Week Of June 9: What's In Store For The Markets

By Jordan Kimmel

Sunday, June 9, 2024 8:43 PM EST

“We can make excellent investment decisions on the basis of present observations, with no need to make guesses about the future.” - Howard Marks

Market Commentary:

The overall market is losing its upside momentum. Overvalued and high price-to-sales companies are being pushed to unsustainable levels, some are already being crushed by a move to value.
The number of new 52-week lows remains low overall but is increasing. The advance/decline line on Nasdaq is breaking down. We are now seeing more new lows than new highs on Nasdaq. A dangerous sign for sure with the index recently hitting an all-time high.
Leadership is narrowing despite strength in several sectors- insurance, finance, basic materials, shipping, telecom infrastructure, and technology.
Momentum, up and down, is the dominant factor with price movement lately. I think the “bots” are running wild.
Investors should be paying more careful attention to balance sheets and/or earnings footnotes.
Pay extra attention to valuation.

Economic data and market clues:

We will see quite a bit of economic data released but no clear path to lower interest rates. The free money era is simply over. Listening to the various Fed governors continuing to contradict themselves is getting tiring and offers little guidance.

Look for Apple to excite the crowd with its AI initiatives.

The stock market is very similar to the rest of the economy with winners and losers, but many more losers. Many of today’s high-flyers will be unknown ten years from now.

Make sure to cut losses if any portfolio holding fails to meet your intermediate expectations. Patience is good, averaging down in a losing stock is foolish.

Current holdings:

Magnet®:

Mr. Cooper Group COOP

Applovin APP

Novo Nordisk NVO

FACTS:

Allstate ALL

JP Morgan Chase JPM

Broadcom AVGO

Companies on our “next in” watchlist:

NEXTracker Inc. NXT

Logitech International LOGI