November 21, 2021
Weekly Market Outlook
By Keith Schneider
Written by Keith Schneider and Donn Goodman
As we come upon the Thanksgiving holiday, there is much to be thankful for, especially being able to get together with friends and family in the post Covid isolation era. I believe that there will be more people traveling by cars, planes, and rail than ever before.
The food will be delicious and we will all share our thanks for many things, including being alive, being together, the great (and expensive) food and the fantastic stock market returns of the past two years since January 2020. Actually, since 12-31-2019 to last Friday the S&P 500 is up a whopping 45.7% with a roller coaster downward ride of over 35% during that time. If you had used Alpha Rotation, your drawdown would have been minimal, and our Conservative Alpha S&P 500 has been up 40.6%, while our Moderate Alpha Rotation S&P 500 would be up 119% and again you would have experienced a run up (Long Bonds/TLT) during the March 2020 sell off.
So, What Smells?
While we sit here today enjoying the second most S&P 500 number of new ATH high days since 1995, we also are experiencing enhanced market uncertainty. Most noteworthy is that both market internals and market sentiment eroded despite two US equity benchmarks hitting new ATH’s this week. Furthermore, Grandpa Russell (IWM)was down almost -3% for the week while the NASDQ 100 was up over 2%, a very mixed message. The big question is whether or not IWM can hold at its 6-month calendar range high which is currently at $232.
Mish nailed yet another inconsistency in her commentary this Friday: “This past week the market found both love and irreconcilable differences. The love came from the big cap tech stocks. Nvidia, Apple, Google, Microsoft all gave investors hearts and flowers. On the flip side, small caps, energy, industrial metals, and transportation stocks gave investors indigestion, inconveniently ahead of Thanksgiving”
With inflation rising at an accelerated rate and disruptions in the supply chain creating shortages and enhanced demand, everything including milk, cars, food products, paint, lumber, gasoline and especially Turkey are rising at double digit rates, which will eventually wreak havoc in our society. These rising costs are going to (if not already) impose a substantial tax on every American just through their everyday purchases.
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