E Market Briefing For Monday, May 3

Circling the wagons  is one way to view defensive behavior of big-caps, as some stocks are rallying, while others sello ff; even with blow-out results.

What that tells us is that we have brought 'demand forward'. And perhaps by conventional assessment, pulled liquidity from down-the-road; short-term very likely.  It's not just economy and interest rates; it's spending and liquidity.

Meanwhile, the 'synchronized global recovery' (and inflation) is endangered as I have noted, in part because of the resurgence of Covid-19 and return to stricter efforts to contain the virus; beyond what optimists are looking for. The politicians for the most part are continuing to behave 'as if' everything is going towards normalization, and we certainly want to see that.

Probably that's the case in the U.S. and maybe gradually the U.K. But if what is happening in India with mutant variants spreads (as it has to part of Africa I heard this week), well that all bets are off with regard to a broader mix gaining ground. In fact we go back to big-tech leadership.

That might be facilitated by comments I'm hearing suggesting semiconductor shortages are going to be addressed and met by year-end; that would soften the concern about companies dependent on that supplies going into 2022. In fact Christiano Amon (who I had the pleasure to meet in Berlin 2 years ago, giving me the heads-up on waiting for SOC processors -now out- for 5G), the new CEO of Qualcomm, emphasized their foundry growth and noted how even Samsung has a foundry in Austin Texas; plus no problem working with Intel in the future.

Perhaps fundamental analysts focus on whether earnings are growing into the share prices that have moved forward. I suppose the directional targets we're hearing from analysts are getting a little crazy: one targets Amazon to 5500 (I wouldn't hold my breath for that). Untapped buyers aren't really coming into a slew of expensive stocks; but analysts will raise targets to attract interest, and it's impossible to comment as to whether they are disingenuous or believe it).

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