The S&P has nearly doubled - in less than a year-and-a-half from our March 23, 2020 'Inger Bottom' low, and yet many stocks are languishing under the cover of this superficially dramatic market. Perhaps that's part of why muted enthusiasm greets the upside record achievements, even by media analysts.
If they truly were vested in the significance of records, instead of frustration it might be enthusiasm that we hear. Even politicians would be hailing a record more than just with cursory 'also-ran' mention in their speeches. After all, the Bears (and some Republicans) were quick to label the year's earlier nominal correction as a sign of how happy the market was under Trump, but now the Democrats barely note new records under Biden.
The reality is only in the presence of 'ultra-low' interest rates and firm earnings could you have these records, and both areas that sustained the advance are increasingly in-question. I question this and look for Index retreat as well but I have not fought the Fed and viewed the overall S&P (SPX) trend as favorable if very extended. You have speculative excess here and there, an you have serious stocks like Oils or some Banks, that have been 'relatively' attractive to be in (OIL).
The momentum stocks like Google (GOOGL), Facebook (FB), Amazon (AMZN) and so on, well they are benefiting from buybacks, special voting shares, or 'concentration' buying by hedge funds and others, as they seek to be only in stocks they either know they can exit (or presume so), or write options against as income strategy. Oh and the FDA just approved Jeff Bezos flight (commercial traffic, really?) for next week on Blue Origin, to be launched from his big ranch in Texas. Prime.
While still viewing most Energy attractive, and some banks, it's really not very bearish on the future, but skeptical about the Senior Indexes at these levels. I am also skeptical of all the crowds wanting to plow into Silver bars, though I'm reasonably favorable (and have been) on Silver. It's 'bars' that are tough sells, I have successfully traded Silver, but Options as Leaps, not taking possession (SLV).
On COVID:
Today we have another warning against the Johnson & Johnson vaccine (JNJ), and who knows if the defenses of 'fully vaccinated' masses of people are actually weaker now. That's because a mutating virus can breakthrough as well as a propensity of more vulnerable partially vaccinated populations.
Israel had the distribution and compliance capacity, and nevertheless posted a concerning data point: dip from 94% to 64% in terms of infection prevention from vaccination in 1 month, due largely to the Delta variant. Selective pressures tend to be immune escape and more severe disease even in vaccinated individuals it seems, as the virus learns how to transmit itself better.
In-sum:
The seeds are being shown for a market correction, and it feels more fragile than some prior high areas, partially because so many stocks are not participating in the move, while many pundits pretend 'the market' is so high.
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