If appears investors weren’t the only ones depleted by last week’s crusher. The sell-off itself seems to have run out of steam, which led to a minor rebound on Friday and somewhat of a “sympathy bounce” today. It was as if the optimism was pre-determined this am--- it was evident from the start with all sectors opening (and also closing) in the green, led by energy, autos and tech. There seemed to be no obvious trigger for the move higher beyond an offhand comment from Pres Biden saying recession isn’t “inevitable” as well as some media outlets noting that inflation may be peaking. Bloomberg spoke to global food concerns beginning to ease thanks to better planting conditions (weather related) and also as Beijing and Shanghai curb Covid outbreaks. Further, existing home sales were right in line --the first print that wasn’t below expectations in four months. But more interestingly was an uptick in housing supply to 1.16m units from April’s 1.03m (though still lower than a year ago). However, those few headlines didn’t seem impactful enough to support the +2.5% moves by the S&P and Nasdaq. It begged the question -- was last week’s selloff (to the tune of $2 trillion off the S&P) a form of capitulation? Possibly, but the trend currently remains negative, especially until we see the RTY through 1712 and the S&P above 3810. The fact of the matter is housing data may have shown better supply, but prices have continued to climb. Homebuilder Lennar (+1.6%), which reported better-than-expected results, flagged a pause in buying by homeowners due to rates and prices. However, it didn’t stop their revenues from climbing as home deliveries rose and its sales prices jumped 17%. And the firm expects prices will be higher still next quarter. And lest we forget last week’s retail sales and CPI data. Still, today’s market was determined to be “chipper” as Nvidia (+4.3%) led the semis AMD (+2.7%), Qualcomm (+2.8%), and Analog Devices (+2.6%) higher (yeah I did). Prudent to note that despite today’s broader rally, the current market environment remains one of the most difficult ones investors have seen in recent years. Thus, no sudden move may be the best move at this juncture.
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