November 22, 2015
Weekly Market Outlook
By Keith Schneider
Equity Markets around the world rallied this week, with the S&P 500 improving by more than 3%, and the NASDAQ 100 leading once again up over almost 4%.
That narrowing list of top performers that continued to roar were led by Amazon, Google, Activision, and NiVidia (all holdings of our NASDQ 100 ALL Stars Model). Markets shrugged off news of yet more terrorist attack around the globe.
Besides recently killing hundreds of innocent citizens throughout the world, the terrorist attacks were able to do something that even the UN or direct negotiations between the US and Russia could not do… and that is at least temporarily unite the world and create the set-up for global co-operation to eliminate ISIS and curtail radical Islam.
Observing the photo above one can the sense the intensity, urgency and sincerity between Obama and Putin as they met to discuss fighting terrorism.
ISIS has been able make even Syria’s Leader Assad seem prophetic since he has been telling the World he is not the problem, but ISIS is. It is not very often one might agree with brutal dictators, but even they occasionally have a point.
Another outgrowth of ISIS taking its terror on the road is that Russia intervention in Syria is getting good press and helping to improve Putin’s standing as a legit global player.
In fact, the Russian stock market, after being hammered since Putin’s adventures in the Ukraine is now coming back to life. Its three month performance is second strongest in the world and its index RSX had a strong week on good volume, something lacking here on the rally in US stocks.
Economic conditions and capital flight is still center stage in Russia and to stem that, the perception of Putin as a corrupt thug must be squashed. Maybe Putin will take the cue, make a deal with the West, and slowly ease away from Assad while the world works together to take out ISIS.
Meanwhile, the rally in in the US equity markets is very narrow, with the top 10 stocks in the S&P 500 accounting for just about all of the gains this year. Narrow breadth is often associated with market tops such as in the tech bubble in 2000 but actual research is not conclusive.
However, narrow breadth and high PE’s which is currently around 16 (high side when not in a recession) is a condition worth mentioning.
Every week you'll gain actionable insight with:
