CJ Newsletters

Consolidation of Growth Stocks Looming  We see the recent consolidation of large-cap tech stocks as the beginning of the shift of investor capital from growth to select value sectors that we commented upon last week. The pendulum won’t swing from growth to value overnight. It will occur in fits and starts as rationality returns to valuations and news of the virus charts a course for the economy.  Financial performance of the market leaders will be revealed in the current and…

The Imbalance of Growth vs. Value During this advance from the March lows, we’ve focused on the market’s disconnect from an underlying economy in recession. We’ve also noted the bifurcation between winners and losers among stocks as evidenced by the NASDAQ’s lone return to a bull market while the other indexes still tread below their February highs. That bifurcation was seemingly drawn along the line between stocks categorized as Growth or Value. The former being generally described as higher multiple/volatility…

“Talking” the Market Higher Seems to Be Working In a holiday-shortened week we’ve seen the stock market close out Q2 on a high note, leaving all the major averages with double-digit gains for the quarter. That momentum carried into Q3 with three consecutive advances for both the NASDAQ and S&P 500. Better than expected economic data and speculation regarding vaccine development fueled the advance despite news of the virus transmission spiking in a number of states. Today’s employment report indicates…

The Market Awakens to the Reality of Reopening For a second week, we’ve seen the major averages consolidate off their rally highs as they settle into a trading range. As usual, news of the virus continues to offset any economic data that’s received as positive in light of expectations. Predictably, the reopening of the economy through two phases has sparked a dramatic increase in cases and hospitalizations in a number of states. This has prompted some governors to pause or…

Tailwinds for the Market: Low Expectations and the Fed Last week, we saw anecdotal evidence of a second wave of the virus spread throw fear into the market to the tune of an almost 6% sell-off in the major averages. This week, the S&P 500 has clawed back a good portion of that decline on the wings of a well-received Retail Sales report and a better-than-expected Empire State Mfg. survey. Both exceeded analysts’ modest expectations formed in the aftermath of…

The Economy Surprises Within the context of bleak economic data and civil unrest, stocks continued their advance this week going into Friday’s employment report. The numbers were expected to be grim with estimates of unemployment at nearly 20%. Instead, we saw 2.5 million jobs ADDED to the rolls in May and the jobless rate drop to 13.3%. That proved to be the green light for traders to jump in and take the DOW up almost 1000 points (+3.5%) and the…

Welcome to the New “Careful” Economy  The stock market oozed more optimism this week as it shrugged off gloomy economic data while the major indexes advanced through important technical levels. This served to green-light traders and broaden the relief rally to even the most down-trodden of sectors. The catalyst was anticipation of a smooth reopening of the economy as many states eased restrictions on businesses and gatherings. We also saw evidence that many Americans are disregarding restrictions regardless of where…

 A Week Light on News, Heavy on Speculation This week started off with Monday’s 3+% advance of stocks courtesy of headlines regarding the development of a vaccine and a pledge from the Fed of further stimulus. It was a week bereft of actual economic data and substantive news regarding testing or a vaccine.  That left investors with shorter investment horizons to trade on the noise. That served to push the upper boundary of the current trading range a bit higher…

The Fed Delivers a Sobering Assessment  This week the stock market took a step in a direction toward reconnecting with the longer term outlook for the economy. On Wednesday, Fed Chairman Powell offered that “the outlook for the recovery is highly uncertain and subject to significant downside risks.” He made that comment while addressing questions about how much more the Fed may have to do in deploying its resources if the recovery doesn’t appear as quickly as the market and…