E Tuesday Talk: Consumption Rising

Vaccination is getting people off the couch, the stimulus bill is giving people dollars to spend. Leisure destinations should benefit. Is pandemic stay at home behavior over? The get up and go mood seemed to be evident in the stock market yesterday with the Dow (DIA) gaining nearly 1% and the Nasdaq (QQQ) losing 2.4%. Disney (DIS) was up 6.27%, while Nvidia (NVDA) was down 6.97%, Southwest Airlines (LUV) was up 6.38% and Apple (AAPL) was down 4.17%. Currently S&P futures are trading at 3,854, up 35 points, Dow futures are trading at 31,889, up 113 points and Nasdaq futures are trading at 12,545, up 248 points.

man riding on black BMX bike in mid-air


TalkMarkets contributor Mish Shedlock takes a look at the diversion in the indices in his article Technology Stocks Enter Fourth Week Of Declines As The Dow Hits A New Record. Shedlock offers the following for our consideration:

"The Nasdaq dropped 310.99 points, or 2.4%, to 12609.16, extending the declines from its Feb. 12 record to more than 10%. Rising bond yields dent the allure of growth stocks like those of big tech companies."

"The Dow Jones Industrial Average surged 306.14 points, or 1%, to 31802.44 following progress on a new fiscal stimulus bill that brightened economic prospects. "

Shedlock says he does not believe the divergence illustrated in the above chart will continue. He believes the Dow will join the Nasdaq in correction mode in the near future.

"This divergence won't last. Either the S&P and Dow join the correction party or hiding out in the Dow will fail. My guess is hiding out in the Dow will fail." 

He also, believes that the recent rise in Treasury yields is coming to an end, at least for now.

Hmm and hmm.

black flat screen tv turned on displaying yellow emoji


David Merkel in a TalkMarkets Editor's Choice column Time For Another Convexity Crisis? takes a look at what is going up and from what he sees from his perch it's not the stock market. 

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William K. 1 month ago Member's comment

Well wrtten and quite interesting. Thanks!

David Marshall 1 month ago Contributor's comment

Thank you 👍🏽