorite dinner as a kid and late night meal as an adult, McDonald’s, retreated on worse same-store sales than expected. International demand showed signs of recovery, a potentially helpful harbinger for those with a large % of sales overseas, a still underperforming USD furthering the overseas case. Today begins the busiest week for earnings and the oncoming deluge currently has investors at bay. While Q2 may have been a write-off, some companies continue to forego guidance and valuations (forward price-earnings was as high as 22 on Friday; above the cyclical peak in mid-February!) can’t be comforting as concerns about the economy plateauing persist. At the moment more indicators than not suggest the crowd is feeling less optimistic.